Archive for February, 2011

Feb 28

Posted by Jeremy Toeman and Greg Franzese

Posted in Gadgets, Products, Stage Two, UI/UX

Is Your Cell Phone Making You 48% Dumber?

Jakob Nielsen’s Alertbox has a well written piece up today that looks at mobile usability. The post examines a recent article in the International Journal of Mobile Human Computer Interaction that studies how screen size affects reading comprehension. The article found that “when reading from an iPhone-sized screen, comprehension scores for complex Web content were 48% of desktop monitor scores.” That means it is twice as hard to understand what you are reading on a mobile display.

A smaller screen hurts comprehension for two reasons:

* Users can see less at any given time. Thus, users must rely on their highly fallible memory when trying to understand anything that’s not fully explained within the viewable space.
o Less context = less understanding
* Users must move around the page more, using scrolling to refer to other parts of the content instead of simply glancing at the text. Scrolling introduces 3 problems:
o It takes more time, thus degrading memory.
o It diverts attention from the problem at hand to the secondary task of locating the required part of the page.
o It introduces the new problem of reacquiring the previous location on the page.

The study, performed by R.I. Singh and associates, highlights the need for mobile application developers to deliver clear, simple content to their users. Both the content and the UI must help people understand key messages of the application.

Feb 28

Posted by Jeremy Toeman and Greg Franzese

Posted in Gadgets, Products, Stage Two

Verizon iPhone Sells 1 Million Units

Despite a bevy of headlines calling initial sales “underwhelming,” The Street is reporting that the Verizon iPhone has sold over one million units. Some tech press observed “short to nonexistent” lines at Apple and Verizon stores when the device launched and cited sources concerned about low sales numbers. However:

Dan Mead, Verizon Wireless chief, told media outlets this weekend that 60% of the company’s iPhone sales were preorders. This would explain why the turnout on a cold February launch day was much lighter than some may have expected.

We won’t know official sales numbers until April, but it makes sense that large numbers of preorders cut the initial lines down to size.

Feb 21

Posted by Jeremy Toeman and Greg Franzese

Posted in Apps, Products, Stage Two

Android Market Grew 861% But App Store Grew ONE BILLION DOLLARS. FTW.

Phandroid is reporting that the Google Android Market grew 861% last year – and calls that feat “remarkable.”

A million dollars isn't cool. You know what's cool? A billion dollars.

While it is true that Google Android Market moved from $11 million in revenue in 2009 to $102 million in 2010, the real story is Apple’s growth in the mobile application space. Quoting from Know Your Mobile:

It will come as no surprise to hear Apple dominates the world of apps, not just in terms of support but also in revenue. $1.7 billion dollars were generated in 2010, and the App Store now accounts for 82.7 per cent of the market.

While Apple technically lost market share in 2010, it also increased sales by a billion dollars. Apple’s dominant market position is one of the reasons the company is implementing a new subscription fee structure for applications (and angering some mobile app developers in the process).

As I wrote in 2009, clumsy usability and a “free” app culture hinder any sustained growth for Android applications.

With the fracturing of Android as a platform, not all apps are even guaranteed to run on a given phone! It’s as if the entire experience was “in beta”, only nobody’s overseeing the process.

Android will likely continue to grow in the coming year as the platform matures. But that growth must be observed in light of Apple’s strong presence in the mobile application field.

Feb 21

Posted by Jeremy Toeman and Greg Franzese

Posted in Gadgets, Products, Stage Two

Building Hardware is Hard

Kara Swisher is reporting at All Things D that student tablet maker Kno

is considering selling off the entire hardware part of the business and is in talks with two major consumer electronics manufacturers to do so, according to sources close to the situation.

Engadget also picked up the story, and cites competition from more established hardware manufacturers as one of the motives behind this move. Kno will reportedly focus on providing software for the iPad and Android tablets going forward.

The news only underscores the point that bringing well designed hardware to market is a difficult proposition. Some individuals think that because they have built a successful software business or popular website, they will be good at building hardware. This is a lot like assuming that if you are good at plotting data on a graph, you know exactly how a black hole works. Hardware is a complicated, complex animal. It presents many potential points of failure, and has its own unique challenges. The key to delivering great hardware is assembling an experienced team that knows how to handle everything from product concept to product launch.

