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Tuesday, 24 May 2011

Why has Dell failed where Apple succeeded?

I came across a fairly interesting article in the Wall Street Journal today which was discussing the repeated attempts made by Dell to become a stronger consumer, gadget-centric brand and why they've consistently not succeeded here.

The story said that Michael Dell's attempts to see Dell move into a much more profitable segment of must-have-now-pull product haven't worked with Dell killing off products like their slim-line Adamo laptop series, their music players and online music service.  Dell has been trying desperately to succeed in smartphones and tablets but here also they've struggled to make the breakthroughs they've expected.

So what exactly is the problem and why is it Dell hasn't been able to crack it and Apple has?

Image courtesy: thetechherald.com
Fundamentally, what it takes is one product to make it happen.  With Apple, they saw it clearly with the iPod and they were successful to leverage on this by coming out with a series of successful additions to the iPod family before moving into iPhones and iPads.  Motorola has done this a few times whether it be with the StarTac mobile phones in the 1990's or the Razr mobile phones midway through the last decade.  However, Motorola has struggled to keep themselves consistent and has continually seen themselves re-emerge after major slumps.  Dell has been able to do this on the laptop business but beyond that in the consumer space has found it a struggle.  Their one-hit wonder is yet to happen to but whether it ever happens is also based on other factors.

Firstly, the Wall Street Journal story mentions that Dell has been making acquisitions, whether it be in the form of talent or companies that could fit this strategy.

Secondly, Dell's R&D investments have been limited in the consumer space as they've been largely dependent till now on innovations brought on by partners like Microsoft and Intel.  With the WINTEL alliance falling behind in the age of portable media players, navigation systems, smartphones and tablets, Dell has found this strategy of essentially out-sourcing R&D has come back to bite them.

When directly comparing Dell and Apple, Dell spent 1.1% of their revenue or USD 2.6B in R&D over the last four years, whereas Apple spent 3% of their revenue or USD 5B in the same period according to the Wall Street Journal report.  Dell also cut its marketing expenditure by nearly 10% in the last fiscal year whereas Apple has been notorious for getting a lot of free PR and word of mouth coverage which really can't be monetized.
Despite Cisco's attempts to enter into the consumer
space with Flip cameras, they ultimately bit the
bullet and decided to exit this business earlier this year,

With so many hats to wear, Dell may have to look at which battle is worth more for them.  Do they want to fight against Apple in the consumer gadget space for example or battle it out with HP in the data storage, networking, server and PC business?  Dell has a huge enterprise business which has been extremely successful for them and a relatively successful line of consumer laptops, so should they be satisfied with this?  As we've seen recently with Cisco, diversifying into consumer products is not everyone's cup of tea as they suddenly exited the portable camcorder business which they entered into a few years ago when they acquired Flip.

I'm just glad I'm not in Michael Dell's shoes as he decides how to move forward.  Committing to a consumer strategy means committing a lot more than just a brand name and money, which Dell I'm sure is more than aware of.  Over to you Michael and let's hope you don't disappoint us...

To read the full story in the Wall Street Journal, please click here.

Posted By: Ashish Panjabi, Chief Operating Officer, Jacky's Electronics

Monday, 23 May 2011

For US$ 7.5B, you could buy Apple in 2004

I came across a headline earlier this morning that just made me go WOW!  Basically, in 2004, when Apple had already had their iPod out for three years, Apple was worth US$ 7.5 Billion.  Now consider the fact that Microsoft acquired Skype earlier this month for US$ 8.5 Billion, you realize just how big an acquisition Skype is for Microsoft (click here to read more about these valuations).

Since 2004, a lot has changed.  Apple has gone and taken top spot as the most valuable IT company in the world and a lot of us can sit and speculate, what if theories about Apple and Microsoft.
Image courtesy: nowpublic.net

By comparison, in 2004, Microsoft had revenues of US$ 8.16 Billion, Apple had revenues of US$ 276 Million and Amazon had revenues of US$ 588 Million.

