Tag Archives: Apple

Loyalty Part 2

Posted on by

Last time I wrote about my customers, employees and investors who have stayed loyal, have stuck it out with me, and how much I appreciate that. (If you missed it and you are one of the unnamed many, thanks!)

As I have watched these names move from device to device, it makes me wonder which device makers are really creating brand loyalty. Clearly Apple is the king, as the tongue-wagging fanboys get overly excited about every device they bring out. (Frankly, usually for very good reason as they make some amazing devices.) RIM is another one, although their loyalty is more of the cool, upper management variety than the technology geeks of the world. It’s the “look, I can send emails rapid fire while the rest of you slobs are wasting time waiting for the train” variety.

This is where Palm and Microsoft are struggling. It seems that people can’t wait to get away from Windows Mobile, that it’s a compromise when they can’t get something else. The loyalty doesn’t seem to be there.

Palm is a different case. They once had it. The loyalty of their customers was of the Franklin-Covey, life organizer variety. The “you can pry this device from my cold, dead hands” variety. Somewhere along the line that disappeared. Now all those customer names are appearing on lists waiting for iPhone or BlackBerry Storm versions of our software. Maybe they got tired of waiting; maybe they got tired of the horrible support and square pegs in round hole products.

But maybe I’m wrong. Maybe these folks have been waiting for a new Palm — that promised device from those vaunted luminaries of mobile tech. And maybe they will be rewarded. When Apple almost died, they had also almost lost their loyalty base. That group has come back en masse over the past decade and, at the same time, Apple has added a whole new generation.

Can Palm pull it off, too? We’ll see.

The New Palm. Same As The Old Palm?

Posted on by

It appears in early January that Palm will announce their new operating system, devices and direction. It is believed that the new Palm will also be the only Palm operating system used by the company, dropping the old Palm OS and Windows Mobile in favor of this new platform. (They’d keep supporting WinMo for its corporate clients only.)

I’m skeptical that Palm can survive this transition. It isn’t 1996 any more. The mobile market back then had no major players. Palm was able to build every thing without having direct competition. Now all parties — customers, carriers, developers — have huge expectations. And there may be too much history with all three for Palm to woo them back into the fold. A brief explanation for each:

Customers
Customers have spent the past six years hearing how Palm is bringing out their next operating system. Most seem to have migrated to Windows Mobile, BlackBerry and iPhone at this point. Let’s face it, the Palm OS is antiquated, looking and feeling like yesterday’s technology. And with the company on the ropes financially, there is a big dis-incentive to acquire one of their devices.

Apple was in a similar situation when Palm was coming into existence ten years ago. Apple, though, had a legendary founder back in the fold and a new deal struck with Microsoft to ensure its survival. Palm will need some similar move to live through this one.

Carriers
There’s an interesting alignment occurring among the carriers here in the States. Exclusives are all the rage. Apple partnered with AT&T, RIM launched its BlackBerry Storm exclusively with Verizon, and Google launched Android exclusively with T-Mobile. On the surface we are returning to a world where if you want a certain device you have to switch carriers to get it.

It makes sense for carriers and companies to partner like this, of course, as developing hardware for one specific carrier platform is a lot more efficient than doing it for all of them. And the carriers can push one major product, differentiating themselves from everyone else. But if this trend holds true, it also has the effect of locking out new participants in the market. Where does Palm go? Sprint, a distant number four in the carrier races? Well… they did with the Centro. But this doesn’t necessarily get them the exposure they need to be successful. And what happens when Nokia comes calling? Does Palm get back-burnered for the next latest and greatest? It’s a vicious cycle: Palm comes out on a smaller carrier, doesn’t get huge sales, the carrier then feels they wasted time and money and doesn’t promote the product, which then supresses sales even further.

Developers
Excuse my bluntness, but Palm screwed their developer community. In 1999-2000, Palm used to talk in terms of the Palm Economy. But when the chips were down rather than doubling down on its community, the company decided it was easy enough to make a quick buck off of us. Palm, who spent years wooing developers to its vertical markets, suddenly dropped those vertical markets leaving its developers to hold the bag. Resellers went from charging 20-30% of each product sold in 2000 to 65-70% in 2008 (for reference, the world’s largest online reseller Amazon charges 25% and holds physical inventory). In addition, they added restrictions on what we could do with customer information and required our own web sites to be removed from our products, meaning we had to develop a special version of our software for each reseller.

There are great alternatives out there now on other platforms. With Apple, RIM, Google, Microsoft and others, there is a direct marketing channel (or soon will be) that reduces our support costs by eliminating installation issues and charges a reasonable 20-30% of our retail price.

Given that, all will be forgiven if Palm can sell enough devices. At the end of the day, developers will gravitate toward any platform that sells lots of units and makes it reasonable for us to sell our wares.

But with the markets working against them on all three fronts, it will be quite a challenge to do so. If nothing else, Palm will have an intellectual asset that could be a catalyst for company acquisition. A year ago, with one outdated operating system and another licensed, Palm had nothing to sell. At least now, it might.

We’ll all find out the first week of January.

Economic Downturns Are Good For Business

Posted on by

A few years ago, at the end of Infinity Softworks’ second act as an education company, we decided to raise a round of funding. To make a long story short, I concluded early in the process that that was not possible and abandoned the idea. But two years later, as I watch the news wires for funding deals, a whole bunch of education companies have raised money. While the timing didn’t work out for Infinity Softworks’ education plans, here’s hoping it does for FastFigures and our re-focus on business customers.