Let’s imagine a web entrepreneur who starts a successful dating site (or cooking site, etc). Given the way the web works, he could easily transfer all of the lessons he learned building that site to another URL. Everything the first experience taught him about customer acquisition, internet marketing, and web design would apply to his second website (and his third and fourth, etc). If this CEO used the same transferable skills to build a number of websites he would be considered (rightly so) a savvy entrepreneur.

Now let’s look at what it takes to build a gadget, and the paradoxes that are inherent in successful hardware manufacturing. The more successful one is at building a gadget, the more money is needed to continue to be successful and the more likely the gadget business is to fail.

Wait, what? It seems counter intuitive, but with hardware, growth = problems. The moment your device becomes a success you need to accommodate more orders from the distribution channel (those are the guys that place your hardware in retail, BTW). For example, if you sold 10K units last quarter, and orders for the next quarter are 30K, you have to start building for the quarter after that. The good news is that sales are projected for 60K units. The bad news is that you need to pay for those gadgets now.

Hardware presents problems that software and websites never encounter. Bringing a hardware device to market can take 9-13 months. During that time there are significant costs and multiple points of failure that can come up (the power button won’t work, the driver is malfunctioning, the gadget loves to catch on fire, etc). As opposed to the web/software entrepreneur mentioned above, almost all of these hardware problems are unique and no amount of software success will apply in the gadget realm (you can’t pivot a defective mother board).

This post isn’t meant to pick on Kno or its leadership (by any means). And the point is not to say that startups that build hardware can’t be successful (they can). The point of this post is to point out that a great product team determines hardware’s success. They do this largely because they have done the work before and were successful. (Take us for example, we have been building award-winning devices in the CE space for years, but don’t ask Stage Two to design a main frame- that’s not our bag). Dedicated product professionals understand how complicated hardware is and have the mettle to think through every potential problem, from the quick start guide, to the distribution channel, to customer service and support. Building a new device is hard. Make sure that your product team is up to the challenge.

Feb 18

Posted by Jeremy Toeman and Greg Franzese

Posted in Social Media

Twitter is Either Worth 10 Billion Dollars or Nothing

There are a lot of discussions in the tech world regarding the 8 – 10 Billion dollar valuation assigned to Twitter. Both Facebook and Google are purportedly in talks with the micro blogging service. The question then becomes, is Twitter really worth that much? The answer is complicated. It could be – or it could be worth next to nothing.

Both Twitter Co-Founder Biz Stone and Chief Executive Officer Dick Costolo have gone on the record to pour cold water on the Twitter acquisition rumors, as well as deflate the 10 billion dollar number.

Quoting Stone’s recent NPR interview:

“We’re not valued at $10 billion dollars. That’s just what people are writing in the newspapers, which unfortunately has the negative impact of my friends thinking I must have $10 billion dollars.”

Recently, Twitter was valued at $3.7 Billion, but the very nature of the micro-blogging service makes assigning any number to the company a difficult proposition. Twitter is like a rare baseball card, in that it has perceived worth but no inherent value. (Value here is defined as having usefulness, “utility or merit” and worth refers to the price something commands on the market). Even the rarest baseball card has little value in the real world . After all, it is only made up of cardboard, which isn’t all that valuable. The card is only worth what a buyer is willing to pay for it at a given time. To further differentiate worth from value, it helps to envision a car. A car always has value, no matter the make or model. After all, a car provides utility and serves a function. The raw materials of any car are valuable. Even when it isn’t running, an automobile’s parts can be stripped and sold.

And that is the problem with Twitter. It can’t be stripped for parts or take companies where they want to go online (to stretch the image a bit). Twitter is a platform, much like email and HTML. Each of these platforms has revolutionized the way people share information, but there is no money to be made at that level. We have yet to see someone successfully monetize a communications platform.

