Over the years, I’ve watched company after company lose its invaluable edge because executives critical to its success moved on, or died, and didn’t pass on critical skills. Only IBM really made a massive effort not to screw this up, and even it eventually forgot, forcing a massive reset — which almost caused it to fail — in the late 1980s and early 1990s.
Sony Walkman, PlayStation, Trinitron; Palm PDA; RIM BlackBerry; Microsoft Windows 95; Intel Inside; Cisco Flip Camera; and now it looks like I’ll be adding the iPad to this list in a few years.
It really doesn’t seem that difficult to take something that is already incredibly successful and keep it so. You’d think the hard work (and it is) would be in creating success in the first place. But we forget that people move on and, unfortunately, don’t live forever either. When they go, often that hit product goes with them. Rarely does the product get worse; it often just loses its way or, in the latest case, loses the magic.
I’ll lead you on a trip down bad memory lane and end up with the best/worst Apple product launched post-Jobs so far (because I think it will get worse). To be clear, I think the product (Siri omission aside) is fine — it’s how it was presented that sucked.
I’ll end with my product of the week: Corel’s VideoStudio Pro X5, likely the best affordable easy to use, semi-pro video editor on the market.
Sony: The Apple Model
Sony has been down this path a number of times, so I’ll pick the two it could have most easily avoided: the Walkman and the PlayStation. It owned portable music with the Walkman, and it kept that ownership from the cassette to the CD version. Its products were well designed and very easy to use. They often cost a premium, but folks were willing to pay it — and that was largely why Steve Jobs modeled the product side of his Apple turnaround on them.
Anticipating the need to tie its hardware to content, Sony bought up record and movie companies but then failed to tie them together. You see, instead of being an advantage, owning content became a disadvantage. While Apple could make it very easy to get music for the iPod (initially rip CDs), Sony was so afraid of piracy it wrapped its much better-looking devices with DRM (security software) that made them impossible to use.
Sony forgot that “ease of use” was a key attribute, and instead of using its content ownership to make its devices easier, it went the wrong way, and the iPod took the crown from the Walkman.
On the PlayStation, it held for two versions — the first and the PlayStation 2. Recall that parents bought these things, and there was a US$300 ceiling on what parents were willing to pay. With the PlayStation 3, Sony let the engineers rule, and they needed something to drive their Blu-ray format into dominance, so the PlayStation 3 cost — wasn’t priced at — cost nearly $1,000 to build.
It sold for around $600, or twice the known ceiling. Sony took its biggest margin product and in one fell swoop turned it into its biggest loss, and the more the sold, the worse it got. Nintendo took the market from them with its Wii, priced under $200.
In both cases, Sony was as dominant as Apple isnow, and in both cases, it forgot the rules it helped establish and catastrophically gave the market to another vendor. Sony has never fully recovered from those mistakes.
Palm: So Close
Palm had the product that really set the stage for the iPhone. Ironically, it largely came from the ashes of the Apple Newton, which died because it was presented the wrong way. Rather than pitching it as a super calculator or PDA, Apple showcased handwriting recognition as its key feature, and that didn’t work.
Palm learned from this and had a custom language called “Graffiti,” which only a few really learned, but it worked. At one point — like Apple — it was trending to be the most valuable technology company.
Where it screwed up was in making the transition to phones, which it didn’t do properly. Initially, it caught the mistake and bought another company that was founded by its founders (kind of like what Apple did with NeXT), bringing the founders back. In the end, though, it had just lost too many key people, and it couldn’t compete.
Its death finally came after it tried to create an iPhone event with ex-Apple people who clearly hadn’t learned how to do what needed to be done. They took an excellent product and effectively killed it, showcasing that working around Steve Jobs isn’t the same thing as learning how to do what he did.
Intel under Andy Grove and Dennis Carter did something that folks said couldn’t be done: It created consumer interest in a component. At its peak, Intel Inside became a quality brand, which allowed Intel to price above AMD and still win business.