In 2011, Microsoft had revenues of US$ 21.8 Billion, Apple is a whopping US$ 22.9 Billion and Amazon grew to US$ 1.2 Billion (further details can be seen by clicking here).

With Microsoft laying out such a big chunk of change for Skype, you have to realize that they have some serious plans for Skype, whether it be part of their mobile strategy (Windows Phone 7,  Nokia, BlackBerry tie-ups), gaming strategy (Xbox Live), search engine strategy (Bing), enterprise (Outlook, Exchange, MS Office) or it's core operating system strategy (Windows for notebooks & desktops).

What is left to be seen is whether Microsoft has made the right decision acquiring Skype for that amount of money and whether Microsoft can at least for those of us in the UAE, get us access to Skype legally.

Posted By: Ashish Panjabi, Chief Operating Officer, Jacky's Electronics

Tuesday, 10 May 2011

PING! BlackBerry Messenger Calling...

After listening to two days of presentations at BlackBerry World last week, one message resonated clearly as being at the core of RIM’s strategy: BlackBerry Messenger (BBM).  BBM was being positioned as the major USP for RIM devices and that it is more than just an instant-messaging platform.  BBM for example could be a way to send credit to your son or daughter as one of the presenters said during BlackBerry World so it could turn out to be a source of mobile commerce moving forward.  To do this, RIM is working with third-party developers to see that they integrate BBM into their products.  A presentation made during BlackBerry World also showed how Foursquare notifications can also be sent via BBM in the update to the App that's bound to hit BlackBerry smartphones shortly.
However, you still have to wonder is BMM enough of a differentiator?  When asked about this, some RIM employee’s retorted that there is no real competitor for them as the other platforms are all simply instant-messaging platforms while they are so much more.  The stats for BBM are impressive.  As per the local office for RIM, in Dubai confirmed that there are 43 million users of BBM worldwide.  That's 43 million people who have some degree of loyalty to the closed network that exists on BlackBerry and who will always think twice before migrating from platform to the other because they worry about how they will manage without BBM.  That's not to say there haven't been people who've moved from BlackBerry's to an iPhone or Android device, but it's always been something that most of them have thought about many times I'm sure being taking the plunge.

On any other platform, whether it be Apple's iOS, Nokia's Symbian or Google's Android, you could still switch from one platform to the other knowing that the only adjustment you'd have to make is getting used to a slightly different user interface.  With BlackBerry's, it means abandoning BBM and RIM has made sure BlackBerry users have even less reason to switch by looking at this third-party integration into their BBM platform.
Having said all of this though, it still begs the question, is this enough? This didn’t convince many of us in the room at BlackBerry World and left us to wonder when will RIM wake up and smell the coffee?  It could be a case that until we don't see the benefits of these third party apps integrated with BBM, we may not understand the benefits fully but there seems to be a clear over-reliance on BBM.  With other messaging platforms like WhatsApp that are cross-platform, many of the features that we’ve seen in BBM are starting to appear in it like Group Chat or sharing pictures.  There is still some way left for WhatsApp and other messaging platforms to go to replicate BBM entirely but surely it has to be a question of time until this can remain a distinguishing factor for RIM.  If an App developer like Foursquare can integrate their App to work with BBM, what is there to stop them for example in developing an App that also works with WhatsApp?

We've seen the same thing with Apps that were initially designed in the social media age that we now live in.  Many plug-ins that you could download allowed you to share your experiences online via e-mail, but then grew to include sharing them on other platforms like digg or del.icio.us before they eventually moved onto sharing them via Facebook and Twitter.  
When BlackBerry World 2012 rolls around, it’ll be interesting to see what RIM has to say and if BBM has done enough to keep RIM ahead of the game.  One thing is for sure, the mobile industry will probably look very different to the industry as we see it today with all the rapid technological innovations we're seeing.  RIM at the moment looks like they're not slowing down and neither is any other mobile brand but we know, somewhere down the line, someone has to give way and at the moment, it doesn't seem entirely clear, who will or will not succeed in the long term.