So how could one make money off a platform? The most viable option (and we hate it) is to close it down. We are not suggesting that Twitter create a closed ecosystem – in fact we like that they are so open (well, sort of open). They could lock down their API, and own all of the apps and services that are powered by Twitter. Of course there are risks associated with this plan, but selling user data to Google or Facebook could also backfire.

Twitter is either worth 10 billion dollars or far, far less. Ultimately Twitter is worth whatever someone is willing to pay for it. But the value of the company is questionable at this time.

Feb 18

Posted by Jeremy Toeman and Greg Franzese

Posted in Stage Two

HBR: How Apple Broke All The PR Rules and Got Away With It

Joshua Gans has a smart article at the Harvard Business Review that looks at how Apple broke major PR rules during “antennagate” and lived to tell the tale.

To recap, after the iPhone 4 launched, there were reports that holding the phone a certain way would reduce the signal strength. Quoting from the article:

For several weeks, Apple looked like a laughing stock. But by mid-July, the issue was gone. And not just negated, but pretty well forgotten.

How did Apple achieve this seemingly impossible public relations feat? By breaking 5 key “rules” ingrained in the public relations playbook. Jobs & co. did none of these — and that is why he succeeded in capturing the higher ground.

The PR laws that Apple broke were:

1. Apologize and take full responsibility.

2. Don’t create expectations with a media event.

3. Announce the give away first.

4. Avoid specific comparisons with competitors.

5. Don’t air your industry’s dark secrets.

The article is informative (as are the comments) and well worth a read, but the summary is that Apple played its own game, stuck to its guns, smashed two decades of PR dogma and came off smelling like roses.

Feb 17

Posted by Jeremy Toeman and Greg Franzese

Posted in Gadgets, Marketing, Press, Products, Stage Two

Stop Enabling Mediocre Technology

Enabling personality types tend to minimize obvious problems, “protect people from negative consequences” and suffer from intense denial, among other psychological traits. While the urge to enable is “born out of love,” the results of this behavior are ultimately destructive. A loved one makes excuses for an addict in the family because they feel that this will help them. In reality, though, it only encourages and prolongs the negative actions.

In my mind, many tech reviews – both professional editorial content and amateur user comments – enable mediocre products by overlooking their obvious flaws. These articles give glowing impressions of consumer technologies that are clearly “not ready for prime time.” The reviewers and commenters are acting from a place of love. They think they are helping by engaging in this behavior. They may feel strongly that a certain company makes great devices and they really want other people to feel the same way. But what winds up happening is that these individuals make excuses for devices that are lacking in quality and the entire tech industry suffers as a consequence.

The quotes below are from positive product reviews. The names and quotes have been altered to protect sub-par devices:

I’m sure it will improve over time.”
- Top Tier Blogger

“This device has a lot of potential.”
- Well Known Gadget Site

“There is a ton of potential here.”
- Tech Review

Again, these quotations are from three and four star reviews. This kind of cognitive dissonance happens all the time. Never mind that the device breaks sometimes, or that it’s missing some core functions at launch. It’s still a good purchase, say the enablers. And because we refuse to call out bad consumer tech, the manufacturers feel they can get away with shipping so-so products. As long as there is sufficient “hype,” “buzz” and “social interest,” who cares if the gadget doesn’t work that well?

This enabling happens in every sector of the lifestyle electronics industry. Take almost any product in the smart TV space, for example. Not that great. But you wouldn’t know that from all the noise. These devices have been written up – for the most part – as a good first try and well worth investing in. Android mobile up until 2.1? Same apologetic story (I can’t remember if that version is called Hot Chocolate or Snow Cone).

Every member of the CE industry needs to deliver on the promises of amazing tech. We all need to work together on this and raise our standards, not lower them. When a product doesn’t work – we should say so. If a device ships with a lot of “anticipation” but doesn’t deliver on its promises, we need to say that, too. If most products are written up as “pretty good,” it makes it harder for consumers to distinguish the truly exceptional devices in the field.