When Steve Jobs took over Apple, he began a secret project to convert Apple to Intel. He befriended Andy Grove to get the job done, even though during all of this, he marketed his PowerPC-based PCs as better than Intel.
When Carter left, he was CMO, and folks seemed unable to figure out how he did what he did. The biggest mistake was taking the Bunny Men — an iconic image that folks visiting the Intel plant still ask about today — and destroying them with a Super Bowl ad that portrayed one as a criminal.
In one fell swoop, Intel took a billion-dollar image crafted over years and burned it to the ground. Today folks just don’t seem to care that much about the technology inside their products anymore, which has, up till now, benefited Apple with its iPhone, iPod touch, and iPad — all of which increasingly have only Apple inside.
Now this is almost criminal. RIM owned the smartphone space before Apple, and it did so with a better device for email and all forms of bidirectional text-based communications. This product was far safer than the iPhone — you can blind type, which means for folks who can’t stop texting and driving, their eyes are more likely on the road. It was more robust than the iPhone as well — replacing screens on iPhones has become a very profitable business. It was more secure than the iPhone, and initially it was called the “crackberry,” because folks were so addicted to it.
Rather than contesting Apple’s changes, RIM tried to embrace them, and with the BlackBerry Bold created a device that was nearly as good and nearly as bad as the iPhone, but without all of Apple’s unique advantages.
Effectively RIM seemed to agree that Apple’s way was best and found it couldn’t build — and no one ever can — a better iPhone. Then came the PlayBook, which was arguably, when partnered with a BlackBerry, the best blended product on the planet. It didn’t require a separate contract, and it extended the BlackBerry. But once again, RIM marketed it poorly. It was presented as an iPad alternative, suggesting that Apple’s product was the bar RIM couldn’t meet.
I can picture Steve Jobs saying “what fricktards!?!” I’m sure he thought he was going to have a fight and then RIM threw it.
Wrapping Up: The Worst Best iPad
The iPad is basically a premium netbook (remember those?) that has replaced the keyboard with a larger screen. The Netbook failed (except in third-world countries) because people saw it as a crippled notebook. The iPad succeeded because they saw it as something new and different.
What really made the difference wasn’t the hardware (though it clearly helped) but the entire package of services, apps and experience. Steve Jobs convinced folks the product was magic, and even though it was actually rarely used, many people still saw it as a “magical” device.
Tim Cook is clearly no Steve Jobs. During the pitch, he talked about the processor and named Nvidia, which actually has a better part (Tegra 3 has five cores and 12 shaders; Apple’s has two cores and four shaders). He highlighted “Dictation” which suggests, like handwriting recognition and the Newton, that you’ll get something far better than you’ll actually get.
He left out Siri, the signature feature on the current iPhone, and didn’t provide a date (suggesting execution problems). Finally he didn’t even really name the product, just “New iPad” — like the unsuccessful “Apple TV” (which it refreshed during the launch).
In short, while the New iPad is clearly better than the iPad 2, Apple broke a ton of Steve Jobs’ rules in presenting it, repeated John Scully’s mistake with the Newton, actually resurrected Intel Inside (but with Nvidia), and left out the “magic.” It was the worst presentation of an Apple product since Jobs came back in 1996.
Apple needs to find a way to get Steve Jobs’ skills back. If it doesn’t, it will end up as another entry on this list of shame.
Product of the Week: Corel Video Studio Pro X5
Corel’s Video Studio Pro, now in its fifth version, is an amazing product. It has semi-pro features that allow you to take raw footage from your smartphone or tablet cameras and turn it into really interesting content that looks and feels professional.
If you want to build an on-screen video tutorial it does that. If you want to output in HTML5 (the new Flash), it’ll do that. If you want to layer graphics into your video, it will do that.
You can both create and share unique templates that give your movies a custom look. You can put the interface on one screen and work on the second on a two-screen desktop, and you can add music and sound one track at a time.
The product is priced at less than $80, which is a steal given what it can do for you. As a result, Corel’s Video Studio Pro X5 is my product of the week.