Friday, June 29, 2007

June 29 (This Day in Business History--A Turning Point or Footnote?)

August 9, 1995: Netscape goes public with its IPO
August 24, 1995: Windows95 is launched.
These dates have important significance in business history--at least viewed from an information technology and business strategy perspectives.
June 29, 2007: iPhone is launched..

In about five years (say 2012), will we look back on this date and remark that Apple revolutionized the communication and entertainment landscape or will it be a footnote in business history? All indications are that this will be marked as a critical point in history-whether Apple maintains its lead or not. The design will be imitated more; multi-touch may be more prevalent; and the business model of cooperation between handset makers and network operators may be more widespread.

We will know later today how the public reacts to the product and the service. More important than the product design elegance will be the initial reaction to the service quality that depends on AT&T network (I am keeping my fingers crossed). Pundits have mostly been enthusiastic about their initial tests--David Pogue of New York Times gives it a glowing rating (with caveats about AT&T's potential network limitations; Walt Mossberg of the Wall Street Journal is also positive about it. Soon, we will get initial reactions from the die-hard Apple enthusiasts who have been camping outside Apple stores all across the country.
So, what am I looking to track in the initial phase? Not the sales (that's a given; it will be sold out for sure) but the level of enthusiasm in the blogosphere; the number of complaints about poor AT&T network coverage; and the frustrations users have about the differential service levels across WiFi and cellular networks.

June 29, 2007. I see the launch of iPhone as a product that straddles different industry boundaries in the spirit of network-era competition; I see it as a new way to co-create value involving network of partners (in this case Apple and AT&T initially; apparently, Verizon had their initial chance but rejected it). I also see it as a strong reflection of Steve Jobs' approach to stick with relatively closed architecture and go counter to the conventional wisdom that calls for more open architecture. It is more than an important date for Apple; it may signal a new era of network-era strategy and competition and cooperation. There will be many moves and counter-moves as this gets played out over the next few months and years.

Wednesday, June 20, 2007

iPhone and YouTube: Why I Worry About Quality of Experience

iPhone launch is about a week away. Announcement about better-than-expected battery life is a welcome news.
"With 8 hours of talk time, and 24 hours of audio playback, iPhone’s battery life is longer than any other 'Smartphone' and even longer than most MP3 players," said Apple chief executive Steve Jobs, Apple’s CEO. "We’ve also upgraded iPhone’s entire top surface from plastic to optical-quality glass for superior scratch resistance and clarity. There has never been a phone like iPhone, and we can't wait to get this truly magical product into the hands of customers starting just 11 days from today."

Today's announcement about YouTube clips available on iPhone is to be expected as a logical outcome of Apple--Google partnership. Apple had previously announced the YouTube link on its Apple TV. Apple announced that:
iPhone has a special YouTube player that you can launch right from the home screen. So now you can access and browse YouTube videos wherever you go. And when you find a video you want to send your friends, iPhone can even create an email with the link in it for you.

“iPhone delivers the best YouTube mobile experience by far,” said Apple chief executive Steve Jobs. “Now users can enjoy YouTube wherever they are—on their iPhone, on their Mac or on a widescreen TV in their living room with Apple TV.”

Those who are lucky enough to get hold of iPhone on June 29 will have access to about 10,000 videos on June 29 in the H.264 format.
Why do I worry? Quite simply because people may expect the video streaming to be at the same level of quality as they access it on their computers (broadband) and Apple TV. Moreover, there will be inevitable differences in quality of experience using WiFi and AT&T's cellular network. I only hope that this does not turn out to be a dud.

Monday, June 18, 2007

Widgets and Web 2.0

I was beginning to develop a catalog of different types of widgets that make web 2.0 functionality happen and I came across this post. I think it is a very good starting point for anyone that may be thinking of mapping the functionality of widgets against their business objectives. i will blog more on this later when I have developed a typology that may bring out the business implications of widgets.

