Archive for November, 2006|Monthly archive page
Not good news for Sony (and lots of hungry young gamers with $600 in their pockets for that matter), but I doubt Nintendo or Microsoft is feeling bad. Rumor has it, that Sony shipped less than the already reduced 400,000 PS3 consoles it said it would have in stores last week. By now you’ve all seen or read about the craziness that surrounded the release of the PS3 last week…that craziness ranged from gun shots being fired at one store in Connecticut to near riot conditions in front of several Best Buys and Circuit City’s around the country. In one word, pathetic. On the other hand, the mainstream media and bloggers alike were quick to pick up on the “civility” of the Nintendo Wii release…no gunshots, no riots, just a chock full of courtesy and a side of friendliness. It probably doesn’t hurt that Nintendo shipped about five to ten times the amount Wii’s compared to what Sony shipped for the PS3. Supply and demand at its finest.
Is the traditional camcorder going the way of the VCR. Recent trends indicate that the answer is “yes” and its a big problem for camcorder makers and CE retailers.
Sales of camcorders have fallen 6.7% to $785 million so far this year, according to researcher NPD. In a recent article entitled The Coming Camcorder Conundrum, BusinessWeek points out that the traditional camcorder is being replaced by……. wait for it……. the Cellphone. Consumers are also opting for low-cost, flash-based, disposable recorders.
“Many consumers are looking for less expensive, less complicated machines, and in growing numbers they’re adopting devices on the low end. Pure Digital Technologies specializes in disposable, point-and-shoot, flash-memory-based camcorders. Its latest point-and-shoot model, released in October, holds up to 60 minutes of video and sells for about $129.”
Pure Digital understands what most people are doing with video these days. They are creating content for distribution on the web and Pure Digital is building disposable camcorders that interface to Google Video and Sony’s Grouper. A YouTube interface is in the works. Pure Digital believes that the traditional camcorder market, reaching fewer than 3 million units a year, will expand to more than 20 million devices sold as disposable and point-and-shoot camcorders proliferate.
The phone manufacturers are on the same track. The quality available on phones and other low cost devices doesn’t compare to today’s high-end camcorders, but they make up for it in ease of use and price, and over time, the quality will get better.
“Sony is losing hundreds of dollars on every one they sell, supply is limited and …people are getting shot in the frenzy to buy the game.”
“And yet Nintendo hums along, with great reviews, plenty of supply and a long-term hit on their hands.”
While Sony postures itself like an aging rockstar, promoting it’s overpriced, proprietary scheme for dominating your living room, Nintendo continues to focus on the gamer’s experience. In the end, it’s the experience, not the technology that will win the devotion (and dollars) of gamers.
Karl Long over at Experience Curve posted about an innovative new feature that Amazon is running:
Nice little interactive “e-tailing gameshow” from Amazon, essentially they are putting up 4 products with super low prices ie. xbox for $100, or a full suspension mountain bike for $30. The community votes on which product they want for the cheap price. The winning product will have a limited quantity (1000 xbox’s), and will go on sale on thanksgiving day at 2pm EST.
No surprises on what people are voting for…. the $100 xbox.
OK, I lied!!! I said I wouldn’t post anything else about SecondLife this week, but the news keeps coming. Dell announced yesterday that they have set up shop in SecondLife making virtual computers for avatars. They made the announcement in Secondlife, a trend that is becoming pretty common and generally annoying realworld business journalists. From Dell’s press release:
“Innovation has always been at the core of Dell. Innovation coupled with the idea of working directly with its customers has now led Dell to participate in Second Life, one of the hottest, most popular 3-D virtual worlds.”
“Tuesday, November 14, Ro Parra, Dell senior vice president and general manager, Home and Small Business Group, and Philip Rosedale, Linden Lab founder and CEO, gave an exclusive preview of Dell Island in Second Life. Following this invitation-only event the island was open for the public to visit.”
Why is Dell going here? It certainly isn’t to make money from virtual computer sales, but you can buy a real PC on their island and have it shipped to your realworld address. In light of the other announcements this week regarding IBM and Amazon, this is beginning to validate the belief of many (including me) that the future of commerce on the internet is 3D.
