I thought I’d give this one a dry title - it’s really about the iPhone again. But I thought people would be pretty tired of iPhone posts by now.
So, for those of you who don’t follow the iPhone (both of you perhaps), Apple released the iPhone SDK. But they did something else that will end up driving many more iPhone sales than allowing you to download games - they added ENTERPRISE support. Yes, ENTERPRISE. It’s just that important. (I’m sure you know by now that your products are nothing if they’re not ready for the ENTERPRISE.)
You can now connect your iPhone directly to Exchange and get all your corporate email in one sleek, beautiful Apple-branded package. All the cool of Apple and all the IT-approvability of the Blackberry. And how did Apple do it? Did they hire dozens of developers to copy RIM’s BES gateway technology? Nope. They licensed ActiveSync. The trouble is that, as anyone who has ever owned a Windows Mobile device can attest, ActiveSync stinks. It just doesn’t work reliably. But you know what - no one cares. In one fell swoop Apple just did more damage to RIM then a dozen NTP lawsuits.
When you’re looking to take your product to the next level and add in the “killer” functionality that every single prospect asks for during demos you need to look long and hard at how you can buy or license that technology instead of building it yourself. RIM had nothing to license when the Blackberry first came out - ActiveSync was even worse back then anyway - so they had to do it themselves. But Apple went to the source and did in just a few months what RIM has spent millions of dollars building. So Apple knows what to do. What technology have you licensed for your product lately?
I’m sure this happens all the time on the web, but I just ran across 2 - likely related - blogs on Blogspot that have lifted my iPhone vs. IPod Touch article verbatim.
I wasn’t fortunate enough to be in Seattle or New York today, the initial two cities selected for the launch of the iTunes / Starbucks wifi store. The news is that the user experience is smooth, even if there were a few initial glitches along with one usability complaint reported by this reviewer. Frankly I am not surprised that there were a few glitches with this one. The baristas pull a mean espresso, but I doubt the T-Mobile gear has on-site expertise.
I think this is a brilliant move for both Starbucks and Apple. Starbucks has been aspiring for a few years now to become a third place, somewhere we can all just go and hang out between home and work. It has wifi, unlimited use of its couches, comfy chairs, working desks, and a supply of coffee and sweets limited only by the balance on one of your plastic cards.
And of course Starbucks is monetizing this third place. Now it is looking to expand its access to a market segment totally distinct from coffee and sweets: music distribution. But why create another HMV or Virgin Record store? Instead, it is serving up iTunes Store for free through its T-Mobile wifi connections. I need to dig for some info on the relative monetary value projected for music vs. coffee. Please send me a note if you have any info or links to such info.
I still get noticed when I pull out my iPhone and take a picture, check my mail, or just call someone. But today I was wishing that Apple and Starbucks had chosen the San Francisco bay area to launch its partnership, and I would have been there to write up the experience. It wasn’t to be.
Instead, I was in Monterey today, and went into Starbucks to tease the baristas for not being among the launch stores. As they were making my espresso macchiato, I discovered yet another co-marketing action: The Digital Release!
Here’s the concept: Starbucks promotes a shiny card looking like a CD cover, which is actually a coupon you can purchase at Starbucks to allow you to go home (or to your laptop in the store) and redeem the coupon for an album at the iTunes Store. Here are a couple of pictures of the cards I bought.
Not having my laptop with me, and not being able to use the iTunes store on my iPhone, I waited until I got back to Belmont, and typed in the code for KT Tungstall, Drastic Fantastic. I’m listening to Hopeless now as I type.
Will this method of distribution work? I’m skeptical. What is the benefit for the buyer of these shiny little cards? I had to buy one. OK, I bought two. It’s a business expense for me to check out the workflow, test out the concept, and write about it. Not sure my partners would agree, but after all I only spent $25.
But here’s the thing. I don’t get anything extra by buying this card versus just buying the Deluxe version of the same album on iTunes. So really the only thing this little card does is to serve as an advertisement for this particular album, and perhaps an ad for purchasing digital music. But if I want the next album they advertise, I likely won’t buy the card. I could lose the card before I got to my laptop.