16% of Galaxy tablets are returned. Why? The enablers are partly to blame (although with those numbers there is plenty of blame to go around). The bottom line is that we all need to approach tech from the perspective of a consumer. We need to hold companies accountable for shipping bad products. Not in a nasty way, but in an honest way. When that starts to happen, I believe that the overall quality of consumer tech will improve. By encouraging people to purchase products that do not perform as they should, we tacitly encourage bad behavior from the industry as a whole. And that is the definition of enabling.

Feb 16

Posted by Jeremy Toeman and Greg Franzese

Posted in Gadgets, Marketing, Products, Stage Two, UI/UX

Why You Won’t Beat the iPad by Building an . . . iPad

Hey, you look familiar.

If anyone really wants to compete in the tablet space, they can’t do it by creating products that look and feel almost exactly like Apple’s iPad. We’ve blogged on this topic before, but it bears repeating here. Chasing the iPad’s form factor, feature set and price point will not differentiate PC tablets or attract new customers (with the rare exception of the Apple haters, which isn’t really an exciting market to fight about). If anything, we can easily see the decision to copy the iPad driving even more consumers to Apple’s tablet.

The three most prominent tablets in the news right now (that aren’t the iPad) are the Blackberry Playbook, the Motorola Xoom and the recently announced HP TouchPad. What do these tablets all have in common?

They all feature interfaces that look the same as iOS.

It doesn’t matter if competing tablets run Android, Windows or webOS. They all run operating systems that look like the iPad’s iOS. Sure, some tech enthusiasts (read, fanboys) will line up for the next version of Android, but for the vast majority of consumers, all the tablets look the same. This is a disadvantage for iPad competitors. They have failed to innovate and differentiate themselves.

They all have a form factor that mimics the iPad.

All of these tablets look like the iPad (sure, the Samsung Galaxy is a bit smaller, but the device hasn’t sold all that well and suffers from a 16% return rate). For the most part, other tablets are following Apple’s lead. The TouchPad even has the same one-button design. Engadget writes that it “is shaped almost exactly like the iPad.” The Xoom and the Playbook also have a physical profile that mirrors Apple’s original. Where is the innovation from Apple competitors? Where is the tablet that has ten physical buttons (hyperbole here, to be sure, but why only one button)? Where is the tablet that is easier to hold? Where is the slide out keyboard? There are so many ways to create a unique tablet experience, but most tablets today are content with imitating the iPad.

They all have prices similar to the iPad.

Almost all of the competing tablets have price points near the iPad’s (except the crafty Xoom which costs $200 more than an iPad). The failure to differentiate on price is a de facto win for Apple. Quoting from my earlier blog post:

No consumer will want to spend more than $500 for a Windows or Android tablet. At that price point, they will simply purchase the iPad. It is desirable, it is stable, it is fun and has a cultural allure attached to it thanks to Apple’s brilliant design and marketing.

Even pricing below $500 is problematic for Apple competitors. A $300 tablet is just close enough to the iPad’s price that people will probably wind up mowing a few extra lawns or clocking some overtime to get their hands on the genuine article from Cupertino.

They all have the same target customer as the iPad.

Sure, there are a few specialized fields where non-iPads can grow rapidly (think medicine, defense, kids tabs, and enterprise solutions). But apart from those arenas, it seems that every tablet coming out from PC makers is competing directly for potential iPad customers.

They have all announced products that haven’t shipped yet.

There is almost no upside to announcing products that are not complete. All you wind up doing is telegraphing your punches and revealing your plans to the industry at large. And, as if that wasn’t bad enough, these other companies have announced their unreleased tablets prior to the iPad 2 shipping. Has no one read The Art of War?

“The spot where we intend to fight must not be made known.”

-Sun Tzu, The Art of War

Why would a company move its “army” (read, tablet) into field when it knows the enemy (read, iPad 2) is coming very shortly? What advantage is there in telling the world about a new device that isn’t quite ready yet and will ship sometime soon? There is almost no discernible advantage. In general, do not share your product road map, and do not announce products publicly until they are ready to ship.