More pictures of Dell’s virtual facilities are here.
OK, I promise this is the last post about Second Life for this week, but since I blogged about this way back in June, I just gotta tell you the news. Several Second Life residents have set up shops on the world’s most popular retail shopping site, Amazon.com. They want to use its virtual environment to actually sell physical goods via Amazon.com.
Linden Lab of San Francisco, creator and operator of Second Life, doesn’t track the Amazon goods sold, since Linden doesn’t make money from the sales. Nevertheless, the extension of Amazon.com’s reach into a place with more than 1.3 million residents has potential for big sales over time, given Second Life’s growth rate. Since September, the population of the online world has jumped from 735,000 subscribers to more than 1.3 million. Second Life residents do a total of about $6 million worth of business a month, up from about $2 million a few months ago.
This is an unprecedented linkage between one of the largest online virtual worlds and the world’s largest (physical) online retailer. Inhabitants of the Second Life online universe will now be looking for real-world money by setting up stores powered by Amazon.com, Inc. (NASDAQ:AMZN).
I have to imagine that anyone savvy enough to reside virtually in Second Life and build a community in that environment probably already knows about Amazon.com’s role as a real-life provider of goods. But that’s not what’s at stake here.
Turning a “browser” into a “buyer” requires the right combination of mood and environment — and Second Life inhabitants are by nature more tuned in to this than most.
As for Amazon, the 1.3 million citizens participating in Second Life ain’t no small potatos. That a demographic ripe for mining. Now whether it becomes a fixture in Second Life will be left up to its members, as they are the ones who will continue to build the revenue-sharing virtual stores and write the scripts needed to integrate with Amazon’s web services for third-party retailers.
|IBM employees in Second Life at a break-out session after a keynote address.
I’m not sure if this post is about SecondLife, Innovation, Co-Creation or all of the above. Read on and you can decide. This past Summer, IBM conducted the latest in it’s series of “Innovation Jams“. The “Jam”was conducted online over the course of 72 hours. During that time, every IBM employee was invited to join in a candid, broad-ranging exploration of enterprise-wide issues, challenges and opportunities. IBMers were asked to post ideas on specific issues and topics, build upon the ideas of others and rate the ideas that had the greatest potential to transform their company. Everyone — from the CEO to a college intern fresh off campus — had a say in the matter, and this time, they invited customers to participate.
IBM pledged to invest $100 million on the best ideas to come out of the Jam. One of the four markets explored was called “Going Places” and it focused on topics such as travel, transportation, and virtual experiences. I participated in the discussion and being fascinated with Secondlife, I spent most of my time in this area of the forum. The discussion around virtual worlds and SecondLife in particular was enthusiastic and there were apparently enough good ideas to convince IBM to put 10% of the kitty into developing a presence in SecondLife.
Reuters has a story up about IBM’s continued push into Second Life and other virtual worlds: IBM accelerates push into 3D virtual worlds
IBM has embraced Second Life to an extent unmatched by any other major company — it has more than 230 employees spending time in-world, and it owns some half-dozen islands. Some are open to the public, but most are private, with restricted access for the public. In the Reuters article, Chairman and Chief Executive Sam Palmisano (photo & Second Life avatar to the right) talks about these efforts:
“Big Blue has already established the biggest Second Life presence of any Fortune 500 company. It is also looking to build a 3D intranet where its clients will be able to discuss sensitive business information.”
According to the article, he will be meeting with “in-world” employees on one of IBM’s private Second Life islands on November 14th after a real world town hall meeting with 7,000 employees in China.
So far in Second Life, IBM has set up a simulation of the Wimbledon tennis tournament, using data that tracks the position of the ball to re-enact points several seconds after they happen. It has also held virtual events such as an IBM alumni reunion.
