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Columns published last half of 2011 are below this list of headlines;
-----
Tech
Trends in 2012: What's Hot, What's Not?
Tech
Companies in 2012: Who's Hot, Who's Not?
Loyalty Programs: The Wireless Industry Could Be Onto Something Big
Solving
the Wireless Signal Strength Problem
It's
Not Just a Tablet - It's an Ecosystem
Selling the iPhone: One Carrier's Meat Is Another Carrier's Poison
The
Tough Task of Humanizing AT&T
T-Mobile's
New Strategy Could Be a Winner
For Analysts, It's Deja Vu All Over Again
The Best Cellphone Network for You Is . . .
Let's Solve the Real Wireless Problem: Spectrum Shortage
What Sprint CEO Dan Hesse Should Do Next
Lightsquared Must Survive
AT&T's Runaway Growth Days May Be Numbered
Verizon Workers on Strike - Who Will Win?
Why Can't Motorola Get Its Act Together?
Saving Your Company From a Brand Wave Wipeout
Phone Bill Auditing Can Save Serious Money
Is The Industry Analyst Business Dying?
The Industry Analyst Business is Changing
What a Tech Analyst Does
It's a Brand New Day for CenturyLink
Government Regulation Is Killing the Entrepreneurial Spirit
Sprint Nextel and LightSquared: Uh-Oh
http://www.ecommercetimes.com/story/74383.html
http://www.ecommercetimes.com/story/How-the-E-Book-Is-Reinventing-the-Book-Business-74383.html
OPINION
By
Jeff Kagan
E-Commerce
Times
02/09/12
5:00 AM PT
The
e-book revolution is changing the book publishing space quickly and completely.
Whether you lead, follow, or are lost in the chaos of this new revolution is the
only question. Readers love it. They have the choice of buying the old-fashioned
way at a store, buying a book online, or buying an e-book instantly.
What
do Amazon's (Nasdaq: AMZN) Kindle, Barnes & Noble's (NYSE: BKS) Nook and
Apple's (Nasdaq: AAPL) iPad have in common? What about authors like Stephen
King, Barbara Freethy, C.J. Lyons, Amanda Hocking and Michael Prescott? If you
said they represent the changing book publishing industry, you would be right.
The book business is going through a major transformation. Who will the winners
and losers be among publishers, stores and authors?
Just
as the iPod changed the music industry a decade ago, e-books are changing the
publishing world right now. The rule book is being rewritten, and lessons in
success and failure are coming from new and unexpected places.
As
an author myself, I am interested in following this changing industry. So I will
be writing about this topic often, getting thoughts and ideas from authors,
publishers, readers and investors as the publishing world changes.
One
thing is for certain: For better or worse, things are changing. There are plenty
of benefits to this new e-reader model. Of course, there are also plenty of
benefits to regular books as well. That's why I believe both will continue for
quite a while.
However
this e-book revolution is so new and growing so quickly, it is important to dig
in and understand it better as a reader, author, publisher and Web store.
I
wrote a book in the 1990s. By the time I wrote my second, a year and a half ago,
the industry had changed. Now it has changed again. And we are still just in the
first inning of this new game.
Of
course, popular authors and publishers who lead today may continue, but there
will be many new faces and names in the leadership column going forward.
Look
at all the brand new e-book publishing companies in the marketplace. Many of
them are growing rapidly. This opens up opportunities for many other companies
to support them as well. Many existing and brand new authors are finding their
way to this new category.
Understanding
this new world can be complicated. Some of these publishers work with both real
books and e-books, while others just work with e-books. How you get paid from
each is different as well. Understanding this changing industry can be a
challenge to wrap your arms around, but this chaos is where new leaders are
born.
Author
Stephen King is a leader in this revolution. A decade ago, he was the first to
publish a book online. That was before there were any e-books or any books
online. He wrote one chapter at a time, published it as it was completed, and
emailed it to those on his list.
King
is an explorer. An adventurer. Breaking old models. Changing the terms of his
contracts with publishers time and time again. He stretched the way the
publishing industry thought about delivering its product.
We've
seen this same transformation change the music and movie business. Over years,
they evolved from many different tapes, to disks like CDs, and now files that
can be downloaded from the Web. And it is not over.
This
transformation was exciting -- but devastating to the status quo and expensive
for users. We could no longer play the media we already purchased on the new
devices. Like you, in my basement I have boxes of old VCR and cassette tapes of
movies and books that can never be used again. That is unfair to the customer.
However,
books never changed. You can still read books the same way you did ages ago.
That is the good part. Reading with e-books expands the book world.
That's
the beauty of the Web. Downloading files changes everything, because a file is
just a file. Any device you have can still play that file. So we won't have to
re-buy our entire library time after time. No more waste.
The
book business has just started to ride the new e-book wave over the last few
years. Starting with the iPad and Kindle, then with the Nook, the Sony (NYSE:
SNE) Reader and others.
This
has started a chain reaction. Today, both Amazon and B&N are rushing as fast
as they can to get their e-book readers into the hands of all their customers.
Both are similar in some ways and different in others and excellent.
While
the traditional book publishing industry still exists, suddenly new and existing
publishers and authors are entering the space, changing the economics of the
business, and doing things in entirely new ways.
The
number of Americans owning e-readers has increased from 18 percent in Dec. 2011
to 29 percet in Jan. 2012. That's a roughly 11 percent increase over two months.
E-books have arrived.
Amazon
CEO Jeff Bezos and VP and Publisher Larry Kirshbaum are focused on changing the
book industry. Not destroying the old, like Apple does, but simply adding the
new and letting them both compete in the marketplace.
Today
we are seeing existing print authors who saw limited success in the traditional
book-publishing industry become very successful on their own in the new e-book
revolution.
We
see authors like Barbara Freethy, C.J. Lyons, Amanda Hocking and Michael
Prescott breaking into this new world.
These
authors and publishers are writing the new rule book as we speak. Things work
much differently in the e-book world. The rules of success are very different
from what they used to be.
Prices
of e-books are often lower for readers. This is creating an entirely new model
for this segment going forward. Books are often starting at the 99-cent range
and go up to a few dollars.
Today,
success comes from understanding how to market online. Understanding the
Internet and all the online e-bookstores like Amazon, B&N, Apple and many
others.
Of
course, you also have to be a good writer. That goes without saying. However, if
you can write, and if you can find your audience, you can do very well in the
e-book world. It's just a matter of finding your readers, and letting them find
you.
In
the traditional book publishing business, you would have to find an agent, then
find a publisher, then find bookstores for distribution. All of that was in the
hope of readers finding your book and coming back for more.
Smaller
niche authors had a hard time breaking in, because the business was looking for
big time successful authors like Nicholas Sparks, John Grisham, Stephen King and
Janet Evanovich.
This
e-book revolution is creating an entry point for so many brand new authors. It
lets authors find their audience and become successful without involving all the
others in the complicated mix.
That
is the challenge, however. Finding your audience and letting them find you.
One
question I have is, how do new authors do this exactly? How do they find their
audience? If you have experience with this, drop me an email and let me know
what works and what doesn't.
Think
of the marketplace as a giant pie with all sorts of slices. Even a tiny slice
has a few million people in the United States and millions more worldwide. Most
authors don't have to be as popular as Harry Potter's J.K. Rowling to be
successful.
