November, 2009

strategy — 6 Comments
30
Nov 09

The world’s biggest little market share

Apple has 'em right where they want 'em

It's Mac's 4% vs. the PC's 96%

Now wielding a fearsome 4% market share in computers globally, Apple finally has its competitors right where it wants them.

Seriously.

Because this huge gap in market share is laying bare a huge gap in profitability. And this one doesn’t bode too well for the big guys.

Apple simply has a better business model — racking up record profits quarter after quarter. Its market cap is now not only 5x that of Dell, it’s bigger than Dell and HP combined. There’s even talk of Apple pulling in more cash than Microsoft by the year 2012.

What the hell is going on here? Actually, it turns out that our PC friends were right: PCs are more affordable than Macs, and most people don’t think Macs are worth the premium.

Unfortunately, they stop reasoning one sentence too soon. There are millions of people in this world who will eagerly line up to pay a premium when they believe a product is actually worth it. BMW isn’t about to go under because their cars are more expensive than those from Honda.

Now that I’ve dumped on the validity of market share numbers, let’s look at … market share numbers. But this time, let’s look at a few that highlight Apple’s unique situation.

In computers over $1,000, Apple’s U.S market share in June was an almost unbelievable 91%. In October, 47% of the actual dollars spent on desktop computers in the U.S. were spent on Macs. And just to make themselves thoroughly annoying, Apple follows the same model in an entirely different product category. They also now out-profit Nokia, again doing so with a relatively tiny total market share.

Bottom line: you might think twice before you invest your money based on a head count. Market share is critical if you want to own the world — not so much if you want to change the world.

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advertising / creative / strategy — 16 Comments
25
Nov 09

Apple gets a little tetchy

Uh oh. I’m sensing a disturbance in The Force.

This is one of two new spots that just started running for iPhone. Both are doing something iPhone has never done before: they’re responding to an alarm. It seems that Verizon is scoring points with their relentless pounding of the widely disliked AT&T network, and it’s getting hard to ignore.

These commercials put up a decent defense but, unsurprisingly, they feel a bit defensive.

The network vs. network argument is actually a distraction for Apple. Because when they talk about the network, they stop talking about their truly monstrous advantage — 100,000 apps. They’re reduced to claiming simultaneous voice and data capability. In this sub-debate, whose advantage would you really prefer? Apple’s simultaneous thing, or Verizon’s vastly larger network that doesn’t drop calls?

Both of the new iPhone spots give us examples of AT&T’s “superiority,” then deliver the punch line: Can your phone and your network do that? The challenging, inelegant tone actually feels more like Verizon than Apple.

To be honest, I find it odd that Apple is even suiting up for this fight. The crummy network is AT&T’s fault. If the ship is springing a few leaks, I’d expect Apple to fire off a note to AT&T: “If you really love me, you’ll go beat up Verizon for me.” Who knows, maybe they’ve gone back and forth on that one.

Whatever their mission, Apple’s creative standards can’t be compromised. If they feel it’s important to go toe-to-toe with Verizon on the network issue, they have to find an Apple-like way to do that. They’ve pummeled their foe masterfully in the Mac vs. PC campaign. Surely they can find a way to slap Verizon around — and entertain us along the way.

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strategy / technology — 15 Comments
21
Nov 09

Investing in Chrome futures

Not sure about the logo, but the idea is cool

Google throws down its rubbery gauntlet

What is it about our industry that turns lovable, people-focused startups into evil monoliths bent on world domination?

Will Google, having seduced us with their genius, begin to shift their focus from our hearts to our wallets?

I’m actually a huge fan of Google and the countless cool things they’ve done. I will happily give them the benefit of every doubt. But last Friday they gave the world a sneak peek of their Chrome OS. That’s when my inner cynic started to get a little feisty with my inner optimist.

There’s no denying the idea of Chrome OS. It’s a netbook minus Microsoft, a device with tiny storage and huge potential. It will put your all your files and applications in the cloud, accessible anytime, anywhere, virus-free. That’s all good. It’s the rest of the story that starts sounding a little dark.

Chrome is a browser. Chrome OS is a browser-based OS. But it comes with a catch: you can’t install it on any ol’ netbook. The only way you can get it is to buy a pre-loaded netbook from one of Google’s partners, who will then write a check to Google. Even the ever-benevolent Microsoft lets you buy Windows and load it into the device of your choosing.

So it seems that Google is getting ready to try on the evil emperor’s new clothes. We’ll see how that fits.

Lack of device freedom aside, Chrome OS really is a step toward a future that makes a hell of a lot of sense. We may have grown used to the status quo, but it’s insanity for tens of millions to pony up for powerfully equipped machines, buy personal storage, maintain personal apps, worry about security/viruses and manage their own backups. Future generations will be amazed that we could waste resources and duplicate efforts on such a massive scale.

So I do think Google is working with the right roadmap. I just hope they won’t be tempted by that detour marked “get rich and enslave mankind.”

