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  • Welcome to the World of Instant Success

    August 18th, 2010

    It’s fair to say that the market doesn’t give a new product much time before it’s declared a success or failure. Consider the Power Macintosh G4 Cube, for example, which was released in 2000. Reminiscent of the fabled NeXTcube, the Mac version didn’t survive a year until Steve Jobs — reluctantly I suspect — pulled the plug due to extremely low sales.

    In retrospect, the Mac mini has probably vindicated the concept to some extent, but that doesn’t mean the Cube was any less a failure.

    In the world of entertainment, a new movie usually has the opening weekend to demonstrate its box official potential. Unless it clicks, or shows promise, theaters will drop it like a hot potato, and the producers will redirect their promotional efforts elsewhere.

    A TV show may be cancelled within just a few weeks, although the networks are showing more a tendency nowadays to give a struggling program a little more time to gain traction, including switching days and time slots. It’s not as if it’s cheap to develop a replacement.

    In the fast-moving consumer electronics universe, the window of opportunity is seldom more than a few weeks. Microsoft suffered the most embarrassing defeat recently when its highly promoted Kin smartphone was summarily dispatched in short order as the result of pathetic sales.

    This week there are reports that RIM, manufacturers of the BlackBerry smartphone, is suffering from a poor rollout of the BlackBerry Torch, their ultimate attempt to compete with the iPhone and Android OS devices. Despite loads of money spent on promoting the new gadget, sales over the first weekend were estimated at 150,000, a mere fraction of what Apple was able to move during the first weekend of iPhone 4 sales, and inferior even to the original iPhone rollout.

    The price has already been cut in half, from $199 to $99, indicating a potential fire sale to move product.

    That doesn’t necessarily mean RIM is in deep trouble. Unlike Apple, which basically has two versions of the iPhone 4, and a single iPhone 3GS model available, there are loads of choices for people who want a BlackBerry, available from all the major U.S. carriers. So no single model can kill the brand, but the Torch was the one that supposedly melded a workable touchscreen with the traditional BlackBerry physical keyboard, and sported a supposedly modern operating system.

    What happened?

    Well, it seems that most of the attention — and marketing efforts — are concentrated on the iPhone and Android smartphones these days. In that environment, it’s hard to take anything else seriously.

    No, it doesn’t mean that the BlackBerry is destined to fail, nor does it mean that Android will trounce Apple. The smartphone business is far too fragmented for any one model, or manufacturer, to own the business. Unlike what some supposed media or industry analysts will have you believe, this isn’t a replay of the Mac versus Windows platform wars.

    Apple can succeed, and the various makers of Android OS devices, led by HTC and Motorola, can also succeed without destroying one another. At the same time, no individual contender will be afforded much opportunity to shine before the public moves on to something else.

    The major exception is Apple, since, until now, iPhone upgrades have largely been an annual affair. That may, however, change, assuming that the recent rumors of a January 2011 of an iPhone for Verizon Wireless are true. That model, however, is expected to be little more than the present iPhone 4 with support for a CDMA network.

    Those claims that the iPhone is in deep trouble because Android OS devices have larger total sales, at least in the U.S., are nothing short of absurd. Remember that the iPhone is available from a single carrier. There are many Android OS phones from all the carriers, and, in particular, Verizon is dumping large sums of money — and product for that matter — to boost their share of the smartphone market.

    The sales skew may even change drastically if and when there’s a Verizon version of the iPhone. With reports that roughly a third of existing iPhone customers at AT&T might jump ship when the opportunity presents itself and move to Verizon, along with intense interest of existing Verizon customers, it’s a sure thing that Apple stands to sell a lot more product with two U.S. carriers. Imagine if the joy spreads to the remaining major cell phone providers, Sprint and T-Mobile.

    In particular, Verizon, newly flush with iPhone profits, may no longer see the need to spend so much time touting Android OS gear. The sales picture will change drastically.

    But even if the Android OS continues to get a higher share than the iPhone, Apple can still demonstrate serious success with 50% to 100% year-over-year sales increases. You can’t argue with raw numbers, and if they remain compelling, it won’t matter whether Apple is number one in the smartphone market or number five.

    As far as RIM is concerned, if the BlackBerry Torch is indeed a failure, they will have to work hard to find a replacement product. The market won’t tolerate failure.



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