Yesterday,
publishers would have to preprint books in the thousands and try and convince
bookstores to display them, front and center, in the hope they would be sold.
This did not play to the author's advantage. After a while, they would
disappear, making room for the next wave of new books. Limited real estate in
stores.
Today,
things are much different. Today, there are publishers who will print one single
book at a time. A customer finds the book online at Amazon, Barnes & Noble
or tons of other sites, orders the book, and a single copy is printed, shipped
and delivered to the customer in about a week.
That
is a complete remake of the old model. And that is for a hard copy of a book.
What about an e-book? They can be purchased online and downloaded immediately.
You can be reading within moments.
The
economic reality of book publishing is changing for both authors and publishers.
Typically, the less well known the author, the lower the price. This makes it
easier for first-time readers to try you without risk. Often, authors charge 99
cents for a few books to let readers see if they like the author. Then their
next books are higher priced.
In
the 1990s, I wrote a book called Winning Communications Strategies. It was
published in the traditional way. I visited bookstores and did signings. Books
were printed and shipped to stores all over the country.
Last
year, I published another book, called Life After Stroke, and I realized the
entire industry was reinventing itself.
I
chose FastPencil
as my publisher. This time, everything was easy and done online. I wrote and
submitted the book. They had an editor work with me on finishing the product.
They had an artist create the front cover. Then, when I approved everything,
they put it online. This is the new world of publishing.
This
time, the book is not sitting on bookstore shelves. Instead, if is found online
at many sites like Amazon, Barnes & Noble, Apple and many others. A single
copy is printed as it is ordered, one at a time. What an incredible concept.
Then
the reader has a choice. It can be purchased as a regular, hard copy book and
delivered in a week, or as an e-book, which can be downloaded instantly. As you
can see, the book publishing industry has changed dramatically.
CreateSpace
is another company that is in the same business. It is a separate company but
owned by Amazon. Lulu
is another. In fact, there are countless other new e-publishing companies that
are transforming the industry.
And
the business continues to change. Both Amazon and Barnes & Noble are
stretching even further. Authors can upload books for sale through KDP (Kindle
Direct Publishing) group, or through B&N PublT. Books published on these
sites are e-books only, and available for sale only on their Amazon or B&N
site.
Because
of the nonexclusive agreements authors have with these sites, they can publish
and sell their work on a variety of different sites with a variety of different
companies.
This
does mean lots of control, but also lots of additional work for authors managing
the process. It also means earnings are much higher than with traditional
publishing. Depending on the agreement, an author's earnings can range from
around 35 percent to 70 percent.
In
fact, this level of time-consuming work may open up the door to a new
opportunity. A kind of book agent who helps an author do all of this time
consuming work. Helps authors build their brand and success. Keeping up with
this changing environment can be a full-time job, so this sounds like a natural
next step.
This
e-book revolution is changing the book publishing space quickly and completely.
Whether you lead, follow, or are lost in the chaos of this new revolution is the
only question. Readers love it. They have the choice of buying the old-fashioned
way at a store, buying a book online, or buying an e-book instantly.
This
is an incredible new opportunity for authors and publishers, but there are
plenty of risks as well. Not everyone will be successful.
I'll
write more on this interesting topic. One thing I guarantee, this is a change we
cannot stop. This new wave is sweeping across the landscape and transforming
everything.
So
learn the new rules, embrace the changes, and ride this new wave to success.
This new e-book story is a bestseller, and it is just getting started.
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff
Kagan is a tech analyst and consultant who enjoys sharing his
colorful perspectives on the changing industry he's been watching for 25 years.
Email him at jeff@jeffKAGAN.com
http://www.ecommercetimes.com/story/74331.html
http://www.ecommercetimes.com/story/Solving-the-Snowballing-Wireless-Data-Problem-74331.html
OPINION
By
Jeff Kagan
E-Commerce
Times
02/02/12
5:00 AM PT
The
right hand doesn't know what the left hand is doing. Carriers and handset makers
are advertising and marketing their new smartphones and apps and attracting
users. On the other hand, they are throttling back the amount customers can
actually use and the speed at which they can use it. It's time to fix this
problem before we are all choked with slow connections, poor service and high
prices.
Every
day we hear about how AT&T (NYSE: T) Mobility and Verizon Wireless are
running around like chickens with their heads cut off trying to grab as much
wireless spectrum as they can. We all remember the quality problems AT&T
smartphone customers suffered. That same future is in store for every carrier
and every customer unless we come up with a solution.
My
Pick of the Week topic is how Google (Nasdaq: GOOG) is about to invade
your privacy -- and a solution for that.
Houston,
we have a problem. The wireless industry faces a real and growing concern over
wireless data bandwidth. In fact, there is both a short-term and a long-term
problem.
In
the short term, carriers like AT&T and Verizon are rushing to acquire as
much wireless data spectrum as they can. They see this as a way to protect their
future. Fair enough. But this is only solving the problem for a short while, and
only for them.
There
is also an industry-wide, long-term problem, which is growing and which we are
not preparing for. We need a solution for this wireless bandwidth issue, or we
will all be paying more, and the speed and amount of wireless data we can use
will be throttled back.
It's
like the right hand doesn't know what the left hand is doing. Carriers and
handset makers are advertising and marketing their new smartphones and apps and
attracting users. On the other hand, they are throttling back the amount
customers can actually use and the speed at which they can use it.
One
example: I heard Netflix (Nasdaq: NFLX) lets users download movies to their
phones, and that accounts for roughly one third of all Internet traffic, which
is an amazing figure. I expect Verizon to move into Netflix's space this year.
As we go forward, more wireless data will be used, not less.
To
solve this problem, AT&T tried to acquire T-Mobile to get its spectrum. That
failed. Next it grabbed Qualcomm (Nasdaq: QCOM) wireless data spectrum that was
going to be used for FloTV. At the same time, Verizon is acquiring cable
television wireless spectrum.
There
is a mad dash for every available band. These two wireless carriers are grabbing
as much spectrum as they can find. What about the other companies and their
customers? What about Sprint Nextel (NYSE: S), T-Mobile, C Spire, U.S. Cellular
and the others?
Every
carrier needs spectrum, not just AT&T and Verizon. The wireless data
industry is going through a revolution right now. When it started out, the
majority of usage was voice. Now the majority of usage is wireless data. And
that is growing so quickly that over the next few years, wireless data is
projected to account for roughly 97 percent of the usage. Voice will only
account for 3 percent.
That
is a complete reversal of the entire industry. As AT&T and Verizon see this,
they are struggling to grab as much wireless data spectrum as they can get their
hands on. Great short-term solution, but what about a long-term solution for
them and the entire industry?
How
will AT&T and Verizon solve the growing hunger for wireless data spectrum?
And
what about the other carriers? Currently they have spectrum, but without more
capacity, they may not be able to provide what the customer wants in years to
come.
That
means we may be looking at a potential future where only the big guys compete
for our wireless data needs. The other carriers may only have a limited role in
that growth.
That
is the serious problem we need to solve today. We need competition. Two
competitors are not enough. Two competitors mean prices will increase,
innovation will slow, and customer service will go down the drain. Why should
they care? Where else are we going to go? Think of the cable television industry
as an example.
