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Summary:

Everyone from Microsoft to Verizon to Research in Motion who suffers from Apple envy need to learn one thing: If you want to beat Apple and its hit products, then you have to make products that are both game-changing and revolutionary, not me-too products with a […]

Everyone from Microsoft to Verizon to Research in Motion who suffers from Apple envy need to learn one thing: If you want to beat Apple and its hit products, then you have to make products that are both game-changing and revolutionary, not me-too products with a few feature tweaks.

Microsoft came out with Zune to compete with the iPod, added a couple of features, and proved to be one giant money sink for Microsoft. After a 54 percent decline in sales in the most recent quarter, John Paczkowski rightfully dubs it: Zune to be forgotten. It’s the same story with the BlackBerry Storm. What was supposed to be a hurricane has so far turned out to be a mild tropical disturbance. The Wall Street Journal says the Storm is off to a bumpy start, and has sold about 500,000 devices in its first quarter.

Now if Research in Motion (and Verizon) were smart, they would have tried to do something incredibly different with their BlackBerry Storm. Instead they spent $100 million on marketing a product that got panned by critics, was buggy enough for customers to complain and more importantly, turned out to be nothing more than a wannabe iPhone. The problem most touchscreen phones face is that they will always be compared to Apple’s iPhone and for a myriad of reasons will fall short of expectations. It happened before in the music player market — where the iPod, with its ease of use and elegant design set, itself on a higher pedestal.

And when it comes to touchscreen phones, iPhone occupies a similar top spot. Don’t get me wrong: The iPhone is by no means perfect, and at least twice a day I curse the device and AT&T’s network. But the Storm is even worse — enough for me to touch the screen, wait and scream.

I often write about companies forgetting to play to their own strengths and instead trying to follow others. Storm (and Zune) are good examples of this corporate disease. Why does RIM need to have a touchscreen device? Just because Steve Jobs tweaked Verizon’s nose? Verizon and RIM would have been better served if they had built a device that had touch capabilities but really played to RIM’s strengths — keyboards, multitasking and security. I love the BlackBerry Bold. It’s almost perfect for someone like me who gets a massive amount of email, loves to IM on the go and likes to Twitter all the time. Marry it to a great browsing experience and pack in better battery life and an awesome radio — and it would clean up in the smartphone market.

Meanwhile, I’m looking to trade in the Bold for the new T-Mobile 8900 Curve!

The post landed me on Yahoo Tech Ticker. Check out the video:

  1. I think if they do a me2 but with a difference, it could work. Look at the social networking space. Dating Sites evolved to Friendster to Facebook to Myspace/Orkut. The latter 3 are still surviving by targeting a different demographic or region. what do you think ?

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  2. Great post Om. The poster child for your argument (wrt to successes) has got to be Nintendo and the Wii. Talk about parlaying strength and differentiation against what could have been a 3-way console shootout based on brawniest device and most hardcore games. Instead, Wii left that battle to Microsoft and Sony and struck out on a completely different course and that strategy seems to be paying huge dividends now.

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  3. Ok. Om, dead on. But I hate to hear it, especially that Zune news. I was a Zune-phile for quite some time, now I am an iPhone user. Whatever.
    Point is we need the competition. Case in point: when the Pre comes out, I am switching.

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  4. I don’t doubt that many or even most Zune owners are satisfied with what they have. Here’s my thing: Apple dove into the MP3 market when that market was already well on its way to maturity. The iPod quickly made a big splash, and iTunes has played no small part in helping the iPod acquire a 70% market share. Apple did not engage in illegal, monopolistic business practices in order to achieve that level of prominence; nor did Steve Jobs hypnotize buyers, steering them towards the iPod.

    When the iPod was released in October of 2001, it succeeded during a recession caused by the terrorist attacks of 9/11. If the current economic climate adversely affected the Zune and other consumer products, then it stands to reason that it also adversely affected iPod sales. Yet, Apple reported a growth in iPod sales for the most recent quarter, versus a 54% drop in Zune revenues. How much better would the iPod have faired this quarter without the deepening recession?

    I believe that Microsoft and its investors need to re-evaluate the Zune with regard to how it affects other products, and how it affects shareholder interests. If I’m a Microsoft competitor — and I don’t believe that Apple and Microsoft compete in the sense that they appeal to very different groups of customers — then I truly hope that Microsoft continues to throw money and other resources at the Zune. Let them and their investors learn the hard way. Again.

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  5. [...] those interested in this problem, check out this Gigaom post about firms copying the IPod and IPhone. Great post! The copying strategy can work [...]

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  6. Unfortunately when you let the greedy sales staff control product development that’s all you get – “me too” products. Factor in short sighted ( and even greedier ) VCs and majority shareholders, then you get “me too” products released without testing onto the market…”Who ares if it works, just ship it, NOW!”

    This Tim O’Reilly quote may expose the root cause of Zune, Storm lameness:

    “Create more value than you capture. It’s easy to get caught up in the heady buzz of making money. You should regard money as fuel for what you really want to do, not as a goal in and of itself.

    It’s also clear that if you’re thinking more about the competition than you are about customers and the value you’re going to create for them, you’re on the wrong path.

    It’s a matter of balance. Every business needs to pay attention to its bottom line; every individual needs to put a roof over his or her head and provide food for loved ones. But take a look inside: how much are you thinking about yourself and what you might gain, versus what you might create?”

    http://radar.oreilly.com/2009/01/work-on-stuff-that-matters-fir.html

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  7. Om, if the iPhone has an Achilles heel, it is At&T. Most competitors have tried to out feature the device, but don’t have a substantially better TCO (where AT&T is vulnerable) or speed of network (amazingly the Storm even came without wifi) see my post…

    http://dealarchitect.typepad.com/deal_architect/2009/01/why-every-iphone-killer-misses-its-mark.html

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  8. I have to disagree a bit Om. The Storm was released at a time where the economy was in the crapper, and half a million units isn’t that bad of a figure really (it’s more than the G1 sold). I know, it has to be compared to the iPhone because it wouldn’t exist if Apple didn’t have their products, but let’s not forget the iPhone 3G had multiple software issues upon release. It didn’t quite get panned by the likes of Pouge (I wonder why), but I think what we’re forgetting is how game-changing the App Store has been.

    On another note, I’ve had a Storm for a little over a month now and am very happy. I sure wish apps would have deeper access to the OS, but I’ll take multitasking any day.

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  9. I love the Bold also. The reason I choose it over the Storm was the wifi and the keyboard. Too bad it is only available through ATT. Their 3G network pretty muchs sucks.

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  10. Om,
    Well said. Another key stat missed by you and all the other media is how many of these were returned within 30 days ?

    Storm concept is neither physical key board nor touch screen , its in between. This made the device harder to use on a day to day basis. Then there is the web browser , a nice web browser would have been a great addition to this device. But the current one cannot hold against the safari mobile , not even against Opera.

    Horrible browser , lack of WiFi killed this device. This would have been a perfect one if they fixed the key board , added WiFi and improved the browser.

    The only respectable spec is a TRUE GLOBAL ROAMING option . I love to have a phone that works on CDMA and GSM.

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