IBM has it’s very own “multiverse evangelists”. IBM created these visionary positions within the company to go out and preach the virtues of virtual worlds to their customers and to the world(s). These evangelists recently detailed IBM’s Second Life activities in another Reuter’s article: IBM eyes move into Second Life ‘v-business’
Seeing how they practically coined the word “e-commerce”, you have to think they are serious about this emerging v-business. Sam Palmisano is quoted in the article as saying,
“We always ask the question, ‘if you knew 20 years ago what you know about the Web today, what would you do differently?’” Sandy Kearney, IBM’s director of emerging 3-D Internet and virtual business, told Reuters in a Second Life interview.
“The Web took decades. This will likely take half that time.”
Irving Wladawsky-Berger, Vice President, Technical Strategy and Innovation, IBM Corporation wrote about IBM’s efforts in virtual space in his blog with:
In his blog article, Irving Wladawsky-Berger writes,
“About two years ago, a study conducted by the IBM Academy of Technology concluded that technologies and capabilities from the gaming world would have a very strong impact on all aspects of IT, and made a number of recommendations for follow-on activities, which we have proceeded to implement.”
Irving goes into great detail in his blog about how IBM is entering virtual space, and what they are finding out about doing business in virtual space. It’s well worth the read!
The one thing that has always defined IBM is that they are pretty good at being the middleman, the broker between disparate systems. If you are an IT Director, and you have a mix of hardware and software systems, IBM can come in and help you to get it all working and talking together. There’s a very revealing quote in the latest Reuters article on 3D virtual worlds, and I truly think this exposes the (virtual) space where IBM wants to dominate:
“A spokesman for IBM said its goals go far beyond Second Life, although it currently has its largest virtual world presence there, and that the company eventually wants to see all multiverses integrated into a seamless whole.”
That seems to be the core strategy with IBM and v-business, to be the glue for all of the virtual worlds that may emerge. We will never have a single all encompassing virtual world controlled by a single corporation, it’s just not going to happen, and it’s never happened in the past with any other technology. Do you think that maybe a few IBM employees have a copy of Neal Stephenson’s Snow Crash on their office bookshelves. Can you say “Metaverse”? Hardware is dead; look at the sell off of IBM’s flagship ThinkPad division to China. This is the future direction for IBM, and an extension of what they already do very well.
Irving closes out his blog entry with this observation:
“So, here we are in 2006, once more facing a set of fledgling technologies and capabilities — massively multiplayer online games and virtual worlds – that are already being used by many millions out there. Once more we have the very strong feeling that this will have a huge impact on business, society and our personal lives, although none of us can quite predict what that impact will be. It will be fascinating to see where this ride takes us in the future.”
Credit where credit is due: Parts of this post were taken from a fellow WordPress blogger here: http://pacificrimx.wordpress.com/2006/11/11/ibm-cool/
One of my deeply held beliefs regarding Customer Experience and Loyalty is that if you act as an advocate for your customers, they will reward you, not only with their business, but by advocating for you to their network of friends and family. There are many ways to be an advocate for your customers (and potential customers). One of them is to find ways to keep them from becoming overwhelmed with choice.
American society has become all about choice and most of us believe that all this choice is good. After all, it seems reasonable that we live better lives than we did 20 or 50 years ago, when the American economy was less advanced. Thanks to the ever-increasing pace of business, enabled by PCs and the internet; along with changes in business models, social values & government policies, choices now dominate the activity of our every day lives. We should get satisfaction from all of this choice, but the fact is, it is making us unhappy. It’s what the folks at Blackfriars Communications call “The Tyranny of Too Much“.
Think about how it feels when you open a restaurant menu and see dozens or even hundreds of items from which to choose. Almost makes you lose your appetite, doesn’t it? There’s a reason why all of the big fast-food chains now feature a handful of combo meals on their menu—they’re more profitable for them, to be sure, but they also make their customers’ lives just a little bit simpler.
This approach has been a part of Costco’s success for years. They have a small but high quality selection of just about everything. Their buyers do the work of selection a handful of high quality items across several pricepoints so I don’t have to decide between 18 different toasters (for example).