We
have to make some decisions, now, as an industry and as a nation to solve this
problem.
A
decade ago, before this wireless data explosion, the U.S. government held a
spectrum auction and raised billions of dollars. However, as usage surges, that
model no longer works.
I
suggest pooling the spectrum together into one big pot. Let every competitor buy
access to this spectrum. That way, the owners would be compensated, the carriers
would have equal access, and the marketplace would be served and satisfied.
That
would turn this current problem into a solution, and that's what we need. What
about other ideas?
LightSquared
is a company that had a good idea. It wanted to offer wireless data capacity to
smaller carriers. Sounds great, except it is having serious problems with its
spectrum interfering with the GPS navigation industry. So that solution may not
come to pass. That is a shame.
What
about other ideas? Now is the time to hear them. Now is the time to debate and
decide on a solution and move forward. Whatever we decide will take years to
implement, and time is something we don't have in abundance.
So,
before we are all choked with slow connections, poor service and high prices,
now is the time to debate and decide. It's time to fix this before it affects
every company and every customer.
My
Pick of the Week is the coming Google privacy problem -- and a solution.
First
of all, Google has every right to change. This is America, after all. Even if it
does mean it will change everything and suddenly invade its users' privacy
against their will. Even if it does mean this behavior would have kept the
company from becoming the Google it is today.
However,
user resentment will grow. Not what Google wants. It is not bulletproof. So I
have a solution.
Instead
of forcing all of its users to do something they don't like, Google should offer
an opt-in or opt-out program instead.
The
number of users who opt in will be plenty for Google to work with. Users who
want no part of this can opt out and protect their privacy. Simple solution.
While
this does not answer all the questions for the future, it does protect users in
the short term, doesn't it?
So
what will Google do? Will it force users into this new box and risk ticking them
off? Or will it do this the right way?
We'll
have to watch and see.
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff
Kagan is a tech analyst and consultant who enjoys sharing his
colorful perspectives on the changing industry he's been watching for 25 years.
Email him at jeff@jeffKAGAN.com
--------------------------------------------------------------------------------
http://www.ecommercetimes.com/story/74275.html
OPINION
By
Jeff Kagan
E-Commerce
Times
01/26/12
5:00 AM PT
Industry
after industry is dipping its toes in this new cloud water. Just like the Web in
the 1990s, companies and customers are trying things and getting comfortable
with the opportunities and the challenges. Right now, it's the blind leading the
blind. Mistakes will be made, but now is the time when these mistakes are
expected and excused. So dive in and experiment, and get used to the new water.
We've
been hearing a lot about the cloud , but what is it exactly? Going forward, I
will be writing about different companies and ideas and the cloud, but here I'll
focus on this new area and how it will transform every company in every industry
over the next several years.
We
are starting to see companies like Apple (Nasdaq: AAPL), Amazon (Nasdaq: AMZN)
and Barnes & Noble (NYSE: BKS) enter this cloud-space for their customers.
This helps them lock in their customer base and grow. But the cloud has many
sides. It also helps companies better manage internal business operations and
more.
On
the consumer side, there are enormous opportunities to lead in this new cloud
space. Set the new rules going forward. There are also great opportunities to
follow. However, there are also challenges for companies that don't transform,
or that try but get it wrong.
My
Pick of the Week topic is how the mHealth App market will grow over the
next five years.
I
have had countless lunches and meetings with executives of companies wanting to
learn more about the cloud. They see the Wave coming and want to know how to
ride it to success going forward. They want to know how it will change their
business and what they can do to keep up on the consumer side, the business
customer side and the internal side.
First
of all, take a deep breath. It is important to realize we are just in the first
inning of this new cloud game. We have been talking about it for years, but only
recently have we seen companies dip their toes in the water, some more
aggressively than others.
The
cloud will transform the entire business environment for consumers, investors
and the companies themselves. The impact will be similar to the original PC
revolution. Remember when back in the 1980s every store had to call in the daily
sales figures? Nothing was computerized.
Today,
every cash register is actually a computer terminal, so every store can be
monitored continually and restocked automatically.
Also,
remember how Apple transformed the music industry with iTunes and the iPod?
We
should expect the same thing with the cloud. How do devices communicate with the
cloud? Wireless, of course. Networks like Verizon Wireless, AT&T (NYSE: T)
Mobility, Sprint Nextel (NYSE: S), C Spire, and more are the highways for this
next revolution.
Customers
connect with the cloud through their wireless and wireline Internet connections
with companies like Verizon, AT&T, Sprint Nextel, C Spire, Comcast (Nasdaq:
CMCSK), Time Warner (NYSE: TWX), Cox and so on.
There
are many benefits to the companies and the customers. It is a perfect way to
lock customers into a company, increasing sales and market share.
We
all prefer companies depending on good quality service, low prices and
innovation to hang onto customers, but the cloud is the path we are on. It will
transform the entire business marketplace, so it is vital we get comfortable and
either lead or follow going forward.
The
rules of this new industry view are still being written. Companies need to
decide whether they want to play a role in writing the rules, or just want to
play by the rules set up by other companies.
We
used to store our data on our hard drives. Most of us still do; however, we can
now store it in the cloud. Some people love this idea, because they can access
their data anytime on a variety of devices that can tap into their cloud
account.
Others
don't like it because the private information and files, which we used to store
on devices, is now stored on a network. The fear is these networks can be broken
into and information stolen. We hear about this all the time in the news.
This
is the transition period. As time passes, we'll get as used to this risk as we
are to banking and paying our bills with our online accounts instead of checks.
Apple
has the iCloud. It allows customers to store all their purchases, data and
computer files on Apple's Web-based computer system instead of on their devices.
Customers
who buy music or books can access them on any of their Apple devices linked to
the iCloud account. That means an Apple Macbook, iPod, iPhone, iPad and whatever
comes next will have access to all of a customer's cloud purchases. This also
means every time a customer saves a file, it gets saved to the cloud space, and
not to the customer's machine.
The
good news is customers can access their data on any Apple machine. The bad news
is it is vulnerable to attack and theft. Also, information cannot be accessed
without a connection to the Web, so using it while traveling, for example, can
be very difficult today.
These
difficulties will be solved as we move further into this cloud space. Apple
gives customers the choice to store information on their machines or in the
cloud, allowing for migration over the next several years.
Whether
customers like it or not, this is a brilliant marketing direction for a company
to follow. This will be the way we store and use information in the future. We
are just in the very early stages of this cloud revolution.
Amazon
is taking the same approach with its Kindle book reading devices and tablet
computers. All the purchases are kept in the cloud. Customers can download
anything to their device and read it even when they don't have a connection to
the Net. Or they can read it on a laptop, or a smartphone, etc.
In
fact, Amazon is going to be introducing a new smartphone later this year. If
successful, it will help Amazon become stickier, like Apple, and it will build
its marketing strength with customers. Whether this is successful or not depends
on how well Amazon markets it.
Barnes
& Noble is another company taking the same cloud approach with its Nook book
reading device. I don't think it is planning a smartphone release, which would
leave it in a weaker position than Amazon, but the B&N.com Nook is a great
device, just like the Kindle, and customers can read books on the Nook or on a
laptop or smartphone also.