Many widgets are already widely used: YouTube and iGoogle are popular examples. This one widget from Random House is an interesting initiative. Here is a brief summary of their announcement:
The widget is a lightweight internet application that can be easily embedded into a Web page. In its small version, at 195 x 335 pixels, it fits snugly into any website and delivers interactive book previews by allowing a user to page forward and back through the book or search for keywords in the actual text content of the book - without ever leaving the Web page.
Now, you can let your mind wander and examine what new applications can be delivered as widgets to take advantage of web 2.0 functionality.

Here is an example that shows its potential.

Thursday, June 14, 2007

Apple iPhone: Who Will Manage the Customer Interactions?

One of the challenges in the network era is the multiplicity of actors involved in customer relationships. It is easy when the relationships in the ecosystem are 'away' from the customer--such as the multiple companies involved in the design, manufacturing and supply of Apple iPhone. In such a case, Apple acts as the prime contractor and the partners carry out the assigned tasks to create the product in ways specified by Apple. What makes Apple iPhone interesting is that both Apple and AT&T will have complementary (and in some cases, overlapping) roles in customer interactions. This is an inevitable issue in ecosystems where value is co-created by multiple customer-facing entities.

In the case of iPhone, here are the areas to watch out for:

1. The much-hyped Apple iPhone will be launched on June 29 at 6:00PM (local time) at relevant Apple Stores (about 170) and AT&T stores (about 1800). Clearly, anyone who has walked into both the Apple Store and the AT&T store knows that these retail store experiences are NOT the same. However, there are far more AT&T retail stores than Apple stores. So, the chances are that more customers will buy an iPhone from an AT& store than an Apple store. Now, if it is a simply a matter of buying a product from a store, then it may not mean much but, in this case, there is a minimum 2-year contract with AT& service. So, AT&T will bill me for the phone service (which is very different from any other Apple product or service).

2. To set up an iPhone, we need an acount with iTunes. Here's what we know now. Apple explicitly states that:
To set up your iPhone, you'll need an account with Apple's iTunes Store. If you already have an iTunes account, make sure you know your account name and password. If you don't have an account, you should set one up now to save time later. To set up an account, launch iTunes, select the iTunes Store, and click the Sign In button in the upper right corner of iTunes. Sign in and you're ready to go.

So, it looks like customers will have atleast two separate interactions--a bill from AT&T for phone services; and a bill from iTunes fo rmy media (music and video downloads). I only hope that customer service encounters do not hugely differ between AT&T stores (and call centers) and Apple stores (and call centers).

Service encounters have a huge challenge when multiple companies interface with the customer, such as: who has what data? who owns the responsibility for customer loyalty? We know this from business-to-business service interactions in consulting and IT services. But, it is new in the customer domain.

So, Apple iPhone is more than just a product launch. Media publications such as Boston Globe have been focused on competitive responses from Palm, Nokia, HTC, Prada and others. But, those commentaries miss the most important point that this launch signals a NEW way of crafting winning strategies in an network-era. Prada may look like iPhone but the customer interaction is primarily with the service provider. Apple iPhone launch with a preferred partner, AT&T is different.. And over time, Apple will announce non-AT&T carriers. How will that impact the relationship between the launch partners? This product spans more functionality than other phones and consequently, will involve other key partners (example: videogames and banking?). There will be mishaps, there will be annoying and frustrating posts in the blogosphere. But, we should glean valuable lessons from this initiative for other settings when multiple entities are involved in customer interactions.

Look beyond obvious imitators from a product perspective. Look at how the different companies are working together to orchestarte winning customer interactions. The more significant innovation may be in how different companies work together to orchestrate service interactions

Wednesday, June 13, 2007

Graduation Speech and Apple iPhone

Officially, the college graduation season has ended. I do not know how many remember the graduation speaker(s) or what they said...

Now, we are inching towards the Apple iPhone season!. I am sure these students will remember their graduation speech at least till they see the iPhone!

Tuesday, June 12, 2007

Browser Wars 2007: Safari 3 for Windows and the iPhone Connection

We all remember the browser wars of the last 1990s: Navigator versus Explorer; Netscape versus Microsoft. Some may also recall the ensuing discussions, debates,legal cases and testimonies on Microsoft's monopoly powers and the intricacies of bundling products in the digital networked world.