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naming / strategy — 9 Comments
19
Nov 09

Decrypting Dell

dell_confusion6I received an interesting comment on my recent post about the “overbranding” of Dell. In fact, I thought it made such good points that it deserved to be elevated to a full-blown post.

A warm welcome, if you will, for the Observatory’s first-ever “guest blogger,” Eugene — from I-haven’t-a-clue-where.

••••••••••••••••••

Ken, you’re actually being too kind to the Boys from Round Rock. Dell’s branding dysfunction goes much deeper than the fact that their latest computer actually has a name larger than the computer itself.

Setting aside the sheer quantity of sub-brand names and modifiers in their arsenal, the quality of all them, from a pure naming perspective, is terrible. Not to mention the fact that as a family of sub-brands, they bear no familial resemblance to one another. It’s obvious they were all picked out of thin air, to satisfy a particular need at a particular moment in time, without any sense of overall brand cohesion.

Perhaps Dell’s worst branding offense is what they’ve done recently with their netbook line and soon-to-be-launched smartphone. Instead of opting for one of their wacko made-up names, they’ve dubbed them both “mini.” These are defining products for the mobile internet era we’re in, and they’ve given these products the distinct disadvantage of a completely generic name. Worse yet, a completely generic name already being used by six other products in this category. Let’s see, do I want to buy an Inspiron Mini, a Mini 3 or an Inspiron Zino, which is actually a mini-Inspiron. The choices are endless. And endlessly confusing.

Speaking of choices, I went to dell.com to check out a Zino. It only took me about five minutes to find it, which made me think of the Dell tagline, “Yours is Here.” Yeah, somewhere.

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strategy — 19 Comments
17
Nov 09

Running out of things to steal

At some point Microsoft had to come to grips with reality: there’s just nothing left to copy from the retail tech leader. Time to get creative. Think outside the Apple Store. Looks like they got this one a few doors down, at Johnny Rockets.

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naming / technology — 11 Comments
16
Nov 09

Dell shifts into overbrand

zino

Dell layers a new sub-brand on its sub-brand

With a name that brings back memories of their dead-end acquisition of Zing, Dell now brings us Zino. Or should I say Inspiron Zino. Sorry — I mean Dell Inspiron Zino HD.

It’s not exactly a miracle of miniaturization (1.5 inches bigger than the Mac mini in every dimension). But I must admit, Dell has accomplished something fairly unusual: they’ve squeezed three brands into an eight-inch square.

This little bout of multi-branding actually pales in comparison to what Dell has accomplished across its product lines. It’s the branding equivalent of urban sprawl.

For example, a customer shopping for a laptop at dell.com can now choose an Inspiron. Or Latitude. Or Studio. Or Adamo. Or Precision. Or Vostro. Or Alienware. That’s seven independent sub-brands with crossover features, named with no apparent logic. Grafted onto those sub-brands are the sub-sub-brands: XPS, Mini and now Zing. I mean Zino.

I’m not speaking out against sub-brands. I’m speaking in support of common sense. Isn’t the whole point of creating a sub-brand to distinguish a family of products? Seriously, how many customers can play back what Dell’s product lines stand for?

“The more, the merrier” is not a marketing plan. That Dell can provide a ton of choices is a wonderful thing. That they can’t organize them into clearly defined sub-brands is a shame.

Oh god. It’s happening again. I’m feeling the urge to make another Apple comparison. But I will resist — and compare to Dell’s nearest competitor instead. Over at Acer.com, things are pretty darn clear: three laptop sub-brands, with multiple choices under each. Should Dell really give a damn how Acer does it? Only if they’re taking inventory of the reasons Acer just blew past them to become the world’s #2 PC maker.

To be honest, I’m surprised that Dell has let this go on. If making life simpler for customers isn’t reason enough to streamline, you’d think that cold, hard cash would be. While Dell’s margins have become microscopic, the cost of designing, manufacturing and marketing this mélange of sub-brands is huge.

But it goes as it goes. In Dell’s world, the Dell Inspiron Zino HD will be a perfect fit. Under-marketed — and over-branded.

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advertising / creative / naming — 16 Comments
12
Nov 09

Nokia scares up some interest

Latest contender for a chunk of iPhone’s share-of-mind: the Nokia N900 running Maemo software. (Don’t get me started on the naming.)

Nokia has created a video that’s dark and twisted enough that you feel slightly deranged for enjoying it. If you enjoy it, that is. I suspect the reactions will range from “hate it with a passion” to “greatest video ever.”

Personally, I like it. In that deranged kind of way. It’s unexpected, well-produced and fun. I went from bored to “huh?” to holy cow in the span of two minutes — then I went back for more. I love the moody hum, the quick cuts, the glitchy video, the casting/acting, the sheer shock of it, the gritty reality. Never did I imagine I’d see creative brilliance in a neck brace.

Love it or hate it, give Nokia credit for being fearless. We ad guys are forever whining that our clients won’t take a risk, and here’s a client who actually took one.