These
are three good companies with different approaches to the cloud and how deeply
they are diving in. Which do you think will be most and least successful going
forward? I have my opinions. We'll have to watch and see.
At
CES in Las Vegas a couple weeks ago, the automotive industry also showed how it
will play a significant role in this cloud and app space. Companies like GM,
Lexus, Mercedes, BMW and others have been playing around with this cloud
opportunity, and the results have been paying off.
Customers
who would normally hang onto their vehicles for a longer time will trade up to
get the new tech. There was little reason before, but when they can get better
technology and more technology and have it tied to the cloud, it gives these
auto companies great results.
The
next step is allowing customers to upgrade and update existing automotive
technology. That will play a role going forward, so customers don't have to buy
a new vehicle just to get the new technology.
That
will keep these cars hot to trot. However, as with Apple's iPhone and iPad, some
new features require customers to purchase the next model.
Health
Apps are also playing a larger role as the mHealth and eHealth industry emerges.
Large and small companies are trying new ways to reach out to customers and
patients to empower them to have more control over their own healthcare.
Banking
and credit card industries are moving into this space. Customers can deposit
checks using a smartphone in their living room instead of driving to their bank.
They can get access to their accounts using an increasing number of apps
provided by banks. Many of these are coming from smaller banks, but increasingly
we are seeing larger banks dip their toes in the water.
Travel
is another industry letting customers access travel information and records from
the Web-based cloud.
Industry
after industry is dipping its toes in this new cloud water. Just like the Web in
the 1990s, companies and customers are trying things and getting comfortable
with the opportunities and the challenges.
Right
now, it's the blind leading the blind. Mistakes will be made, but now is the
time when these mistakes are expected and excused. So dive in and experiment,
and get used to the new water.
Over
the next several years, this cloud is going to expand to and transform every
industry to allow customers to save all their information. To help companies
attract sticky customers so they can grow. To help companies offer internal
cloud services for employees to teach and communicate internally and externally.
Be
aware. The cloud is an exciting area that is not just a flash in the pan. It is
the early stages of the next big revolution that will affect and impact every
company, every industry and every customer.
Getting it right -- or wrong -- will tell whether a company will be a leader, a follower or a loser going forward. This is a serious transformational trend going forward. Drop me a line now and then and let me know of companies that are doing well and others that are missing in this new area. Much more to come.
My
Pick of the Week topic is the mobile health app market, which will grow
to US$392 million over the next five years. That's a 70 percent increase,
according to Frost & Sullivan.
As
good as that sounds, I think it will be quite a bit more than that once we crack
the code on this new opportunity. Sectors that grow in the wireless arena tend
to blow past expectations once they get through the hard part.
Companies
in the wireless healthcare arena have been trying to crack the code for several
years. Qualcomm (Nasdaq: QCOM) is a big supporter in this area. It stands to
capitalize on the opportunity when it takes off. There are others as well.
Of
course, we shouldn't count our eggs before they're hatched. Traditionally, big
companies don't always know how to strike the right chord. Remember, the
wireless data sector was trying for many years. Companies like AT&T, Verizon
and Sprint Nextel tried again and again, but just could not jump-start this
sector.
Then,
five years ago Apple jumped in with the first iPhone and Google (Nasdaq: GOOG)
with Android. That is what changed the smartphone market. Before that, companies
like RIM were leading. Now its BlackBerry is struggling as the Wave passes it
by.
At
CES in Las Vegas a couple weeks ago, mobile app developers announced they would
create the Applications Developers Alliance. The Digital Media Association plays
a lead role in this alliance. The participants will be involved with testing,
working with app legislation, cloud services and more. This will be helpful, but
it alone will not crack the code.
Once
that happens, we can expect the mHealth app market to explode and rapidly grow.
The question remains, when will that happen? Can't say for sure, but we are on
the cusp. You can taste it, can't you?
-------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff
Kagan is a tech analyst and consultant who enjoys sharing his
colorful perspectives on the changing industry he's been watching for 25 years.
Email him at jeff@jeffKAGAN.com
-------------------------------------------------------------------------------
http://www.ecommercetimes.com/story/Exciting-Road-Ahead-for-Automotive-Tech-74216.html
http://www.ecommercetimes.com/story/74216.html
OPINION
By
Jeff Kagan
E-Commerce
Times
01/19/12
5:00 AM PT
Car
technology of the future is about surfing the Web and watching live television
and movies like you do at home -- on excellent quality automotive TV sets, with
monitors in the dashboard and in the back seat. It's about detailed weather and
traffic navigation. It's about tons of auto apps, an in-vehicle WiFi connection,
syncing with the cloud, and much more.
One
look around last week's Consumer Electronics Show was all it took to see the
automotive industry is really getting in-sync with the consumer electronics and
wireless worlds. There is enormous opportunity, but there is also quite a bit of
risk. Will these two industries work well together? Who and what will lead?
The
auto business has been ramping up with all sorts of new technology during the
last decade. Car gadgets are not just about stereo systems any longer. Today
they're about navigation, traffic, safety, wireless, television, weather and
more.
What
about tomorrow? General Motors (NYSE: GM), Ford Motor (NYSE: F), Daimler
Mercedes-Benz, Lexus, BMW and others are really starting to show off their
thinking, and it is clear the future of driving is changing. In fact, I think we
can expect to see more carmakers showing off their consumer technology every
year.
The
"cloud" is changing consumer electronics, and it will play a big role
in the automotive future. So will wireless, since that is how autos will
communicate with the cloud .
Cars
will self-diagnose and communicate with the manufacturer. Repairs and
adjustments will be made on the fly, without the need to drive to a repair shop.
Automakers
will offer vast new entertainment and information options for drivers and
passengers. This will be a big revenue opportunity for companies, as there will
be many levels of service to choose from at different price levels.
You
will get messages telling you it's time for an oil change, or there is a weather
warning ahead, or that your car has been recalled, so click here to schedule an
appointment, and so on.
These
things have been in the wind for quite a while, and year after year, more
technology has been put on the dashboard and under the hood.
Cars
will be aware of their surroundings to keep drivers in the right lane, on the
right road, and away from traffic jams.
It's
all about the give and take of data to and from car, driver and manufacturer, as
well as other companies and service providers involved in the automotive
experience.
Don't
expect self-driving cars -- at least, not for a few more years -- but believe it
or not, they are coming as well. They won't be everywhere, of course, but as
cities install sensors in the pavement, you will be surprised what will change.
Remember the self-parking Lexus from a few short years ago, as an example. Today
that feature is on other less-expensive brands as well.
All
this data and information creates it's own opportunities and problems. There are
quite a few cars on the road, and they will all be sending and receiving info
all the time. It's an IT logistical nightmare that we are not ready to handle
yet today. However that will change, and companies like OnStar are well
positioned.
Verizon
Wireless, AT&T (NYSE: T) Mobility, Sprint Nextel (NYSE: S), C Spire, and
many other wireless companies will be the wireless connection. Companies like
Alcatel-Lucent's (NYSE: ALU) emerging technology group, RIM, Google (Nasdaq:
GOOG), Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT) and many others want to
play a role in this new area going forward.
