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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!

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  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 ?

  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.

  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.

  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.

  5. Quickthink » Blog Archive » Psst — Want to be a Market Leader? Monday, January 26, 2009

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

  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

  7. vinnie mirchandani Monday, January 26, 2009

    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

  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.

  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.

  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.

  11. Good post, but here’s an important point: in any given field there are a finite amount of highly talented people with the skills required to consistently produce a high-quality product; this is a common oversight in technology reporting.
    I think it’s fair to say that Apple has the highest concentration of highly talented people creating, polishing, and producing hardware and software products (and everything it takes to market those products). Additionally, talent attracts talent, making it increasingly difficult for other tech companies to find the talent needed to compete at Apple’s level.
    Certainly other companies have talented people on staff, but they simply don’t have the overall depth of talent that Apple obviously possesses.
    Sports, filmmaking, and governments are additional examples of how a team’s overall talent depth impacts output quality. I’m not sure why so many people miss this point in tech reporting/commenting.

  12. I’m pretty tired of hearing absurd claims about the iPhone being the revolutionary device, and the Blackberry as an also-ran. I distinctly seem to recall it being the other way around. The Blackberry was the revolutionary game changer, and the iPhone, the late coming feature dropper.

    Keep in mind this is RIM we’re talking about. In the Mobile space, they’re the real Apple of the business – the ones coming out with the insanely great devices others are late to the party with.

  13. Doug, as the owner of four different models of RIM devices over the years, I can’t agree with you that RIM makes “insanely great” products. While functional, Rim’s devices are not “polished” in a way I appreciate.

    People often confuse polish used in this context with superficial, so will define polish here as successfully implemented functionality that looks and feels “good”. The gestalt experience.

    Not important, or noticeable, to everyone.

    In any case, Apple is not competing with RIM, but RIM is competing with Apple.

  14. Another issue I encountered with my Storm after having it for only 2 days is last night the battery went completely dead so I plugged it in to charge. I plugged it out this morning, turned it on and it started going haywire doing all kind of weird stuff. I had to a hard reset to get it working again… Anyone else had this problem? I really love this phone but after reading alot of the posts, seems to me like this phone has the potential to have alot of issues.
    share your stories at http://www.Storm-BlackBerry.com

  15. @JeremyRoush: “Sports, filmmaking, and governments are additional examples of how a team’s overall talent depth impacts output quality.”

    Nice, insightful post.

    I’ll add this: Sports, filmmaking, and government” is predicesly three places where Apple is making serious inroads. The magical part? They didn’t even have to try.

  16. Worst thing RIM, nokia er al ever done was come up with a iphone equivalent. They’ve allowed themselves to be dragged off course by Apple. Innovators should do just that, not attempt to jump on the bandwagon. Do i use an iPhone because its touch? NO. I use it because of its superior UI, OS, general usability and the fact that it feels like it was built to game. Palm get it…

  17. Blackberry Storm Tuesday, January 27, 2009

    This phone will be a serious contender to the iPhone. I adore that how winning the Blackberry App Store will be since the Apple App Store is the standard. As well, can I sync my iTunes crap to the Storm because iTunes is hands-down the best multi-media application out there. I’m not so concerned about the size because it is smaller than the iPhone except for the thickness for which the iPhone. Regarding weight, the iPhone is smaller than Storm.

  18. I love my storm you guys can have that kids toy from apple, I don’t like that company will not use their products. Keep bashing the storm it works great for me.

  19. jkOnTheRun » Blog Archive BlackBerry Curve 8900 Reviewed; Has me Thinking « Wednesday, January 28, 2009

    [...] for me since it addresses the 3G concern and is already available on AT&T’s network. Om loves his Bold, although he’s already chomping at the bit to switch to the 8900. I’ll have to dig [...]

  20. BlackBerry Storm More Expensive To Build Than iPhone 3G (AAPL, RIMM) « MacRevu Thursday, January 29, 2009

    [...] falls flat – MacDailyNews Bumpy Start for BlackBerry Storm – Wall Street Journal BusinessWeek – GigaOm – MSN [...]

  21. I know what Microsoft should do to improve their Zune sales: get someone besides the big, hairy guy with a Zune tattoo to be their marketing front man/woman

  22. Feature the Storm has that are lacking in the Iphone
    1. Removable battery w/longer battery life
    2. Removable/Upgradeable memory
    3. Multitasking
    4. Tactile touch response
    5. MMS
    6. Cut/Copy & Paste
    7. 3.2 MP Camera
    8. Video recording
    9. Stereo bluetooth
    10. Verizon service and coverage

    The Storm is as equivilent to an Iphone as BMW is equivlent to Kia because both happen to have 4 wheels and motor. Some will defend their KIA, but it will normally be out of envy, ignorance or both.

  23. The problem that I see with the Storm is that RIM was overly proud and arrogant and thought that the iPhone was selling so much just because of the novelty and the touch-screen, so they went on and placed a touch screen over their Bold (and even removing things the Bold has), added the clicky thing, and thought all the smartphone lovers would come back of their own.

    Wrong.

    The iPhone wins because of all the support and all the thinking and insight that was put in its making and continuation. The best browser, the Apps Store, the new versions, the iTunes support and how easy it is to use, just to name a few.

    RIM never thought on what adding a touch screen meant, and that’s why this Storm sucks but maybe the next one will be a lot better.

  24. BlackBerry Storm Arrives in China for Enterprises Monday, May 17, 2010

    [...] to dethrone Apple’s iPhone. But it was plagued by poor reviews and a buggy implementation. As Om noted in January 2009, with the Storm, RIM didn’t play to its strengths; instead, it attempted to create an [...]

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