March 2011
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Month March 2011

Disruptive failure: How Acer Took Aim at Dell and HP and missed

Two years ago:

With new netbooks, laptops, desktops, and, yes, a smartphone, Acer CEO Gianfranco Lanci explains why he expects to soon overtake No. 2 PC maker Dell

via Acer Boss Lanci Takes Aim at Dell and HP – BusinessWeek.

Today Acer CEO and President Gianfranco Lanci resigned with immediate effect. Acer is in trouble. You can read more on Acer’s current problems in the wake of the downward revision of its sales targets for two quarters here: Acer Should Overhaul Its Operation: Stan Shih | CENS.com – The Taiwan Economic News

In a nutshell, whereas Acer under Lanci took aim at Dell and HP, it seems that Apple took aim at Acer. And whereas Lanci missed, Apple’s aim was true.

What is interesting here is that Acer had a very disruptive approach. They used the low end “netbook” concept to take share from incumbents motivated to move up-market.

But what went wrong?

[Sponsor] Technology Coast Consulting: A new report on Smartphones in the US Enterprise

I’d like to again thank Technology Coast Consulting and Galvin Consulting for sponsoring the blog this week. They prepared a report “Smartphones in the US Enterprise” which includes a large number of interviews with industry participants which you won’t find in public forums.

Technology Coast Consulting and Galvin Consulting directly support clients and mid-tier research firms on hundreds of market intelligence and primary research projects.  These research organizations’ combined expertise extends from mature hardware and software to emerging technology. They also offer the services and support required to deploy and maintain these solutions.

For the past decade these firms have developed relationships with subject matter experts and industry influencers worldwide.  These connections put them in close proximity to the tactical and strategic information that IT, product management, marketing and sales executives seek.

By interviewing thousands of technology consumers Technology Coast Consulting and Galvin Consulting obtain an understanding of the integration of technology within corporate enterprises and the application of technology within a given industry.

For additional information, please visit:  Technology Coast Consulting or Galvin Consulting.

 

The controversy of playing it safe: What's IDC's Smartphone Market Message?

IDC released a new forecast for the worldwide smartphone market which included a long range forecast–all the way to 2015.

Most people fixated on the share data in 2015. Not hard to do since whoever wrote the press release highlighted this flashy headline. Putting aside the three significant digits of accuracy on every data point and the hard to swallow declaration that a painfully underperforming (in more ways than one) Windows Phone will overtake iOS and BlackBerry to become the second largest platform by units/year in 2015, there is much more to the report.

Using only the public data from the press release we can put together a pretty good picture of the transition being forecast and determine some of the (unstated) assumptions being made. It’s these assumptions about the underlying market dynamics which illuminate far more than the falsely precise share data.

The Post PC era as explained by developer events

The World-Wide Developer Conference is an event for developers. It is not a trade show and it is not a consumer show or an enterprise show for salespeople. Except for the keynote, all events are subject to Non-disclosure Agreements so it’s not even an event whose proceedings can be discussed openly.

It’s also expensive. Registration is at least $1,500. Attendants are there to learn and ask detailed questions about development. It’s not for deal making. People not familiar with development would not be well served by the event. Registrations are therefore somewhat limited to about 5000.

After the iPhone SDK was launched, the WWDC took on a new dimension. It became a mobile development event. As a result, 2008 was the first year when WWDC sold out. Attendance tripled over the Mac-only event the previous year.

Every year since, not only has WWDC sold out but it has sold out quicker every time. The following chart shows the days it took to sell out WWDC. I also added Google I/O data for comparison.

In the era of the iPhone, the limited resource of attendant seats has always been exhausted at accelerated rates: from 60 days in 2008 to 0.5 days in 2011. A similar pattern emerged for the Android event.

What should be noted is that these events are focused on post-PC development[1][2]. Clearly the increased interest among developers is for the mobile side of the business.