It's
a huge opportunity for developers, too -- individuals and companies. After all,
someone has to figure out how to turn this dream into a reality.
It's
about maintenance and entertainment and information delivered live and in new
ways right to your vehicle.
It's
about surfing the Web and watching live television and movies like you do at
home -- on excellent quality automotive TV sets, with monitors in the dashboard
and in the back seat. It's about detailed weather and traffic navigation. It's
about tons of auto apps -- like finding the movies showing at nearby theaters.
It's about an in-vehicle WiFi connection for your laptop or smartphone. It's
about keeping up with personal and business activities on your calendar, synced
to your laptop and smartphone over the "cloud." It's about keeping you
and your family occupied during long or short trips -- even during waits in
carpool lines -- and much more.
It's
all about wirelessly connecting cars, people and auto manufacturers through the
cloud. This is going to be an enormous opportunity for growth going forward.
Workers, companies and investors want to be a part of this. Then the government
will want to play a role and collect taxes as well.
This
is a huge opportunity. This is also a huge risk. Remember, this is just the
first inning, and the game is just getting started.
There
will be winners and losers. This is a perfect example of the next new Wave,
which I mention all the time here.
We
have already started down this path. Ford offers Sync technology and other
carmakers like Mercedes and Lexus are all wirelessly connected with their
first-generation services.
So
buckle up, because in the next two or three years, there will be many more
exciting things to talk about and to buy. They will start with some of the more
expensive brands and quickly work their way down to all cars.
I
look forward to telling you about all the new innovations and companies that are
here today and that are coming tomorrow. And to watching the Wave -- who will
lead, follow and lose. This is just the beginning of this very interesting and
very large story.
My
Pick of the Week is CenturyLink bringing its Prism IPTV to Qwest
territory.
If
you recall, CenturyLink rescued the dying Qwest in an acquisition about a year
ago. Qwest had not been successful either with its wireless or television
efforts. It had taken a different path from that taken by Verizon FiOS and
AT&T uVerse.
Hopefully,
CenturyLink will have better luck. Customers and investors are hoping so.
However,
don't expect it to happen quickly. The company is planning to start service in
one, maybe two Qwest markets in 2012, according to CenturyLink Executive VP
Stewart Ewing.
While
that is not blowing the doors off, at least it's a start in the right direction.
Success
depends on key areas like quality, pricing, marketing and competition. To start,
CenturyLink will compete against traditional cable television and satellite
services. Plus, Apple may jump into the television space later this year with
its iTV. Apple could transform the entire space, like it changed the music
industry with the iPod, wireless phones with the iPhone and tablet computers
with the iPad.
Apple's
entry is a big threat to the existing industry.
That
said, if CenturyLink can do a good job in the Qwest markets, this could be a
growth opportunity for the company.
So,
congratulations to CenturyLink and Qwest customers who are starving for this
service. And if you become a new CenturyLink customer, drop me a line and let me
know about your experiences with the new service.
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff
Kagan is a tech analyst and consultant who enjoys sharing his
colorful perspectives on the changing industry he's been watching for 25 years.
Email him at jeff@jeffKAGAN.com
http://www.ecommercetimes.com/story/Riding-the-Tumultuous-Retail-Waves-74158.html
http://www.ecommercetimes.com/story/74158.html
OPINION
By
Jeff Kagan
E-Commerce
Times
01/12/12
5:00 AM PT
One
thing that makes Amazon's model work is trust of the brand. Customers are taken
care of like gold. That brand relationship is what Amazon is building its future
on. Companies must protect and build their brand. If they don't, they eventually
lose, don't they? Sears, with its new push online, is a good example of what can
go wrong. I tried Sears, and it failed me.
The
retail space is changing. Twenty years ago we used to shop and buy in person at
retail stores. Ten years ago, the Internet started a change Wave. We could buy
online but were not ready yet. So we shopped online, but we still bought in
person at stores. Now we have reversed this trend completely. Today we shop in
retail stores to see and touch, but we buy online because prices are lower.
This
trend has reshaped the marketplace, and it is not done. Many companies could not
handle the shift. Large retailers like Borders and Circuit City (NYSE: CC) have
closed their doors forever. Others like Barnes & Noble (NYSE: BKS) and Best
Buy (NYSE: BBY), which we thought would be strengthened by less competition, are
still struggling with problems created by this shift.
At
the same time, Internet companies like Amazon.com (Nasdaq: AMZN) have exploded
with growth during the last 10 years. And as we see many of yesterday's retail
leaders like Sears fade, we also see them going online to try to claim victory
there.
Some
companies are successful. Others are complete failures. That's what I'll dig
into in this column.
My
Pick of the Week is something brand new that MetroPCS is doing with local
television on the wireless handset.
Over
the years, I have watched CEO Brian Dunn guide Best Buy through both good and
bad times. One thing about Dunn and Best Buy -- when there's a screwup, the
company takes responsibility and apologizes. Take the mistake made this holiday
season, for example. Believe it or not, talking with and staying close to
customers can even help companies that make a mistake to live through it -- and
even get stronger. Companies that don't take responsibility will lose, as I will
explain.
What's
funny is every time Best Buy hits a rough patch, the media writes the company
off -- this has happened time and time again. I find it laughable, but it hurts
the company when this happens. Sometimes more damage can be done by loose
keyboards than by real problems. Best Buy has challenges, for sure, but they are
an important part of the process.
Yes,
Best Buy has to update and ride its next Wave. It can be a success both in the
online world and the retail world if it can update the brand. It has begun. It
has smaller, specialty wireless phone stores in malls. This is exactly the kind
of thing it needs to do -- but much more. What is the next Wave for Best Buy?
Barnes
& Noble is remaking itself with its Nook e-reader and tablet line. This part
of the business is new and expensive for the company, but it is its next Wave.
It is a rapidly growing and vital part of its future. This comes with its own
challenges. B&N must learn to compete on the loud stage against companies
like Amazon and Apple (Nasdaq: AAPL).
B&N's
retail side is just as important for different reasons. The problem is it has
not updated the brand of the retail stores and their image in the marketplace.
They look the same as they did 10 years ago. In that respect, it is on the
downside of that Wave. What will it do to create the next Wave?
If
both Barnes & Noble and Best Buy can update their Waves and brands, they can
regain their strength and win. Will they?
Can
they? That is the big question. Their futures depend on it. While these first
efforts are good, they must continue, because these steps are not enough.
One
easy path for Barnes & Noble is to follow Amazon, now that it has Apple in
its sights. Amazon not only sells books online, but also tons of other things
both from its own shelves and from countless smaller firms that sell their
products on the Amazon.com site.
One
thing that makes Amazon's model work is trust of the brand. Customers are taken
care of like gold. Others do this successfully as well, like online clothing
retailer LL Bean or Zappos shoes. There are so many good operations that make
you feel special and taken care of. They make you feel comfortable -- even when
you're dealing with one of their partners and not them directly.
That's
where the power and magic of the brand comes into play. That brand relationship
is what Amazon is building its future on. Companies must protect and build their
brand. If they don't, they eventually lose, don't they?
Amazon
is also expanding to compete with Apple. Later this year, it will start selling
smartphones. So, it will offer books and merchandise, Kindles and smartphones,
and tie it all together under the cloud .