Maybe I am missing the point? Maybe Starbucks gets a larger cut for the shiny cards because it can say that it legitimately influenced the purchase. Or perhaps it allows Starbucks to advertise more “Starbucky music” with less cost of materials. But these all seem like benefits to the seller, not to the buyer.
I don’t think there is much future for the shiny little cards. I will of course keep mine in a safe place to show my kids years from now, alongside the 8 tracks, cassette tapes, and vinyl records ,and even CDs and DVDs that they will laugh at in a few years. Perhaps I have in my possession one of the rarest forms of music distribution ever! Seriously, I don’t think it will last. But I’ll be watching, and I hope you’ll let me know if you disagree.
But iTunes Store over wifi? That will be a huge win. If only I could get myself to a city where they offer it this month.
A few months ago, to much fanfare and (possibly well deserved) hype, Apple released the iPhone.
People oohed and ahhed.
And a small number (1, 2, 3) OK…lots of people bought them.
Then Apple did something really interesting. Within a few months of the iPhone release, they dropped the price of the iPhone, by 33% (from $599 -> $399), and almost simultaneously released the iPod Touch.
The price drop really annoyed existing iPhone owners, and the new iPod Touch once again made people ooh and ahh.
The iPod Touch, is essentially an iPhone, without the phone, camera and a number of other features. The Touch is only 15 grams (1/2 ounce) lighter and 3 mm thinner than an iPhone. They have the same sized screen and function almost identically.
Why is this at all interesting?
First, people paid a premium price for the iPhone even though it was clearly quite expensive, AND it had a poor cell phone carrier plan. With the price drop, a customer revolt ensued, but Apple seems to have handled it well with a $100 Apple credit for any of the original iPhone purchasers.
Second, that the difference in price between an 8GB iPhone and an 8GB iPod Touch is only $100. $399 for the phone. $299 for the Touch. Makes you wonder. Is the phone portion such a commodity or are Apple’s margins really good on the Touch?
Third, and most important IMHO, Apple now has two different products that fundamentally share the same technology. And while this can be viewed as line extension (iPod, iPod nano, iPod shuffle etc.), in many ways this is really a big step forward for the iPod. It now becomes a mobile, wireless device, and not simply a portable music/video player. And the rumours are that the multi-touch pointing technology is next headed for the laptop.
So from a Product Management perspective, what can be learned?
Always keep innovating.The iPhone may be as great as all the hype, maybe not, but it truly is different in many ways when compared to other high end mobile phones. But note that in all the hype about the iPhone, was there any mention that this was Apple’s second kick at the telecom can? Anyone remember the ROKR? OK, it was a Motorola phone, but Apple was certainly involved in it’s development. Can anyone say boooring?
Communicate those innovations in intelligent and articulate ways to your market/customers in advance of the launch. By giving people 3 months notice of the launch of the iPhone, Apple ensured that word would spread and demand would grow. Many software companies wait until the ship date to communicate to the market and customers. This is a guaranteed way to delay revenue.
Leverage your technology investments and deliver multiple solutions to different market segments.It’s always great to create a completely new product with new technology and new functionality. But, what’s even better is to get multiple returns on a single technology investment by being able to repackage, reposition, and resell different slices of the same technology to address problems for different users and use cases. If you are in the BUSINESS of technology, and not simply the technology business, this is something you really need to focus on.
In a blog posting, Steve Johnson of Pragmatic Marketing asks “Why Demo at Trade Shows?” Good question.
Abridged version
Why demo?
Steve writes:
Do we think that the product will sell itself? … Instead I fear that we’re showing too much too soon in the sales cycle and turning off our potential buyers.
I have to ask the question: Steve, what evidence is there that trade show demos turn OFF potential buyers?
Steve, you bought an iPhone right? Steve Jobs demo’d it at an Apple Conference a few months before they went on sale. What was the sales cycle that ensued that convinced you (and 100,000+ others) to get it as soon as it was available? I’m pretty sure it sold itself.
Full version
Why demo?
Why even attend trade shows at all for that matter? All those airline tickets and hotel rooms, not to mention trade show booth rentals, cost serious $$$. And then there are all those people who just come to your booth to get the nifty pen or other cool swag you have on hand.
What a bother!
But let’s get back to to the original post. Steve writes:
Back in its heyday, Comdex estimated that they threw away two tons of product literature every day. If they don’t keep the collateral, will they remember the demo?