According to a story at BusinessWeekOnline, WalMart(WMT), which has not historically been known as a great customer advocate beyond offering low prices, is currently running a radio commercial in which boasts about how small its selection of HDTVs is. The spot wasn’t apologizing for Wal-Mart’s lack of selection, nor was it saying the fact that Wal-Mart carried fewer options than the competition didn’t matter. The commercial actually touted the fact that Wal-Mart had improved the HDTV buying process by limiting its selection to only the most popular models. That perked the author’s attention:
“I have been pondering the purchase of an HDTV for some time now, but dreading the long hours of research I was going to have to put into the process. I’ve read a few articles that explain the differences between plasma screens and LCDs, between $3,000 starter models and $10,000 big dogs. And I’m more confused than ever.”
“What Wal-Mart did was counterintuitive, but like AOL’s strategy during the early days of the Internet, it’s right on the mark. Conventional wisdom suggests that having more HDTV options under one roof is better for consumers. After all, if a retailer carries all of the options, it’s more likely to be able to meet the needs of every customer who walks through the door.”
“What Wal-Mart has recognized, however, is that most people’s purchasing needs aren’t merely tied to product features. Early adopters aside, most people don’t need or want to not spend hour after hour sorting through product reviews and comparison charts to find out which model is best. Most need to know that when they plunk down two, three, or four thousand dollars (or more), they’re going to be happy with their purchase. And they need to know that in two years they won’t be stuck with obsolete technology. (Betamax, anyone?) If they can go to Wal-Mart and choose from a handful models that will do the job just fine for the average person, they will be happier than if they are required to sort through 40 or 50 models at Best Buy (BBY) or Circuit City (CC).”
Wow, that’s powerful stuff and I think they may be on to something. More isn’t always better. Too many choices are often too confusing, and too much selection can become a burden, not a benefit. Whatever industry you’re in, if you can avoid the Tyranny of Too Much, you are acting as an advocate for your customer. That will drive loyalty, and simplify your own life as well.
Last year, I had the opportunity to work on business strategy development for a major retailer. We leveraged the work of innovation guru, Gary Hamel, and his company, Strategos, to complete the process. One of Hamel’s prescriptions is to challenge your orthodoxies; the things you believe to be true about your industry or business. In doing so, you can begin to see new opportunities.
I am a big fan of David Armano’s blog, Logic+Emotion and this week he posted a link to a fantastic video example of the power of this concept. It runs about two minutes. Be sure to stay with it until the end. The twist is well worth the wait. As you watch, think about your own orthodoxies. What opportunities are you not seeing because of them?
To give credit where credit is due, David first saw this on Drew McLellan’s blog, DrewsMarketingMinute.com.
Disruption Consultant Michael Urlocker has a thought provoking post on his blog that suggests that Microsoft and the entire PC industry may be reaching a point where it’s complexity and functionality has evolved beyond where they have surpassed the needs of most users. He proposes this possibility through the lense of the newspaper business, which despite successes using new designs in the 1980’s (USAToday), have been unable to stop a steady downturn in readership over the last few years.
When a proven management method fails, it may be a signal that the market is over-shot. Typically in such cases, suppliers continue to innovate and improve on things that no longer matter to customers.
Clearly this is occuring in newspapers and we may draw a similar conclusion, tentatively, about PC operating systems, hardware upgrades and new software applications. Just as the periodic newspaper redesign of the 1980s paid off, operating system upgrades created the market boom for companies like Microsoft, Dell, HP etc.
This raises a question: Is that boom over?
Overshooting customer needs is a core element of disruptive innovation because an overshot customer base will include a segment that will likely accept a so-called inferior product if it meets some other important needs
Read the whole post here.
Samsung Electronics presented their new three-way foldable combination of phone, personal computer and music player tailored for an emerging wireless broadband technology the company is pushing as a global standard.
The new device was unveiled at a Samsung-sponsored industry conference on Mobile Wi-Max – a new technology delivering faster remote broadband connections.
Its called MITs, which stands for Mobile Intelligent Terminal by Samsung. It weights about a pound and contains a fold out keyboard, 5-inch screen, 30GB hard drive, and Windows software.
It is scheduled to be released in South Korea in early 2007 with Intel, Sprint Nextel and Motorola all looking to commercialize it in the States soon thereafter.