Developers certainly seem to sense the way the wind is blowing. They are, as humans, prone to over-confidence but they are also often accused of being hard to please. The most common lament among new platform builders is “How do we attract developers?”  The platforms showcased here had no trouble attracting developers in the tens of thousands three years after being launched.

The Post-PC era is evident in all kinds of data. This set (developer attendance to mobile development) is particularly stark. It’s a proxy for investment and IT interest. There is a non-linear nature to this growth and history shows that non-linearity leads to unpredictable or unforeseeable change.

Notes:

  1. WWDC still has Mac OS X tracks but that track was there pre-2008 and did not sell out the event.
  2. Microsoft hosts several developer events (PDC, MIX, and Tech·Ed) some of which also sell out, but they have a far wider focus.

Predicting iPhone sales for dummies

Apple’s second fiscal quarter has just ended. Time for analysts to put forward their predictions for the quarter’s report (due in about 3 weeks.) If history is a guide, the estimates will range quite widely and accuracy will be determined mostly by the ability of an analyst to predict iOS device sales (and iPhone most of all).

How hard can it be?

Understanding RIM's tablet platform app strategy

Yesterday RIM reported their quarterly earnings. The results were mixed to slightly negative and the shares were down 10% in after-hours trading.

I’ll work through the smartphone market data at a later time but for now what I want to focus on is RIM’s strategy which really means understanding RIM’s intentions or their approach to the market. For that we have to go straight to the source: what management actually says. Trouble is, management often speaks in a jargon that is unfamiliar to people (sometimes unfamiliar to anyone outside the company).

Strategy analysis involves translation. So here follows the interpretation of Jim Balsillie’s remarks during the conference call (transcript sourced from Businessinsider.com).

Analysts: Apple's growth next year to drop to half of what it could obtain during the recession

Apple is having difficulty meeting demand for the iPhone and the iPad. It is growing both businesses at more than 100% and they make up about 65% of revenues, and 71% of profits. The Mac business is also growing at 2x to 3x the PC industry.

Being supply constrained makes it therefore a great challenge to forecast future growth for the company. Supply issues and ramp rates are needful of an operational expertise few possess outside of the industry. But many take up this challenge, myself included. We put up our numbers every quarter and get scrutinized and challenged for our failures.

So it’s always exciting to see how others are looking at the big picture.

[Sponsor] Technology Coast Consulting: A new report on Smartphones in the US Enterprise

In my blog I rely only on public sources but there are times when interviews with industry participants can really inform tactics and strategy. This is the sort of heavy lifting that Technology Coast Consulting and Galvin Consulting did to prepare their report “Smartphones in the US Enterprise.”

Technology Coast Consulting and Galvin Consulting directly support clients and mid-tier research firms on hundreds of market intelligence and primary research projects.  These research organizations’ combined expertise extends from mature hardware and software to emerging technology. They also offer the services and support required to deploy and maintain these solutions.

For the past decade these firms have developed relationships with subject matter experts and industry influencers worldwide.  These connections put them in close proximity to the tactical and strategic information that IT, product management, marketing and sales executives seek.

By interviewing thousands of technology consumers Technology Coast Consulting and Galvin Consulting obtain an understanding of the integration of technology within corporate enterprises and the application of technology within a given industry.

For additional information, please visit:  Technology Coast Consulting or Galvin Consulting.

The American Wireless Galapagos Syndrome: How the industry set itself up for a rout

AT&T’s intent to acquire T-Mobile USA is subject to regulatory approval. Will regulators look at the deal through the lenses of sustaining the traditional industry’s profit allocation or through the lenses of device-led disruption?

In theory, regulators are to make a determination on whether the deal will reduce customer choice. But the question is really choice of what? The focus is presumably on the choice of service plans. That’s understandable, however coupled to that choice is the choice of devices and even more importantly, the choice of platforms.

The trouble is that US consumers have never had much choice and the US wireless marketplace has been a minefield of incompatibilities and obstacles to market forces.

Saturation of mobile subscriptions and the acceleration of mobile broadband adoption

 

 

data source: ITU