This
is brilliant. Successful. Profitable. Competitive.
Why
can't Barnes & Noble follow? It can. In fact, there are many other key areas
it could grow into. Will it? That is the question.
If
it does, they can compete and grow. If it doesn't, I am afraid it will decline.
Sticking to one segment -- like books, which worked through the 1990s -- may not
work any longer.
Sears,
with its new push online, is a good example of what can go wrong. It is a
longtime American brand. A historic company. You would think it would care about
its brand.
However
Sears retail stores are struggling. The company sees an opportunity in following
Amazon online. Its online store sells stuff from Sears and many smaller
businesses as well. I like Amazon -- so I tried Sears.
I
ordered a video game for my nephew in the middle of December. I was notified
that it was mailed the next day. Mailed -- not shipped? Well, OK. As long at it
would arrive in a few days.
It
never arrived. I sent several emails to both the selling company and Sears over
several weeks. The day before Christmas, I emailed them once again, asking where
it was.
Bottom
line: I never heard from the smaller company at all, and it's been almost a
month already. At least Sears would take care of me, right? I kept getting
excuses from Sears -- but no results.
Sears
kept saying it needed five days to hear from the vendor. I heard that excuse
several times over several weeks. So much for customer care.
Finally,
I gave up. I called American Express (NYSE: AXP) about my credit card purchase
and it took care of me. It took the charge off my account with a smile. That is
why I always use American Express -- I can count on its service. It's a company
that cares about its customers. That's why its customers care about American
Express. That's why it is successful.
As
for Sears, I finally just received a form letter by email signed by Imran Jooma,
SVP of e-commerce, saying the company was sorry it did not meet my needs and
that it had refunded my purchase price and hoped I would shop there again.
Sears
failed. This was a holiday gift, remember. I got no communications and no help.
Therefore, I can no longer trust Sears with my purchases. Obviously, if this is
the way it deals with customers, it will not survive.
Sears
does not understand -- like Amazon and Best Buy do -- that the primary key is to
keep the customer happy and to stay close in order to keep the customer. The
rest is just noise.
All
the money Sears spends on advertising and public relations gets customers in the
door or to log on. After that, it's all about the service -- and in my case,
Sears failed.
The
sad part is I don't even think the company realizes it. Without that
realization, Sears does not have a chance to succeed. Compare its service to the
world-class service of American Express, Amazon, Apple, Best Buy and Barnes
& Noble. The difference is stark.
There
are serious challenges as companies remake themselves. One thing is for sure --
some companies will succeed, and others will fail.
What
about your company? Are you hitting home runs with customers and winning against
competitors, or are you failing? I am sure you can give me plenty of examples as
well.
There
are plenty of companies on both sides. The writing is on the wall. The key
question is which side is your company on? And what are you doing about it?
My
Pick of the Week is something brand new that MetroPCS is doing
with local television on the wireless handset. Sure, carriers offer national TV
networks -- but no one offers local stations. Now MetroPCS is doing just that.
It
filled me in on its new Mobile Content Venture (MCV) -- a partnership between
MetroPCS, NBC, Fox and others --12 major broadcast groups.
Together,
they are developing a new national mobile digital television service by using
existing broadcast spectrum. That way, companies can deliver local TV to mobile
devices.
The
delivery method is different as well. Instead of sending the television signal
to your device over your wireless network, the new venture uses new technology
and an old-fashioned approach.
Remember
before cable television when we received a signal over the air? When we had an
antenna on the roof or on top of the television itself?
In
this case, local television stations install a new way to deliver their signal
for wireless devices and then simply broadcast. Next-generation wireless
handsets from Samsung have the ability to pick up these signals and show them on
screen.
The
first year or so will be free to the customer, so this is a great value.
Customers just have to purchase the new handset. After there's a large enough
customer base, MetroPCS will decide how to monetize the idea. It could sell
advertising, or it could charge the customer, but that decision is still down
the road.
In
this first stage, as long as you have the right handset, you can get free local
television -- and that is the good news.
This
service is not available in every market yet. Local television stations have to
upgrade the way they send their signals. This first year is a building time. You
can find out from MetroPCS if the new service is available in your area.
I
have not yet used this yet, but the idea sounds great. How successful will it
be? Good question. Depends on how well MetroPCS markets the service and how much
users really want to watch TV on their handsets. This is an interesting time in
wireless with all these new devices and innovations.
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff
Kagan is a tech analyst and consultant who enjoys sharing his
colorful perspectives on the changing industry he's been watching for 25 years.
Email him at jeff@jeffKAGAN.com
--------------------------------------------------------------------------------
http://www.ecommercetimes.com/story/CES-2012-The-End-of-an-Era-74107.html
http://www.ecommercetimes.com/story/74107.html
OPINION
By
Jeff Kagan
E-Commerce
Times
01/05/12
5:00 AM PT
I
have attended many of these shows, but to tell you the truth, I think it is much
better when companies' invite me to visit at their offices during a normal week
-- just them and me. We can both think and talk and get to know each other
better than in the midst of that craziness. CES has become like a family
wedding. You think you'll have the chance to catch up; however, the music is so
loud, you can't even have a normal conversation.
The
CES we have grown to love is ending. Not sure CES realizes it yet.
If
you are like me, you both love and hate this time of year. Love it because this
is the time of year when the Consumer Electronics Show comes to Las Vegas. Hate
it for the same reason. We haven't even recovered from the holiday season.
CES
may be the largest show of it's kind. It is still important, but the marketplace
is changing. Today, CES is more about the sizzle and less about the steak. The
Wave I often discuss is starting to pass it by.
Unless
the Consumer Electronics Association updates its Wave or creates a new one, the
show will start to unwind over the next few years. The long-term prospects for
CES will be my focus in this column.
Then,
in my Pick of the Week, I will discuss some key trends to watch for at
this year's show.
Too
Much Noise
As
an analyst, I have followed this consumer electronics craziness for many years.
I have watched the show grow over the years, and now, I have to say, it is
reaching its peak.
CES
is cresting on the Wave it has ridden to success over the last decade.
Think
of what's happening. This is like Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG)
-- the companies that created and are riding today's big Wave. It's like RIM and
Nokia (NYSE: NOK), being left behind as the Wave passes them. The marketplace
changes all the time. Knowing when to switch to the next Wave and how to ride it
are key.
I
have noticed a shift at CES over the last few years. And Microsoft (Nasdaq:
MSFT) just weighed in with its vote and said this will be its last year at the
show. That means neither Microsoft nor Apple will be there. They are two of the
more important brand names in consumer electronics. This is a significant shift.
Other companies will follow.
Over
the years, I have seen many companies and executives in Vegas during the show,
but not participating in the show. They were there because that's where so many
analysts and journalists converge. They have suites in hotels and invite us to
visit them. Very cost-effective.
One
reason for that approach: The show is expensive. Another reason: The show is so
busy, you can't hear yourself think.
As
I wander around, I get the chance to say hello to so many executives from so
many companies who are wandering around as well. These execs are not at a booth
in the show. They are just there, mixing and mingling and checking out what is
new and exciting. Trying to wrap their minds around the technology and
competition they can expect this year and next in the marketplace.
