The Mobile is different since Apple announced iPhone X this week, and there is no going back. Sorry, all “iPhone Killer” makers, you have a lot to catch up on. Nevertheless, I’m very excited to see a few significant changes staging the Super Premium Mobile market. WWDC 17 Keynote is the best Apple Event in the past few years, and I highly recommend you to check it out if you haven’t. As I can not stop talking about them with friends, it’s time to blog them. It should be fun when the future me to do a reality check.
Why Super Premium
Yes, the Premium(~$700) may still keep its volume for now. But: It’s the growth, stupid. All-new mobile launches will be BORING at least for the next 6–12 months. Because it typically takes that long to plan and develop a new Mobile product. I’m not factoring in big jumps as some of X did. Yep, some smart kids may make good innovations overnight, especially in the software industry. However, the Physics Constraint is still a thing in the Consumer Electronics industry. Don’t be fooled by the “cool kid”, it still takes hard work to make excellent products. But that’s a story for another day on product design, supply chain, production ramp-up…
Yep, $999 is overpriced nor worth the money. But, it’s not for a poor guy like me. Even I’m pretty happy with a $10 bag, Louis Vuitton still has a decent business. It calls Prestige Pricing to build a desirable brand for the Prestige customers.
Classy people might know Vertu. No worries if you don’t as most people either. That itself means something. Anyway, it is not likely relevant anymore, BBC: Vertu collapses. Nevertheless, it’s a good case study in this context. To be fair, there are many factors. But, one of them has to be taking the easy path. They literally applied the Luxury Good Business Model to Mobile, even if Product/Promotion fit seems pretty low. It worked a bit better in Feature Phone when technology changed much slower, but did not work for them in Smart Phone.
A fun fact, people were exiting about Moto RAZR back in 2004. No matter how you frame it, Mobile is Consumer Electronics with a rapid charging technology landscape. You can emphasize classical, fashion, and prestige (via expensive metal and precious stones) all you want. It is still hard for the prime time without technology superior. It won’t work if that is redefined every year. For example, no one ever makes a luxury digital watch brand popular as far as I know. I talked about a Luxury bag, just as an analogy to marketing. The “Luxury Car” may be a better model for the Luxury Mobile business.
Novel != Relevant
Yep, there is no new “innovation” and it all has been done before. Despite some hidden agenda, QCom published an interesting list just for that. But, it is never just about doing it first for Upmarket Goods. High-tech Mobile business is still A business. For the Alpha, the Prime, the one to lead the trend, it has to do every single aspect right. To name a few: mutuality/integration of technologies, utility user case, intuitive user interface/experience, position & marketing, and the list goes on. Let’s start with FaceID as an example. For example, Samsung also has the high-tech Iris Scanner. But, it just too complicated and lame for a dumb consumer like me. There are at least 3 Apple geniuses:
1. Look at me, the superior
The fingerprint is outdated & for other flocks. FaceID has everything: X sensors, ML, AI… A premium band is often selling a feeling of superiority. What else can fulfill that than envying eyes on you?
2. +1 fun use case: 3D emojis
- Free marketing: “Useful” is for serious people. Fun peoples socialize and do silly things for… well, fun. Which has a higher probability to go viral and to reinforce the Network Effect. Sorry, this is the party for cool kids.
- Collecting more facial data points to fuel its ML model. Other suckers might have the time to train your model, but not me, thanks. It’s almost 5 years since The machine-learned the cat on Internet, and a lot progress was made since, e.g. there has been 1 or even 2 magnitudes improved. However, ML is still very dumped without a reasonable amount of data for a specific task. Next time you hear ML/AL, please try to remember: a statistical model will never work if the sample size is one. Unless you are Thor, don’t use the hammer for every job yet ⚒️.
3. Play the long game
Apple plans ahead and lays down foundations for future use cases. To them, innovation is about the continuous drum beats 🥁 to be better. They take time to polish technology and only lunch when it’s close to the tipping point.
For example, Apple bought PrimeSense almost 4 years ago. That’s how long to put brand new tech. together right these days. Even when you get one right, not every startup can be integrated into a big organization well. There are human factors too, not just technology. The last time I checked, human nature has not changed too much yet, even in Silicon Valley. Do the math on this 20, Yahoo acquired.
To be fair, it’s not like anyone could do a better job. At the end of the day, it may be just a slot machine. The key may be trying to increase your odds and make sure you can try more rounds. Yep, not everyone has Apple’s scale, talent, resources, and culture to put them together. But, this is the kind of investment that might pay off in the long run. Otherwise, just work hard to optimize and cost down then. Because if vendors can do that for you, it’s a commodity. They can supply to your competitors too.
The million-dollar question: to buy or not to buy
For top OEMs, trust me the money is better spent on a real differentiator. Which could bring sustainable competitive edges. Don’t limit the option to Buy only. Depending on the situation, sometimes a better strategy may be to invest, outsource or whatever make more sense, be creative. No one knows which for sure. But, there is one thing certain: if you can pay someone else to do a better job for you, it is not the one to buy. For example, ODM/EMS can do a better job and more cost-effective in manufacturing. Buy the capacity, not the factory. A small startup is always more focused, dedicated, lean, and aggressive than your teams, especially on App and Service innovation. Invest and partner wisely. Never become their exit strategies. Which is often the beginning of the end.
Please, please, please try to learn from the history, and don’t easily be convinced that you will be much different from your predecessors. There are good reads out there, e.g. hTC: trailblazer to barely breathing and History of hTC’s Android design.
Full Disclosure
The opinions stated here are my own, not those of my company. They are mostly extrapolations from public information. I don’t have insider knowledge of those companies, nor a whatever expert.