Coming up on this blog, we'll do a review of the BlackBerry PlayBook but we'll give the BlackBerry news a break for a couple of days before we proceed with that story.  Thanks for reading along if you've kept up with out BlackBerry World wrap-up over the last three days.  I know the non-BlackBerry fans will be breathing a sigh of relief as this is all we've been talking about for the last one week but for an event as large as this, we had to make sure it got the coverage it deserved.

Posted By: Ashish Panjabi, Chief Operating Officer, Jacky's Electronics

Monday, 9 May 2011

BlackBerry World - Just “Bing” Me

We’ve all heard phrase “PING me” on BlackBerry Messenger (BBM), but RIM, the manufacturer of BlackBerry devices added a new phrase into our BBM vocabulary and that is just “BING me."
Could this be the new BlackBerry catch-phrase?

With the announcement made at BlackBerry World that Microsoft would be collaborating with RIM going forward, means that apart from having Bing as the default search engine in all BlackBerry devices, Microsoft would be working with RIM at the core operating system level.  Bing is not only a search engine as Steve Ballmer, Microsoft’s CEO, said at BlackBerry World but is a tool that helps integrate everything we do today.  As Ballmer and others in the search engine business have been quite clear in saying, search engines do much more than answer questions.  They're being designed as instant answer tools whether it's asked given an input or not.  Inputs if they exist, could be in the form of showing the search engine a picture, QR code, barcode, locational data or a voice input.  Instant answers could be in the form of questions to queries you have as we know search engines to function today, but also to provide tips, advice, news, bargains and other relevant information based on how we're using our devices (for those of you who though Apple's locationgate was bad, this is only the tip of the iceberg)
What does this mean for the mobile industry in general and what does this sound like?  For starters, a lot of what Microsoft and RIM said last week is similar to something I heard a few weeks ago from a senior Google executive who was talking about Google’s mobile strategy.  This is probably why I wasn't as excited when I first heard about Microsoft's Bing strategy.  Had Google not demonstrated this, I would've been found this somewhat fascinating.  Is it a case of innovating or being a me-too competitor to Google?
Friends with benefits, Mike Lazaridis of RIM and
Microsoft's Steve Ballmer

One message Ballmer was clear to push through was that the cloud is going to be at the centre of everything that Microsoft does.  With cloud services being at the heart of everything, the idea is that you could move from device to device seamlessly.  This again sounds like Google’s language.
The Microsoft-RIM venture also helps put another chink the armour of Microsoft after tying up a deal with Nokia earlier this year where they said Nokia would be running on Windows Phone 7 devices in the future.  One thing Ballmer made sure to clarify that Windows Phone 7 won’t be a part of this partnership, especially considering RIM announced two new operating systems at the event (the new BlackBerry OS 7.0 which is going to be on the new generation BlackBerry Bold’s and QNX operating system on the PlayBook tablets).  However, future iterations could I suspect have a Microsoft feel to it.
So is Microsoft helping keeping sinking ships alive?  Has Microsoft leveraged their bets by banking beyond Windows Phone 7 and Nokia?  The R&D knowledge that exists within Microsoft, Nokia and RIM surely would have benefits for all three companies.  For example, RIM will be banking on Bing, Bing’s map service in turn is dependent on Navteq, which is in turn owned by Nokia.  In short, RIM has benefitted from the Nokia-Microsoft partnership, whether they intended for it to happen or not.  Does this sound like a menage-a-trois to anyone?
The reality of the situation is that the mobile industry is highly incestuous.  Each brand seems to benefit off the R&D of another brand because at the end of the day, many of these brands either have their components business to look after or use the contract manufacturer to eventually put together their kit.  The recent Apple suing Samsung episode is just an example of this, where Apple saw Samsung as a competitor who infringed on their design patents but at the same Apple is also highly dependent on Samsung to provide parts for the iPhone 4.

With BlackBerry devices being as popular as they are with corporate users, will working with Microsoft also mean that we could see mobile versions of Microsoft’s Office suite make their way onto BlackBerry AppWorld?  With Keynote, Pages and Numbers being amongst the most popular Apps on Apple’s App-store, this could certainly be a money making opportunity for both RIM and Microsoft.