Conclusion

Hardware manufacturers will not erode iPad’s first mover market position by copying the iPad. In order to gain market share (and mind share) tablets need to show people something they haven’t seen before. Where are the tablets that let you divide the screen into multiple sections and run different programs in each “zone”? Why do all the other choices seem to be copies of the original iPad? Given the explosive growth of the iPad, other tablets need to innovate, not imitate.

Feb 16

Posted by Jeremy Toeman and Greg Franzese

Posted in Stage Two

Why Microsoft Should Kin The Zune

If the first image your brand conjures up is this one, it’s time to build a better brand.

Stephen Elop and Steve Ballmer recently issued an open letter outlining – in great detail – the strategic partnership between Nokia and Microsoft. However, the letter (which is really a press release signed by two CEOs) never mentions Zune once. In fact, it seems that neither company has had much to say about how the Zune brand fits in to the emerging Windows/Nokia mobile ecosystem. This has led some industry observers to conclude that the Zune “brand is on its last legs.“  Paul Therrott writes that “Zune was conspicuously missing—both in discussions from both Elop and Ballmer and on a global reach marketing slide that was created by both companies.”

Where's Zune?

Paul continues:

My sources tell me that the Zune brand is on the way out and that all Zune products and services will be moved into other businesses, including Windows Live. Zune will essentially cease to exist under this plan.

Mary Jo Foley has more at ZDNet, including a standard “we are not killing off Zune” statement from Microsoft and this clever piece of reporting:

Some veteran Microsoft heavy-hitters are moving to the Xbox division, as I’ve blogged recently, and are seemingly working on some kind of services-focused project . . . Maybe the Zune service will end up as part of the evolving Microsoft IPTV strategy?

It seems likely that Zune will be rebranded (as Windows Live or XBOX Media) or killed off in the coming months. Some have opined that getting rid of the Zune brand would be “foolish.” However, nothing could be further from the truth.

Here’s why Microsoft should Kin the Zune.

Zune is not a great brand.

It doesn’t stand for anything and people do not have a positive emotional connection with Zune. MSN is a more desirable brand at this point, as is XBOX.

Killing Zune is cost effective.

Look at how much money it would take for Microsoft to turn Zune into a desirable, fun, meaningful brand versus how much money it would take to acquire a new media brand. Zune supporters argue that Redmond is “pot committed” to the brand, but this is not correct. Any additional investment in Zune is throwing good money after bad. It’s good branding and good business to kill Zune.

Microsoft has killed off bad ideas before.

Look no further than the Kin. Even after something has come to market, Microsoft isn’t afraid to put struggling products out of their misery.

Conclusion

There is no reason to doubt Microsoft’s ability to compete in this sector. They understand the need to build a Windows-based mobile ecosystem (as the Nokia deal attests to). And they know that a big part of mobile is delivering media. I trust Microsoft to ramp up a competitive iPhone/Android alternative that gives consumers easy access to movies, photos, games and music. They are capable of doing this well and in a timely manner. They just shouldn’t attempt this with the Zune brand.

Feb 15

Posted by Jeremy Toeman and Greg Franzese

Posted in Blogging, Products

Apple: Doin’ It Right

Apple is now the most valuable tech company on the planet. In fact, the Cupertino firm is worth $100 billion more than Microsoft and Google, its next closest competitors. According to TechCrunch, Apple is “a little over $90 billion away from becoming the overall most valuable public company in the world.”

Impressive, especially when one considers that the company was six weeks away from filing for bankruptcy not so long ago. So what is the secret behind Apple’s turnaround?

I have long maintained that there are no real secrets to Apple’s success. The company creates simple, stable products that people want to use. They engage in brilliant marketing and advertising campaigns to promote consumer electronics that are well designed. Nokia CEO Stephen Elop mentions Apple’s success in his infamous “burning platform” memo.

Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range [of smart phones] . . . The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience.

The focus on experience is telling here. Apple’s emphasis on design and usability creates products that are both stylish and enjoyable to use. There is a “cool factor” and a “fun factor” embedded in all of Apple’s devices. Simply stated, Apple designs, builds, markets and delivers technology that people love to use. The positive emotions users feel when using Apple technology results in increased and repeat sales.

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