Well, that left me thinking. Some of our biggest markets for FastFigures include real estate, financial and investment services. Could we have better timing? Let’s see. A busted real estate bubble, the banking system struggling, and Dow Jones sinking like a lead balloon… great time to sell to those folks!

But the truth is it is a great time to start this business. These problems won’t last forever, and when these problems fade then we will be in a great position to grow with our customers. When everything was easy — when a house sold in a day — no Realtor needed to care about educating their customers about mortgages. The only expertise they needed was to get the offer in fast. Now, with Realtors fighting over a small collection of buyers, education and experience will be the key.

Seth Godin wrote in his post “Looking For a Reason To Hide” a very interesting piece of information: a large chunk of the Inc 500’s fastest growing companies were born in the days following 9/11. From the darkest moments springs new life. It’s true with the tech companies I have watched all my life, too. Apple, Microsoft, Oracle, Google, just to name a few, all born in the dark days of recession.

So we start slow, we put the pieces in place, we learn and listen and take action on that. And then when the market shifts, if we’ve done a good job of learning and listening, then we will be ready and waiting to grow!

Rating Mobile Platforms for Development

Posted on by

So I need to make a business decision about which platforms to develop for, and that decision almost always comes to how many potential customers versus the cost to develop and distribute for the platform. I’ve broken each down based on recent events.

Potential Customers

The first step is to see what the potential revenue is based on the number of people buying a platform and likely to buy one in the future. The numbers of unit sales are readily available. Of course, this doesn’t actually tell you the number of users since those who stick with a platform tend to buy into each subsequent generation of products. In the smartphone space, this number is easy since most users stick with their current device for the duration of their contract. Of course we never really know how many people are new and how many people are buying the next generation.

Given all this, it is just the baseline. If there aren’t enough units sold and those customers don’t seem to be the kinds of customers that would want to buy my products, then I’m not going to develop for it. The real decision point comes once the cost components are analyzed. How do I view the major platforms (from within North America)?

  1. Hot: Apple iPhone/iPod Touch, RIM BlackBerry
  2. Simmering: Microsoft Windows Mobile
  3. Cool: Nokia Symbian, Google Android

Surprised? Remember, I am looking at units sold and the kinds of users being attracted to the platforms (relative interest in my products). Symbian devices have not made much of a dent here in North America and Android is too new. An International discussion would be completely different. But I believe if I can’t make money in my home country then I can’t make it overseas, particularly given the added costs of product localization and foreign distribution. As for Microsoft, they always seem to be there but that’s it. People buy their products but no one seems to love them. It’s a real shame.

Distribution

The next major decision point is distribution. Generally, I only care about distribution in terms of costs to reach customers. I don’t really see distribution as a means of getting to the customer — that’s what marketing is for. Instead, distribution is all about product delivery. How easy is it for people to find my products once they want to buy them? How easy is it to purchase, download and install? And how much is it going to cost me as the company to do it?

This is where the wheels have started to fall off the bus in the mobile business over the past 6 years. Costs have been through the roof (67% of product price in some instances) and it hasn’t eliminated any of my install and reinstall issues.

And then comes Apple. Charging 30% and eliminating all install and reinstall issues in the process, we finally have a channel of interest. On top of that, Apple is doing a ton to raise the interest and awareness of third-party applications, a huge added bonus.

And Apple started an avalanche: Google and now RIM have announced their own stores, and Microsoft is rumored to have one in the works. All have roughly the same terms (20-30% of retail price) and the same promise.

So how do the major platforms shake out?

  1. Hot: Apple, Google
  2. Simmering: RIM
  3. Cool: Nokia, Microsoft

Until those rumors play out for Microsoft and Nokia, they will stay on the backburner when it comes to distribution, at least. As for RIM, the devil is in the details. Some we know (20% cost to developers) but many more we don’t (how will partners be treated, will it be on the devices, will anyone care).

Development

This is where mobile computing development gets really hard. Every platform takes its own custom development. Fine, they all are either C-based or Java-based, but every user interface is different. The costs to develop for a subsequent platform are staggering, particularly when the size of smartphone software development companies are taken into consideration.

I have been hearing a lot of noise in dev communities about Android lately. These old-time developers, who developed in C on Palm and Windows Mobile, are now faced with moving their applications to Java on RIM and Android. (iPhone and Nokia are C-based.) Even if all devices used only Java or C, it would still be a daunting task to redevelop the user interface layer of the application for every device.

The other big announcement in the previous weeks is RIM’s support for Google Gears. Google Gears allows a web site to be used even if there is no web connection. So as a developer, we can hypothetically write a web-based application and then run it locally (without an Internet connection) on supported platforms. With RIM’s announcement, that means that RIM, Android, Windows Mobile, Windows, Mac and Linux systems all support Google Gears now.

Hot, simmering and cool? I can’t rate them. Every platform takes custom development still. At some point, hypothetically, we could support iPhone native along with BlackBerry, Android, and Windows Mobile with Gears, but not today. Today, the other factors have to be considered first.

Conclusion

If I’m a developer today, I am looking very hard at iPhone (as we are). They have the distribution channel and unit sales to be exciting. If I came from the Palm world (as we did), I also have some code that can translate over. It’s still a custom development job, but at least not a complete one depending on how much back-end programming has to be done.

My next decision is harder: do I leverage my C code base and develop for Microsoft’s multiple variations of Windows Mobile or do I jump to the hotter platform with better distribution promise in RIM? And my answer to that one is: follow your customers.