While
I have attended so many of these shows, to tell you the truth, I think it is
much better when they invite me to visit at their offices during a normal week
-- just them and me. We can both think and talk and get to know each other
better than in the midst of that craziness.
CES
has become like a family wedding. You think you'll have the chance to catch up;
however, the music is so loud, you can't even have a normal conversation.
Where's
the Next Wave?
Every
January, around 150,000 gather in the desert in what must be Las Vegas' busiest
week of their year.
Lines,
lines, lines, everywhere. Over the years, we have seen more industries have a
presence. I remember when AT&T (NYSE: T), Verizon and Sprint Nextel (NYSE:
S) started participating several years ago.
So
why is everyone there? And why is CES becoming less important going forward?
Several
years ago, the reasons to be there were clear, and companies and attendees kept
coming in droves. Today, it is different. The show seems to have peaked in
growth. Plus Microsoft sees no value there any longer.
With
that said, what is next for CES?
I
think CES is cresting at the top of its Wave. The show had been growing over all
these years, but I think this year will be the last we consider a growth year,
unless it's reinvented. Re-branded. Unless it finds or creates the next Wave to
ride.
Keep
your eyes on CES for what happens next. This is an important show. But so many
important companies are now failing, aren't' they? It happens. CES can still be
OK, assuming it can create and ride the next Wave. Will it grow or shrink going
forward?
That
is the question we are all interested in. But today, it's time to get ready for
this years CES!
For
my Pick of the Week, I'll take a look at some of the key trends we can
expect to see at this year's show. And there are plenty.
Television:
Television is transforming itself and blending with other technologies.
Companies that lead today may not tomorrow. That means television manufacturers,
as well as new and existing television service providers.
Yesterday,
TV was just something to watch. Today, we can surf the Web, play games with
others over the Internet, and watch movies we just downloaded on our TV.
Cable
television providers like Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX) and
Cox, as well as satellite providers like Dish and DirectTV, plus telephone
company IPTV services like Verizon's FiOS and AT&T's uVerse offer hundreds
of digital channels and networks.
We
have not seen Sprint Nextel, CenturyLink or Windstream enter this space, except
to resell satellite television. Will that change as the Wave continues to
reshape the marketplace?
These
industry-reshaping changes threaten traditional providers like cable television
companies and phone companies. Expect the Internet and wireless to play together
in new ways as a "change agent" transforming television going forward.
Think
of how the iPod changed the way we listen to music. The iPhone changed
smartphones and the iPad changed computers. Now, I expect Apple to change the
way we watch TV. Will it introduce iTV? Apple is one of the key players in
creating the next Wave.
Apple
wants to rewrite the rules of television the same way it re-invented these other
industries. It wants to create the next Wave in television.
This
will, of course, be great for Apple -- and for other innovative companies.
However, many existing companies will be hurt. Which will be the winners and
losers over the next couple years?
It
all depends on catching this next Wave. Many execs and companies are prepared.
However, many others don't have a clue.
Another
major transformation will be with Netflix (Nasdaq: NFLX). It changed the way we
watch television and use the Internet together. You download movies and watch
them on your television or laptop. In fact, this single company accounts for
roughly one-third of all Internet traffic, which is an incredible stat.
Now
Verizon is jumping in. It has not announced anything yet. Will it make a splash
at CES? It may even be interested in acquiring Netflix if the price is low
enough.
Watch
Netflix closely, because it has crested on its Wave and may now go the way of
AOL, Prodigy and Compuserve from the 1990s. Remember, those companies rode the
first Internet Wave, but then wiped out when the phone companies and cable
television companies took their place.
Real
innovative change does not come from behemoths like Verizon or AT&T anyway.
Instead, it comes from smaller firms that develop a new idea then attract
attention of the big guys.
There
will be lots of new winners and losers in 2012. Keep your eyes open.
Wireless:
Every few years, the wireless industry completely reinvents itself. Four years
ago, the smartphone craze began with the iPhone. Next it was Android. Today,
past leaders like Nokia and RIM are now struggling, while new brands like
Google, Apple, HTC, Samsung and more are growing very rapidly and changing the
landscape.
Wireless
continues to transform. New smartphones from Google and Microsoft will be
introduced this year. This is a brand new category for them. Microsoft is
partnering with Nokia, and Google with Motorola. They both tried and failed over
the last several years. This time, will they succeed?
Expect
smartphones to get, well, smarter. Get this -- we can expect wireless data usage
to continue to explode so rapidly it will account for 97 percent of network
capacity in the next couple years. That means only 3 percent will be voice.
That
is a complete turnaround over just a few short years ago, when usage was mostly
voice.
Computers:
Computers are going through an amazing transformation. Ultrabooks and tablets
rule this year.
Ultrabooks
are a brand new category. This is the same idea as the very successful Apple
MacBook Air but is Windows-based. They are light and thin and powerful. I am
playing with a few of them, and I can say that I am very impressed so far.
Acer,
Asus, Toshiba and Samsung are competing now. Others will follow. This will be an
Ultrabook year. Expect to see dozens of new Ultrabooks introduced at this year's
CES.
Intel
(Nasdaq: INTC) and AMD (NYSE: AMD) are smiling.
Tablet
computers are still hot. Apple started this craze almost two years ago -- then
everyone else seemed to join in. Some are doing strong business, while others --
like RIM's PlayBook -- are failing before our eyes.
What
can we expect from this two-year-old category? The entire segment may look
completely different one year from today.
Amazon
(Nasdaq: AMZN) has jumped in with its Kindle Fire and Barnes & Noble (NYSE:
BKS) with its Nook. Expect a Google tablet to join the fray this year.
Companies
should expand their brands and technologies into these new areas. This is the
time, as the new marketplace is forming in people's minds. Now is the time to
evolve brands.
Now
is the time to stake out claims. It will be much tougher in a year or two, when
everything is set in customers' and investors' minds.
Companies
like Apple may create a new Wave, but many other companies can jump on and ride
it to success if they are smart about the use of their technologies and their
brands.
Apps
for smartphones and tablets will play an even larger role. 2011 was incredible.
2012 will be even better.
Keep
your eye on this computer and software space. It will be important this year as
the industry continues to transforms itself.
The
Cloud, Software and Apps: The cloud is
one of the newest and most exciting ideas. You no longer need to buy software on
disks and update it continually. It is all done automatically in the cloud.
Plus,
you don't have to worry about losing your data because it's stored in the cloud.
And
you can now access your data on a variety of devices in the cloud. You can even
work on your files from someone else's machine.
Instead
of movies and books on tape or CDs or anything else cluttering up the
bookshelves in your home, you will have access to all your purchases, anytime,
using any technology, in the cloud.
Sure,
you don't have the covers to look at up on your shelves, but then you can access
everything you own, anytime and anyplace. That tradeoff sounds pretty darn good,
doesn't it?
The
cloud should be on your radar. Its one key Wave of the future.
Lines
at CES: Any way you shake it, CES is still the place to be in the consumer
electronics world this year.
Countless
categories in every corner of consumer electronics make this one of the most
interesting and exciting and utterly confusing shows of the year.