Steve, a bit of logical fallacy here don’t you think? Sure, people throw away literature at trade shows. That doesn’t mean they throw away ALL of their literature, and it doesn’t at all imply they suffer from memory loss.
At it’s peak, Comdex attracted about 200,000 attendees. A bit of math (the numbers work out quite conveniently), and we see that (2 tons) 4000 lbs / 200,000 people = .02 lbs per person of wasted literature each day.
That’s about 9 grams per person. Not really a lot when you think about it. So, if people aren’t actually throwing that much away, maybe they are remembering the demo?
Later Steve writes:
Do we think that the product will sell itself? … Instead I fear that we’re showing too much too soon in the sales cycle and turning off our potential buyers.
I have to ask the question: Steve, what evidence is there that trade show demos turn OFF potential buyers?
Steve, you bought an iPhone right? Steve Jobs demo’d it at an Apple Conference a few months before they went on sale. What was the sales cycle that ensued that convinced you to buy it? I’m pretty sure it sold itself. Or at the very least, the Steve Jobs reality distortion field helped convince you to buy it.
BTW, if the product can’t sell itself, whose fault is that? Sure not all technology products are right for trade show demos, but that doesn’t mean none of them are. I had a wonderful experience a while back demoing a software product at a show. Could have sold lots of licenses on the floor if it were possible.
Many people attend technology trade shows explicitly for the opportunity to see a live demo of a product and speak directly to savvy personnel from the company that makes the product.
Ever watch a late night infomercial? They are nothing but extended demos of the products — kitchen devices, exercise machines, you name it. And boy do they sell product. One of most popular products sold by infomercial is the Showtime Rotisserie, pictured here. It is claimed that over 7 million units have been sold, generating revenues of over $1,000,000,000 dollars.
Steve continues:
Do the sales people demand it? Demo-selling is the laziest kind of selling. It says, “I don’t want to know you or learn your business. I just want to get you to buy as quickly as possible.”
I have to respectfully disagree here. First of all, as mentioned earlier, many people go to shows with the expressed intent to see the product and get a demo. Demo-selling is only lazy IF the vendor explicitly doesn’t want to listen to the prospect. In fact, if that is the case, it is not only lazy, but incredibly foolish as well. And yes, some companies do behave that way, but many companies don’t.
The great thing about trade shows is that in exchange for a short (not necessarily canned) demo of the product, I get to have face to face conversations with potential buyers. What’s my response to someone who comes to the booth and says:
“Hi, can I get a demo of your product?“
I say,
“Yes, absolutely. But first can you tell me a bit about yourself and what you are looking to do with a product like ours?“
If the person bites and responds to the question, then I have them. I can ask them a few more qualifying questions and if they fit the profile I’m looking for, I can get into a demo with them and continue the conversation, asking questions, probing for information etc. If they don’t fit the profile I can still give them the demo I promised, but I can decide how deep or not to take it. In the end, I get what I want, and they get want they want. Seems reasonable to me.
Later Steve writes:
Why do we demo at trade shows? Because everyone is doing it? My mother used to ask, “If everyone jumped off a cliff, would you?”
My mother used to say the same thing, but never in the context of tradeshows.
Just because everyone is doing it, it doesn’t mean it’s stupid.
I have a friend who was vacationing in Thailand a couple of years ago. He was sitting down to have breakfast with his wife and son. As they were eating breakfast on the restaurant patio, they started noticing people running up the road. As they watched, the number of people running up the road continued to increase. Many of the people were yelling in Thai as they ran by. My friend didn’t understand Thai. But, he figured that if so many people were running up the road, he and his family should do it as well. They abandoned their breakfast and ran along with the throngs of other people, not knowing why everyone was running.
The date was December 26, 2004. The people were all running up the road away from the beach and the massive tsunami that was bearing down on them. We don’t always have all the data to make well reasoned decisions on what to do, but many times, by observing crowds, we may get insight that delivers significant benefit.
There certainly are ways to have bad demos and to promote and sell products poorly. Some companies do it far too regularly, by focusing on their own features and functionality and not understanding the customer’s frame of reference. But that has nothing to do with a trade show. Alan blogged about this in one of his posts.
