It was a lesson PC manufacturers had to learn the hard way. Abdicate control of the user experience to a third party, and you have little value left to add.
Before long customers consider your products commoditised clones. You compete only on appearance, reliability, price and marketing expertise. But then, once you decide to outsource your manufacturing to the same Chinese factory that is working for your competitors, reliability ceases to be such a consideration, and pricing becomes ever more important.
Think back to the last decade of the last century. Difficult as it may now be to credit, Computer Shopper regularly published 1,000 plus page issues. Other PC magazines were also obscenely obese.
Today that is not the case. There are now far fewer computer magazines, and all print fewer pages. There is simply less advertising to be had.
Of course, the internet has been a factor. Equally, retailer numbers have diminished. But manufacturers such as AST, Apricot, Carrera, Compaq, Dan, Evesham, Gateway, Packard Bell, Time and Tiny, to name but a few, have also been subsumed or disappeared.
All found that simply producing a Windows PC with Intel inside was not enough. Bigger companies like Acer, HP and Dell could do the same and, thanks to the economies of scale, were able to sell essentially the same product for less.
Only Apple, with its own operating system, could stand apart and continue to command a price premium.
It is a lesson that many in the mobile phone industry have taken on board. Go Windows Mobile or Android today, and tomorrow it could be your company that has to close.
Should your handset or your network have no significant features to differentiate it from its competitors, your only choice is to be cheaper. Follow that route, and eventually and inevitably, somebody has to go out of business.
Ralph de La Vega, CEO of the American AT&T Mobility andConsumer Markets, recently make the point that proprietary products such as the iPhone 3G and Blackberry Bold could launch, even in these economically troubled times, and “have people standing in line for them.”
“The iPhone,” he said, “provides low (customer turnover), high revenue and high loyalty and that’s good for profitability.”
Conversely, although AT&T continues to assess Google’s Android operating system, he was not as yet prepared to make any moves to carry Android phones.
Similarly Dan Hesse, chief executive of Sprint, is reported as having told the National Press Club in Washington that he didn’t think that Android, in its current form, is “good enough to put the Sprint brand on it.”
If the networks are in no hurry to support Android then handset manufacturers are unlikely to feel compelled to make any serious attempt to offer the operating system. The networks are, after all, their biggest customers.
Windows Mobile is already largely ignored, for the simple reason that it is not very good. Likewise Android will be avoided for as long as possible, in the hope that it might go away.
Unless, of course, for some kamikaze reason, anybody really believes that turkeys have a duty to vote for Christmas.