What’s most interesting to me is how the players have switched positions in this market. Apple, leading in presence if not market share, suddenly finds itself in the ubiquitous PC role — while the Nokias of the world get to play the feisty Apple-like challenger. In this upside-down world, Apple amuses us with mass-friendly, non-daring iPhone commercials, and the upstarts reach deep into the creative well trying to gain traction.

Does that mean Nokia’s creativity will make a dent in iPhone’s armor? Well … let’s not get carried away here. There are 100,000 reasons — the iPhone apps — why Apple will hold onto its lofty position.

Also, one teaser does not a campaign make. Searching the web, including Nokia’s site, I don’t see anything that syncs up with this concept. Who knows what the real marketing plan is. But I do think Nokia deserves kudos for getting creative and taking us to a new place. Even if this particular place is dark, dangerous and a bit disturbing…

Update 11:14am 11.18.09. Thanks to Cat for providing the following credits: Agency – Jack Morton Worldwide; Director – David Masters; Producer – Michael Richards; Original Concept – Matt McConaghy; DOP – Adam Hall; Editing House – Bravo Post Production; Editor – Brin; Post Production – The Mill; Post Production Producer – Luke Colson; CG Artists – Fabrice Le Nezet, Francois Roisin and Jules Janaud; Sound Production – Fitzrovia Post Production.

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technology — 3 Comments
11
Nov 09

But I only have five fingers…

Is there something beyond carpal tunnel syndrome?

Is there something beyond carpal tunnel syndrome?

When a new product displays such shameless ambition, it’s difficult not to admire it. As soon as you peel yourself off the floor and lose the giggles, that is.

Meet the OOMouse. Born of a company called WarMouse, you should probably be real careful where you aim this thing. For those who find its 18 programmable buttons a bit confining, it even sports a joystick built into the side. But you’re only human. No doubt you’re already dreaming of the wild macros you might create. Not to worry — the OOMouse actually has its own built-in memory to store them.

Wipe that smile off your face. You know you want one. Just imagine the looks you’ll get from your workmates when you park one of these babies next to your HP Pavillion dv5-1221tx.

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advertising / strategy — 10 Comments
9
Nov 09

Astroturfing with Microsoft

astroturfAnyone familiar with the term astroturfing? It’s what happens when a company or organization tries to create a grassroots movement — using fake grass. That is, they scheme to give their cause the appearance of a popular movement, when they’re actually out for themselves. Sound like anyone we know? We’ve been analyzing Microsoft’s efforts one by one, but when you zoom up for the aerial view, the pattern is pretty darn clear. Microsoft is on an astroturfing tear:

Look at the Laptop Hunters campaign — featuring real people searching for the perfect laptop. Oh. They’re actors.

Look at the Windows 7 launch parties — using you to enlist your friends and relatives into the revolution.

Look at the Microsoft Stores hype — promoting concert ticket giveaways to help build that frenzied crowd on opening day.

Look at the new Windows 7 campaign — portraying the new OS as a product “built by the people.”

One little problem: you can’t start a grassroots movement for a company that owns 95% of the market.

Microsoft knows that people don’t like them, so their solution is to, uh … show people liking them. There’s logic to this, but only to the terminally unimaginative.

In stark contrast to Microsoft’s astroturfing, Apple uses real customers in their ads only rarely — yet they’ve created super-passionate advocates. They don’t use other happy customers as a lure, they simply present their products in a variety of interesting ways. They strike a chord with current and new customers alike.

Great advertisers have always understood that authenticity is what connects with customers. When Nike celebrates the spirit of the athlete, it’s authentic. When Mini-Cooper talks about the fun of driving, it’s authentic. When Microsoft shows off a rising tide of happy enthusiasts — we can’t help but smell the fresh plastic.

[A big thanks to my writer friend Andrew Tonkin in LA for inspiring this topic. Check him out.]

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advertising / creative / naming — 13 Comments
6
Nov 09

Choking on their own words

I have to thank my new best friend Sekhar in India for this contribution. It’s an HP commercial currently running in his country. In just 30 seconds, it demonstrates the absurdity of complex product naming.

The narrator for the spot is speaking to us human-to-human, until someone sticks a gun in his back and forces him to say:

My HP Pavillion dv5-1221tx Notebook PC for high-definition entertainment tells my story. What’s yours?

Well, whatever my story is, I’m sure I can say it quicker than that. Pardon me for counting, but that PC moniker runs a full 13 syllables! I suspect this is a record that will stand for some time. Though I don’t doubt that new contenders are warming up in the wings…

Update 2:00pm EST 11.06.09: I was having some fun with this one, but I probably should have made a serious point. Every advertiser has to be extremely realistic about what a viewer will take away from an ad. It is unrealistic to believe anyone will remember this ridiculous product name. It is very realistic to believe they might remember HP makes a cool notebook. Forcing this crap into the commercial only distracts from the good stuff. Whoever insisted on this needs to be taken out to the shed.

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