I just read some reviews of the RIM PlayBook (good summary at by InformationWeek) and I think there are lessons to be learned that go well beyond the tablet market. As an analyst, I see new companies all of time, so I offer 5 strategies technology companies need to consider when entering an emerging market:
Features Is the product at feature parity? RIM is getting grief for the lack of native e-mail, contacts and calendar. How long have they sold BlackBerries? Even if few people use the larger devices for these functions, how much would it really cost to include them just to get over the first item on the evaluation checklist. If you use the other products and you realize that you don’t meet feature parity, either make sure you have a good authentic story about why you don’t have that feature, that sounds more like thought leadership than an excuse. And BTW, feature parity isn’t the goal, it’s the entry ticket. The real feature that matters is the one that differentiates the product and makes it appeal to existing customers, or attracts new customers to the market. If you don’t have a differentiating, distinguishing feature, then again, don’t entry the market. Just not being the other company or other product isn’t enough unless people really don’t like the other guy.
Price If your product is heavy, slower, less-feature rich and more expensive, why did you bother to bring it to market? The only thing that will justify a higher price is better value. Strategically speaking, if your supply chain can’t deliver components that provide a margin target for price points already in market, then you made mistakes and you shouldn’t bring the product to market—and if you do, and you believe in the product, take the hit on margins and profits early and work the back end (supply chain and manufacturing costs) so you at least have the chance that consumers will pay attention to the product and not just its price tag.
Audience Know who you are making a device for. In the tablet world, Microsoft thinks that touting Windows 7 will attract business buyers. Apple thinks that creating something cool will get people to bring their personal devices to work and ultimately drive developers (and IT departments) to support it. Apple knows their audience very well. Microsoft has done well with the pen-based tablets in some fields like health care, because those device features resonated with that audience. Apple went after the consumer with magic as the mantra, and for tablets that is working. I see software and hardware companies all of the time who aren’t sure who their customer is, and that stops them from defining good strategic goals, let alone achieving them.
Channel In an emerging market where there is an early dominate player, channel becomes very important. You need to know: Where and how are people going to experience your new toy, new technology or new service? Apple built a deep online, retail and partner channel (well, AT&T does have a lot of locations) before launching the tablet. The same was true of the iPhone. The web, of course, offers instant channel, but as in television, you have to get people to tune to your channel, so just creating a Xoom or PlayBook channel doesn’t mean people will tune in (and buy through it).
Brand This is tied to audience to some degree, because the brand has to resonate with the audience, but at a deeper strategic level, companies need to clearly position their brand promise, understand their current brand perceptions and engage in a way they can win given their current state. Apple clearly curated their brand as consumer friendly anti-IT IT. Facebook and Twitter have done that as well. The consumerization of IT is a branding opportunity in itself and Apple clearly gets that. RIM, Dell, Microsoft and Motorola have feet in multiple camps, which make their products appear more ambiguous than they should.
And of course, with all of these areas, you need to execute on the positioning so that the marketing accurately heralds the customer experience, and the customer experience reinforces the marketing.
Things you shouldn’t worry about:
Barrowing ideas Unless you violate a patent. If an idea works, you may be called an imitator, but people are saying your product’s name in the same sentence as the originator. And BTW, the originator probably wasn’t all that original, they just received mindshare before anyone else. Remember that Apple-Xerox thing back in the early 80s?
Not living up to a market expectations Apple is still getting grief for the lack of Flash support, but despite the sometimes snarky tone, they are getting traction with their HTML 5 thought leadership positioning. They deliver so much value in other areas that this omission didn’t derail their adoption rates. How do I reconcile this with the features comment above? Apple had the luxury of defining the most popular of the early experiences, and since Flash was more on an annoying omission than a value-critical one, they established that the pundits over-hyped the necessity for Flash as a success criteria and they won that argument in the market.