Fast Forward June 2007. ON June 11, Steve Jobs introduced Safari 3 Public Beta. What made this announcement important was that it is for Mac + PC. Just like iTunes is for Mac + PC. Just as iPhone is for Mac + PC.

The stock market was disappointed that Apple did not open up the iPhone architecture for third-party applications. In fact, what most analysts failed to see was that Apple has opened up the iPhone architecture through Safari 3 that is compatible with Windows.

The browser wars of the 1990s was about the personal computer. The browser wars now is about the mobile phones. The Safari 3 launch is not about fighting yesterday's battle to control how we access the Internet through personal computers but is about the jockeying underway now to control how we use the mobile phones.

Just as making iTunes Windows-compatible allowed Apple to appeal to a broad base of consumers, this announcement is to selectively appeal to a broad base of Windows users who may be attracted to iPhone. Safari on iPhone automatically syncs bookmarks from PC and Mac and that's where the seamless connection confers advantage to Apple. And at this point in time, the built-in-search engines are Google and Yahoo on the iPhone.

In the coming months, we should look at the strength of third-party developers writing applications on Safari 3. That would be a lead-indicator of how Apple is likely to control the network architecture relative to others (especially, Microsoft, RIM and Symbian). Making Safari Windows-compatible may turn out to be a key decision on how broad and how deep Apple can succeed in the network era.

Sunday, June 3, 2007

Media 2.0: BBC's Journey Update

Here is a good summary update of what BBC is doing along its journey towards BBC 2.0. Mark Thompson embraces many of the core underpinnings of the shift to 'letting go' of the content so that different partners and customers can consume it in different ways. I believe that the speech was given on May 30, 2007. I had speculated before in an earlier blog post about BBC's transformation to the 2.0 world and it is informative to see that BBC is making good progress.

Friday, June 1, 2007

Microsoft Surface: Thinking through business imapcts

By now, we have seen previews of Microsoft's latest product named Surface. Steve Ballmer said that: “With Surface, we are creating more intuitive ways for people to interact with technology..... We see this as a multibillion-dollar category, and we envision a time when surface computing technologies will be pervasive, from tabletops and counters to the hallway mirror.” And many blogs have reviewed them. See David Pogue's post here. Jeff Han at NYU is one of the leading researcher on multi-touch interaction research.

Here is a good video from Popular Mechanics.

The challenge with any new technology innovation is thinking through the possible trajectories of evolution. Our initial reactions often is often simple questions such as: Who will buy it? Who needs it? How much will it cost? What products will it replace? etc. etc. Those are valid questions. Looking at it from the point of view of users (demand-side) and not technology providers (Microsoft, in this case), we could ask--what new functionality can we create and differentiate from our competitors? Not by embracing the standard technology but by adapting the functionality to differentiate and deliver new value. In that sense, demonstrations from vendors are either stylized (as in the video above) or limiting (because they do not fully understand how differently the features and functionality could be used).

It's far more important to see how the lead-users embrace the technology and show the benefits. Microsoft has clearly partnered with some interesting companies such as Harrah's Entertainment, Starwood Hotels and T-Mobile (may be others as well). I like to see early (honest) results from trials and experiments that demonstrate the business value (cost savings, customer satisfaction, increased revenue and profits etc.) Beyond the cool features of enlarging digital images and moving music around, we need to see hard-facts to make the business case to deploy such devices on large scale. We need more than testimonies from these companies surrounding the introduction of such new products. We need to see what they find as the numbers (and logic) supporting the business case they make to the hard-nosed CFOs.

This is a 21st century version of the business challenges of localized exploitation that I wrote in Sloan Management Review. In the early 1990s, the new technologies were airline reservation systems and inter-organizational order-entry systems (through EDI). Today, they are web 2.0 and multi-touch interaction computing. Technologies may have changed but the need to think through customer value (and competitive differentiation) has not becomes any less important.