As the old adages goes, change is the only constant and change is inevitable. But high-tech industry is undergoing so many changes at a rate faster than anyone can ever fathom. We are witnessing rise and decline of technology giants in a short span of a decade. Moreover the intensity of changes that we are experiencing in the last 2 decades (at least since mid 90’s) is much larger than changes that occurred in the previous 5 decades. The belief was further reinforced after I read an article titled ‘Bye Bye BlackBerry. How Long Will Apple Last?’ The article was also raising doubts on the longevity of Apple in retaining its supremacy. Coincidentally there was another article in Forbes that was speculating about the possible disappearance of Google and Facebook in 5 years.
Even though the thought that Google and Facebook will disappear and Apple will lose its supremacy is unbelievable and daunting, I decided to have an open view that anything might possible and start contemplating possible ways to arrest the decline of any technology giant. So the blog posting is to share some of my thought process on those lines. The decline of all the technology giants is directly correlated to the decline of their respective flagship product(s), so let us focus on how to arrest the decline of their flagship product(s). Rather than saying decline, I would prefer to use the term ‘Inflection point’. Let us discuss how we can ensure that the product does not hit the ‘Inflection Point’. There are several stalwarts who have done a thorough research on this topics and authored great books. Some of my favorites are ‘Innovators Dilemma’ and ‘Innovators Solution’ by Clayton M. Christensen and ‘Only Paranoid Survives’ by Andrew Groove. I am not an expert or genius to talk anything beyond what those gentlemen have already elaborated in their books, I am just trying to use some of their concepts and focus on the very basic concepts of product marketing/product management.
Every product is conceived to either solve the pain points or enrich the experience of target market. So every organization has to constantly re-invent and consistently raise the bar of innovation to ensure that their products(s) is aligned to the changing needs of our target market.
In rapidly changing high-tech industry, there is an imperative need to constantly introspect to check whether a product is still relevant to its target market vis-à-vis competition. One significant reason for any product to get into sunset mode is that the product has lost relevance in target market. With that intention, I have basically arrived at a few set of questions (presented below) to help us validate how a product is positioned to serve its target market. Candid and honest response is critical to validate relevance of the product in its target market.
1. Is the target market still bigger enough to satisfy the growth requirements?
2. Are the requirements / product preferences of target market still remaining same?
3. Is competitor offering better value proposition by raising the bar of innovation?
4. Is our product getting commoditized?
5. Can the target market be served by any alternate product?
6. Is the target market over served?
7. Can the product satisfy any unmet needs of adjacent market?
I will elaborate on each of the above questions in my subsequent blog post. I will also attempt to address whether answering each of the above questions would suffice to arrest the decline of any product.
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.
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.