Friday, 23 October 2009

Nokia sues Apple

A brief note today (you can click the title to read about Nokia's latest strategy).

We don't recall Apple using the court as its innovation lab.

Nokia, wake up- focus on the customer and not on Apple.

Ritu, Venkat

Wednesday, 21 October 2009

Apple, Nokia and CNN

No, they have nothing in common.

Apple announced its sterling results recently. And Richard Quest on CNN was analysing last evening the same with the help of some tech correspondent in the US and UK.

Apple makes cool products.
Nokia stumbled in looking for volume market share- and has so badly lost its 'cool factor'.
And CNN, business report on these two companies was so pathetic, it made me angry.

Our strategy thumb rule states that no company has cconsistently gained volume market share and maintained premium pricing (high margins) at the same time. Period. It has never happened.

Mass markets and premium products require very very different execution skills. They cannot remain in the same company.

Lexus and Toyota is a striking example of how to make it work.

In 2007, we mentioned that Nokia was possibly making a very big mistake is running after market share numbers. Sure, in the short run "analysts" reward companies for their sales. More sales means more revenues. But that is short term.

A technology company with high margins needs high innovation and investment in technology. When it gets distracted with mass market products, its capacity to dedicate resources (money and people) to technological advances reduces.

Sony Ericsson, in the meanwhile has simply gone the other way and now focuses on VALUE market share. We believe they will benefit in terms of bottom line as well as strengthening of the brand.

Apple keeps making sexy products and charging sexy money. What i find interesting about Apple is that they don't produce anything for the mass market. As the technology becomes out-dated, they simply drop the price to allow more people to enter their product categories. This is interesting. Designing and selling "cheap products" is a costly proposition. Selling cheap older technology is a great way to bring in new consumers.

And CNN got all of this wrong. The tech correspondent from California says " Apple is able to read the consumers needs of tomorrow and make products around that". !!!! What????

Their UK correspondent says " Apple makes great products, but i don't expect them to challenge Nokia's market share for a long time." Wow! He still does not get it. The day Apple starts to chase global market share folks, sell its stock.

All Apple does is use technology to create easy user interfaces. Lets not make soothsayers out of them. They simply listen to their consumers and enhance user experience.

Strategy is about choices. The first one to make is, who is my consumer?

If we start out to satisfy everyone, sooner or later we will satisfy no-one.

Venkat, Ritu

Monday, 12 October 2009

animation in advertising

I saw recently Michelin's ( new TV advertisements on the tagline "the right tire changes everything". Click title to see ad on youtube.

Without going into a discussion on the content, the position , message etc i simply reflected on the use of animation.

Bibendum, the Michelin mascot cleraly works better in animation that in real life. Animation proposes modifications to Bibendum's expressions and actions that would be difficult to replicate with real life actors.

And since Bibendum 'humanises' the tire like nothing else, he does appear at the centre of all advertitisng. Is this a good idea in itself? A very thin line between using the Michelin man to help tires emote, verus overexposing him.

Coming back to animated ads. (Coke has started this as well).

Unfortunately for the advertising industry Pixar is setting the standards in the animation business. And i would believe that consumers that see animation advertisements are immediately comparing the work to Wall-E or Nemo. TBWA is not a Pixar and the production quality shows.

Animation works well when it creates an incredible world for its characters. Worlds with lights, colors, sounds that seem more real than real. That's the difference between animation and cartoons.

Animation works when it uses a great storyline and humanlike characters. With expressions, with an interaction that allows us to experience our own lives even while looking at a movie about monsters, fish or outdated robots. Great animation
re-creates life through unreal metaphors.

Average animation is "plasticy" and establishes a disconnect from its message. Average animation simply exaggerates the human existence while drowning out the human condition. The message for a real world becomes distant.

The real risk for companies using animation comes not from their product competitors but from companies that exploit the animation technique so well that anything less than extraordinary simple makes the execution of the ad very ordinary.


Saturday, 10 October 2009

Obama, the Nobel peace prize and bombarding the moon

You guessed it. There will be a lot of debate on this.

Anyway, i read the two headlines together this morning and found the irony funny.

"NASA bombards the moon" ..and i thought to myself why they used the word 'bombard'to describe NASA's experiment. Heck- to think we are bombarding the moon as well.

And then "Obama wins the Nobel Peace Prize". Read immediately after the first headline i could not help thinking why the man who started bombarding the moon of all places deserved the peace prize.

To me his award signifies a couple of things:

Firstly, it appears no clear and obvious choice seems ot have existed. It seems no one really delivered a significant peace initiative last year.

The only 'stabilisation' seems to be in Iraq- so Bush should have won for that. Life in Afghanistan seems to have takes a turn for the worse.

African states embroiled in unrest continue. The Palestine problem is not solved. India and Pakistan continue thier uneasy peace.

Was the Nobel prize really needed this year?

Secondly, is that the only wasy we could get Obama to work concretely towards expanding peace in the world. Is this what we are saying about the most powerful man in the world. That his good intentions need a prize before he actually is motivated enough to do something about it?

I mean we could have as well given the prize to Sarkozy- it was after all the French that started confronting Somalian pirates off the African coast?

Its like tipping a waiter as you enter a fancy restaurant.


C'mon folks, Gandhi did not get a Nobel prize for peace. Imagine that. And now Obama gets it.