Moving beyond the enterprise market though, Microsoft has also made forays into the consumer market with their gaming devices with the XBox.  With tablets and smartphones becoming an essential part of any gaming companies existence, could Microsoft be hoping their next lease of life in the gaming business comes from the tens of millions of BlackBerry subscribers out there?

Even though Microsoft never acquired Nokia, is Microsoft’s strategy to work with RIM on the high-end of the smartphone market and work with Nokia for the mass-market devices? After all, RIM’s announcement at the event is that amateur hour is over.  This partnership probably helps differentiate RIM from competitors in the market like Samsung, HTC or Motorola which don’t have their own operating system platform, however, there is still another fruit company called Apple which has their own hardware and software which RIM competes with that can't be forgotten.   

RIM also has kept their finger in many pies because as excited as they were with the Microsoft announcement, they also did mention that their flagship product, the PlayBook, would be compatible with Android apps, which means they've kept their gates open when it comes to possibly collaborating with Google, as and when it is convenient in the future.  

In short, in the space of three days, RIM showed us they've gone from being the isolated player in the mobile industry to now finding themselves in bed with Microsoft, Nokia and Google.  One thing is for sure, many of us left with more questions than answers once the hype was over.  Anyone have a crystal ball we can borrow to see just how this move forward, please share it with us if you do.

Posted By: Ashish Panjabi, Chief Operating Officer, Jacky's Electronics

Sunday, 8 May 2011

BlackBerry World - The Roller Coaster Ride

Having just returned from BlackBerry World in Orlando, there were a few surprises that got everyone talking at the event, whether it be Steve Ballmer’s surprise appearance on the stage, the announcement that Angry Birds would soon be coming to a BlackBerry device near you or the captivating keynotes by Dean Kamen and columnist-author Malcolm Gladwell.  To top it off, since this was the tenth anniversary of BlackBerry World, Mike Lazaridis announced proudly that everyone of the 6,000 in attendance at the event would be getting a free BlackBerry PlayBook tablet (including yours truly) and topped it off by throwing a party by booking out Universal Studio that night where Canadian musical act Dragonette and DJ Paul Oakenfold performed.
Over the next few days, we’ll be uploading some analysis of what I saw happening at BlackBerry World and what implications this could have for the company, whether it be positive or negative.  The roller-coasters at Universal Studios weren’t the only rides we took at BlackBerry World so there’ll be a lot to say so keep an eye out on this blog over the next few days.

Posted By: Ashish Panjabi, Chief Operating Officer, Jacky's Electronics

Tuesday, 3 May 2011

Keeping the BlackBerry Flag Flying High

In mid-April, I'd put out a post "Is it BlackBerry Bashing Season?" (click here to read the post), in which I'd said that Research in Motion (RIM), the manufacturer of BlackBerry devices, was probably getting a lot more stick from the press than it deserved.

It was therefore refreshing to see an extremely insightful blog post that was sent to us courtesy Mita Srinivasan (@mita56 on Twitter) which actually digs a little more in the guts of RIM's rise in the last eight years and what can be done about it.  The author does examine the rise of Android as an operating system software but also tracks how RIM grew their subscriber base over the same period with only their brand of handsets (whereas Android has various manufacturers to thank for their meteoric rise).

What was however more interesting is how the author actually studied past examples of what can literally kill off a brand.  He looks into whether RIM is heading down the path of Atari and Commodore or whether there is still juice left in the brand.

It's a long read, but I do suggest having a go at it if you've got the time.  Click here to read it.

P.S. I'm at BlackBerry World in Orlando this week so there should be more updates coming from here on BlackBerry.  Most of the senior team of RIM is here and there should be lots to talk about over the course of the next few days. Follow us on Twitter (@jackysuae to get more info as we post it).

Posted By: Ashish Panjabi, Chief Operating Officer, Jacky's Electronics