The Hit Parade: Hollywoodization of gadgets
Thu, Sep 27, 07
What does this:
“Piper Jaffray’s Gene Munster is estimating Apple sold half a million iPhones from 6 p.m. Friday through the close of business on Sunday. With the devices going for $500 to $600, that’s around $250 to $300 million in cash changing hands…”
and this:
“Sony Corp sold about 250,000 units of the new version of the PlayStation Portable in Japan in the four days since its launch…”
have to do with this?
“Cashing in on 18 years of pop cultural prominence, The Simpsons Movie drew a stellar $74 million on approximately 5,500 screens at 3,922 theaters over the weekend.”
The numbers (and the way they are now being reported) speak for themselves. Some likely consequences are:
- This is going to put enormous pressure on consumer electronics and media-focused PC companies to design for first impression.
- Trade press will likely penalize major products that don’t immediately garner “blockbuster” status with their opening week numbers.
- Fearing opening-week risk exposure, such companies may decide to fundamentally alter their product launch patterns in time and scale.
- Not fully-baked, version 1.0 products (like Microsoft Zune) where companies had grown accustomed to improving products over a long stretch of time may fare poorly.
- Hit factories like Apple may garner bigger market and mind share as they are able to design and showcase blockbuster products and take risks.
- A version of Variety Weekly Box Office may indeed become a routine part of high-tech reporting.
- For product designers, focus on opening-week success may become as important a strategic factor as focus groups, script doctors and last minutes movie re-cuts have been to Hollywwod.
- Since marketing costs will significantly rise for products vying for blockbuster status, resources will likely be siphoned off from other products not destined for the Hit Parade, thereby compressing the depth of product lines.
- Embarrassing kitchen-sink variety product introduction strategies like HP’s recent “Your Life is the Show” (buried under the avalanche of Apple’s new iPods) may be taught as case histories in business schools for what not to do.
Clearly, it’s a new ball game.
UPDATE: Here’s how Steve Jobs described the introduction of iPhone 3G into the marketplace: “iPhone 3G had a stunning opening weekend.” Not unlike the description of a Pixar movie opening.
Dell: “Apple has become the conformist company”
Thu, Sep 27, 07
As you may recall, company founder Michael Dell reacted rather definitively on CNBC’s Business Center to Apple’s announcement of retail stores back in 2001:
“No, you know, we figured out 10 or 15 years ago that you don’t need stores to sell computers,…We have stores; we call them online stores. Dell.com will generate close to US$20 billion in revenue for us this year. We think the best computer store in the world actually is at dell.com. Physical stores have been tried by a number of our competitors, and generally, actually I would say universally, that strategy hasn’t panned out.”
Of course, Apple stores have become the fastest retail operation to reach $1 billion annual sales in history, with per-square profit nearly 70% higher than Tiffany & Co stores.
Last week, when Michael Dell and his lieutenants introduced “Dell 2.0″ to the press in San Francisco, they were again asked about Apple:
“Apple has become the conformist company,” said [Dell chief marketing officer Mark] Jarvis, arguing that it’s now become so established as to demand an opposite. “I want Dell to be the different company,” Jarvis said, and when asked for the how, replied: “Watch this space.”
This appears to be an interesting brand repositioning. First label your competition inadequate and misguided, then try to emulate it by letting catwalk models introduce laptops with gaudy veneers at Macy’s, and finally ask everyone to “think different” by imagining Dell as the cool, new anti-Apple. And simultaneously seek salvage at Wal-Mart shelves with under-$700 PC boxes.
On Sep 26, 2007, Dell had a market cap of $63.56 billion. Apple’s market cap was $132.85 billion, on fraction of Dell’s sales and revenue.
UPDATE: In October, AAPL gained 17.55% to reach $161.12 billion, DELL only 1.91% to reach $64.80.
Could this be the reason?