Steve concludes:
At your next event, try just asking people who come by the booth a few simple qualifying questions about their problem and its urgency to them. If they answer in the affirmative, scan their badge or take their card and invite them to enjoy the show. Meanwhile send a set of materials to them through the mail or better yet, have a sales person contact them the week after the show. Nobody retains information from a trade show–everyone is yelling to be heard. Perhaps you could be a little quieter and much more effective. Let’s use the demo where it belongs, much later in the sales cycle.
Steve, that’s an interesting idea. We have a big product launch coming up in September. We’re announcing the product at a big trade show at the Moscone Center in San Francisco. Now, I’m wondering, what would be the reaction of someone who took time off work, came down to the Moscone Center (maybe they are local, maybe they flew in for the show), and came to our booth and after a short interchange, I scanned their badge and sent them off to the next company of interest.
Hate to say it, but I doubt the impression would be a good one. What ROI are they getting from me, having spent time and money to come to my booth? A handshake, a short conversation and a “we’ll have a sales rep contact you next week“?
I’ll think about your idea. But to be honest, when I have the opportunity to have a high touch, high value direct conversation with a good prospect, I’m going to take it.
I have a perfectly good Blackberry 8200 series, but I’ve been waiting for a chance to hit the Apple store to check out the iPhone. If you’ve been reading our blog for a while, you know that we’ve been paying attention to this product launch.
Finally, a trip to Boston, over a month after the release, and here I am. In fact I’m writing to you from the Apple store in Cambridge right now. It just so happens that today is a big day for Apple; they are right now announcing a new iMac design, upgrades to iWeb, a rewrite of iMovie, upgrades to iPhoto, and several other announcements. The announcement is still under way, so the staff here is still sworn to secrecy, but I’ve been getting SMS updates on my iPhone from macrumors since the announcement stared about 75 minutes ago.
Yes, I bought an iPhone. I can only say this: the thing is truly sweet, a masterpiece of design in every way. Some people have made sensible comments, such as “It’s only a phone”, and I did actually struggle with why I had the compulsion to buy it. I decided this morning on my way over to the store that I would try the phone out and just see whether I *had* to have one. It didn’t take me long. When I picked it up, saw the slick unlock button, my reserve cracked immediately.
Now after a couple of hours of playing with it (I admit that I have been playing), I realize that while this is *just* a phone, it also somehow expresses something about my tastes in product design, ease of use, and just plain beauty.
Am I being overly romantic? Tell us what you think. You can leave your comment here, or send me an iChat … awarmstrong@mac.com
In a recent conference call, RIM co-founder Jim Balsillie gave his two cents on how much the iPhone is keeping him awake at night:
“I think there’s so many dimensions to the market that we’re in, that people tend to define it too specifically… I’m not really into the ‘my input mechanism is funkier than your input mechanism’. It’s really about the user experience for us. I really don’t pay attention to all these different dynamics, because it doesn’t help me with my channels or my customers any.” via Blackberrycool
That’s right. It’s not about competitors, It’s about customers. And now that Jim has my approval on his product development process, I’m sure he’ll sleep even easier.
It’s a phone. It’s really just a phone. But it’s also internet, chat, camera. All of which exist. But this, this is the iPhone.
Here is a site that helps you stake out places to sleep, eat, and, yes, go to the bathroom, in the vicinity of the iPhone release sites. Read the rest of this entry »
A long time ago, at a trade show far far away :-), just as I finished giving a demo of our new software product to a pair of attendees, one of the people looked at the other, pointed at the monitor and said “I gotta get me some of that!” I remember that moment well. Read the rest of this entry »
2 Comments | 
Apple, Blackberry, Ethan, Innovation, Partnerships, iPhone | 
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Posted by Ethan
The 
Not sure my partners would agree, but after all I only spent $25.
A few months ago, to much fanfare and (possibly well deserved) hype, Apple released the 
The price drop really annoyed existing iPhone owners, and the new iPod Touch once again made people ooh and ahh.
I have a perfectly good Blackberry 8200 series, but I’ve been waiting for a chance to hit the Apple store to check out the iPhone. If you’ve been reading our blog for a while, you know that we’ve been 
In a recent conference call, RIM co-founder Jim Balsillie gave his two cents on how much the iPhone is keeping him awake at night:
