How not to ignore warning signal – To arrest product decline

As a Product Manager, my biggest fear is not to be conscious of the changes that are causing my product to decline much faster and much earlier. The changes could be triggered by either an individual or combination of sources such as competition, technology, customer preferences, new product etc. The changes could be either phenomenal such as 10x change, illustrated by Andy Groove in his book “Only Paranoid can Survive” or it could be incremental/sustaining causing a tangible dip in revenue/ market share.

10x changes do not happen on every day basis, but when occurred they prove disruptive. They create a new business model and trigger a new eco-system paving way for lots of additional opportunities while at the same time making older ways of doing things irrelevant. Microsoft Windows is definitely a 10x change, iTunes is another classic example. Both the products have disrupted desktop and music industry respectively.

I have to regret for repeatedly using Smartphone industry for illustration, nevertheless each one of us have witnessed those changes and hence it would be easy to connect to those illustrations. I would not call iPhone and Android as 10x changes but they definitely had created huge impact and it is evident for all of us. I list Android for the reasons that I had stated in earlier blog post: Has Android really changed the dynamics of Smartphone industry. Online shopping is another example especially after tremendous hit of www.Flipkart.com  in India and for the impact that it is eventually having on retail stores.

All the above changes when unattended might prove disastrous to our existing product and it can even lead to slow death of our product. I am using the word ‘change’ in a more generic way to refer to any impending new product introduction or new competitor arrival or new technology introduction or anything similar that can cause some potential impact to the existing product/ players in the market. The changes that were illustrated earlier do not happen overnight, they happen gradually and steadily leaving us some amount of time to adapt/change/refine our strategy.

So we are eventually heading to the crux of our discussions that any changes will eventually throw certain signals which we should not ignore. Before the change occurs, we might hear about them in press or other tech blogs about possible launch of a new product or arrival of new competitor/technology. Though it would be too early to anticipate the impact, I would at least stress not to discard the changes. We can probably do a scenario analysis on how the changes when occurred would impact us. On the contrary what happens is that we turn out pessimistic about the changes. For instance in case of possible news about iPhone development, all the CxOs were expressing pessimisms over the success of iPhone:

  • In December 2006, Palm CEO Ed Colligan summarily dismissed the idea that a traditional personal computing company could compete in the smartphone business. “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
  • In January 2007, Microsoft CEO Steve Ballmer laughed off the prospect of an expensive smartphone without a keyboard having a chance in the marketplace as follows: “Five hundred dollars? Fully subsidized? With a plan? I said that’s the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good e-mail machine.”
  • In March 2007, computing industry pundit John C. Dvorak argued that “Apple should pull the plug on the iPhone” since “There is no likelihood that Apple can be successful in a business this competitive.” Dvorak believed the mobile handset business was already locked up by the era’s major players. “This is not an emerging business. In fact it’s gone so far that it’s in the process of consolidation with probably two players dominating everything, Nokia Corp. and Motorola Inc.”

Courtesy: www.forbes.com

On the contrary to the perceptions of all those gentlemen, iPhone has tasted tremendous success threatening the existence of traditional players like Nokia, Motorola and Blackberry. The reason for those gentlemen to express pessimism is that each of them had tasted tremendous success and they probably hope that what made them successful at one point of time will ensure their success forever. However we have to understand that every day is a new beginning and what made us successful yesterday will not make us successful today. So it is always fair to keep the threat perception open and constantly revisit until it is proven that the change(s) does not cause any impact. For instance certain products/technology arrives with much fanfare but fade eventually (like Nokia N-gaze)

After the changes has occurred (be it either a new product, new competitor, new technology) the impact will be tangible at least through revenues, negative feedback from sales/distribution channels. Momentary decline or random negative feedback should be OK, so we should look out some common patterns and occurrence of any such patterns should be viewed as warning signals that should essentially caution us and trigger us to do a candid introspection of how our product is performing. Now it brings us back to our earlier blog post discussions on ‘Need for introspection of our target market’ to script turnaround story.

There are also instances where the changes would leave us no chance for survival and we have to graciously kill the product. There is no scope for survival of pagers after mobile phones were established. In such cases it is better not to try too hard to survive by burning lots of money. One simple rule to consider whether to KILL the PRODUCT is to verify whether both the product and market is in sunset mode.

Evolution of Apps Ecosystem

After the evolution of Apple’s app store, Apps has become a critical element in the smartphone segment. The craze for apps is so huge that it has become a billion dollar market and all the OS developers are focusing to increase their database of Apps. Apple has traditionally been a closed company and I presume that Apple would have realized that standing alone it would not be able to build a huge collection of apps. Hence it provided SDKs and allowed external world to contribute to the development of apps. The entire process has become an instant hit that it has become imperative for any organization to let the world develop apps for them. Further the advent of Google App Inventor that enables a non-programmer to create apps with ease only exemplifies that the need to empower end-users (most importantly non-programmers) to create their own mobile apps is the most pressing need of the hour. Probably companies has to identify more such innovative methods to increase the database of Apps.

Moreover the existence of apps has become a key factor in the buying decision of any smartphone and it has pushed the importance of apps among OS developers . I am also wondering whether there is any possibility for apps to create a customer lock-in effect. Do apps really have the potential to tie the customer to a particular platform? Reports indicate that average iPhone user downloads 40 apps, considering 50% of the apps downloaded are paid and the average cost of app is around 3$, the amount invested towards apps is around 60$. Is 60$ too big an investment for a customer to get tied to a particular platform. Otherwise would he/she be willing to forego that investment to re-purchase those apps on a new platform. There are no straightforward answers. At least I can conclude that apps have the potential to create a lock-in considering the fact that the average number of apps downloaded by the users is on an increasing trend.
However the bigger question that remains now is whether HTML5 will take the sheen away from native app developers. The emergence of HTML5 might allow the developers to develop apps that are independent of the platform. Such a scenario will re-define the entire apps ecosystem and reduce the significance of OS developers. Until then, OS developers are poised to rule the roost and define the rules of apps eco-system.

Has Android really changed the dynamics of smartphone market

According to me, there are two tipping points in smartphone market. First tipping point is the arrival of IPhone. Firstly IPhone has changed the perspective of user experience in smartphones and secondly it has paved the way for evolution of apps eco-system. Apple has set a benchmark with respect to apps that success of future smartphone OS lingers on its ability to successfully create an apps eco-system. The second tipping point is Android. Android is definitely a force to reckon with in smartphone market that would otherwise been poised to be dominated by IPhone. Android has given new lease of life for all the handset manufacturers to revive their smartphones portfolio and thereby completely changing the competitive landscape of the smartphone market. Most of the smartphone manufacturers like HTC, Motorola have increased their market share in smartphone market after introduction of Android phones.

Now Android OS being free and Smartphone market being on an exponential growth trajectory, most of the companies that do not have any experience in mobile market are launching smartphones. The list includes Huaweii, Dell, Mindtree and it will keep growing irrespective of the success of the earlier mentioned companies. Everyone wants to have a share of the larger pie to quench their growth requirements. Leaving aside the discussion regarding the ability of those firms to succeed in crowded markets, I can assert that Android is on the path to make the smartphones a mass market product by facilitating flurry of companies enter smartphone market. Had it not been for Android, how anyone would justify the entry of so many players in smartphone market. As always, Google has been a game changer in every segment it enters. As a next wave, I feel that the day is not far off where I can buy my own smartphone hardware and load OS of my choice.