The
big problem -- lines. The moment you step off the plane you wait in line for a
cab, then wait to check in to your room, then wait to get another cab or bus,
and every other thing you want to do -- lines, lines, lines. Even when you take
one of the gazillion limos, you are stuck in long lines.
But
this is Las Vegas, so have fun! It's the good and bad part all mixed up into
one, big show. Now pardon me, I have to finish packing. Dear... where is the
bucket of quarters? What? This is Vegas, baby!
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff Kagan is a tech analyst and consultant who enjoys sharing
his colorful perspectives on the changing industry he's been watching for 25
years. Email him at jeff@jeffKAGAN.com.
--------------------------------------------------------------------------------
http://www.ecommercetimes.com/story/ATT-May-Have-to-Eat-Verizons-Dust-in-2012-74065.html
http://www.ecommercetimes.com/story/74065.html
OPINION
By
Jeff Kagan
E-Commerce
Times
12/29/11
5:00 AM PT
Could Verizon pull ahead of AT&T this year? Yes it could. Of course, AT&T does its best when it is under pressure. And suddenly, it is under pressure. So it may struggle and fight and come back this year. Don't count AT&T out. A dry spell is not the end. This has happened several times in the past. However, things are rocky now, and will be for at least a while.
Lately,
I have been asked by reporters to compare AT&T (NYSE: T) and Verizon and
predict what 2012 will look like for them and their competitors. At this point,
all I can say is it's happy holidays at Verizon, but not so much at AT&T.
What a difference a year makes.
These
two companies led the changes in the wireless industry over the last decade.
They looked similar, grew rapidly, and have shared the No. 1 and 2 positions.
However, something new is starting to happen. These companies could soon be on
different tracks.
A
year ago, AT&T Mobility was the only U.S. carrier to offer Apple's iPhone.
Today, there are four. Almost a year ago, AT&T announced its intention to
acquire T-Mobile and grab wireless spectrum. Now that deal is dead. Everything
has completely flip-flopped.
So
what is next?
It's
all about spectrum and innovation. These are the two keys to long-term success
-- and not just for AT&T and Verizon, but for all the other wireless
competitors as well, large and small.
Wireless
spectrum is like the lanes on the wireless superhighway. I live in Atlanta, one
of the busiest areas in the country. When the highways get clogged, traffic
slows. So the city paves more lanes -- expands the highway. That lets traffic
flow once again -- until it gets clogged once again through more growth. The
government is thinking up creative ways to improve traffic flow with all sorts
of ideas. Some work. Some don't.
The
same thing is happening in wireless. Think of spectrum as the lanes. When
carriers sell to more customers and they use more services, they clog the lanes
-- use up all the spectrum capacity.
One
way to improve the situation is to add more lanes. Companies can do that by
acquiring other companies and their spectrum. That's what AT&T tried to do
with T-Mobile. Another way is to just acquire spectrum like Verizon did from the
cable television industry.
Next
is to think of new ways to squeeze more traffic onto existing highways.
In
recent weeks, Verizon announced it is acquiring the spectrum of the failed cable
television excursion into wireless. This is an easy way for it to get more
spectrum.
After
struggling for months to acquire T-Mobile, AT&T finally threw in the towel
and instead announced it is acquiring the spectrum from the failed Qualcomm FLO
TV. This will be a quicker and easier solution. In addition, it can share
spectrum through a deal discussed with T-Mobile.
At
this point in the industry maturation and development, this is the best way for
these top carriers to acquire more spectrum and quickly expand their lanes on
their wireless superhighways. And there is still more spectrum out there to be
acquired. So expect more of these deals, not mergers.
This
is also critical for every other competitor like Sprint Nextel, T-Mobile, C
Spire and others. The wireless world is rapidly changing. Super smartphones like
Androids and iPhones are squeezing the networks dry. We must act now to protect
every carrier and every customer and make this ground fertile once again.
Looking
at all of this, it seems Verizon is running this race without being exhausted
like AT&T is.
One
example is a Netflix-type service. Netflix is a young company that has grown
very rapidly. In fact, it accounts for roughly one-third of all Internet traffic
in the United States, which is incredible.
Verizon
sees this as a great new opportunity, and it may be right. Expect it to start
offering a service in 2012. Of course, it may end up acquiring Netflix itself.
This
sounds similar to what happened 10 years ago. Remember Internet service
providers like AOL, EarthLink, CompuServe and Prodigy? They led through the
1990s until the Baby Bells and cable television companies started offering
high-speed connections to the Net. Now the Baby Bells and cable TV companies
dominate that space.
Today
these competitors, if they still exist, are much smaller than ever. They are
still good quality providers, but the growing wave of opportunity passed them
by. They were unable to create the next wave.
This
is what we may be starting to see here. If Verizon is successful, will AT&T
follow? It would love to, once it catches its balance again. However, AT&T
is off balance right now, bent over and breathing hard.
This
is why I think Verizon is rockin' and rollin', while AT&T is struggling to
regain its footing.
Verizon
Ahead of AT&T in 2012
So,
could Verizon pull ahead of AT&T this year? Yes it could. Of course,
AT&T does its best when it is under pressure. And suddenly, it is under
pressure. So it may struggle and fight and come back this year.
Remember
in the late 1990s when SBC tried to acquire AT&T and Reed Hundt, the
chairman of the FCC, said it was "UNTHINKABLE"? Yet less than a decade
later, SBC did acquire AT&T -- and BellSouth and Cingular -- and the race
was on. The smallest Baby Bell had become the largest, seemingly overnight.
Don't
count AT&T out. A dry spell is not the end. This has happened several times
in the past. However, things are rocky now, and will be for at least a while.
So
what will 2012 look like for AT&T and Verizon and the other competitors with
regard to spectrum shortages, industry-wide solutions to this growing problem,
and innovation?
There
are quite a few challenges ahead. We must come up with solutions that benefit
all competitors, not just AT&T and Verizon.
Perhaps
at the Consumer Electronics Show coming to Las Vegas in January, we'll get some
ideas.
Yikes!
CES is coming. This should be a very exciting show, with Apple iTV and Amazon
smartphones, and all the rest of whatever is coming next.
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff Kagan is a tech analyst and consultant who enjoys sharing
his colorful perspectives on the changing industry he's been watching for 25
years. Email him at jeff@jeffKAGAN.com.
--------------------------------------------------------------------------------
OPINION
Tech
Trends in 2012: What's Hot, What's Not?
By
Jeff Kagan
E-Commerce
Times
12/22/11
5:00 AM PT
2012 will be another exciting year in tech, wireless and telecom. A year with plenty of ups and down, good news and bad news, and plenty of wins and losses on the Wave. Public relations and advertising are growing in importance again as companies try to get attention and business in a crowded market for customers and investors. Expect big wins and big losses and lots of new ideas.
Last
week, I focused on companies to keep our eyes on in 2012. This week, I'll share
my views on different technologies and their place on the Wave. Remember, some
are growing and others are falling. There are key differences for investors,
customers and workers.
2012
is all about togetherness. Companies will be trying to lock in customers by
getting them to use multiple services and products that work together. Apple (Nasdaq:
AAPL) is an example, with its many devices and its cloud. This approach locks in
Apple customers. This is what the company will be promoting heavily going
forward.
The
industry will see many new innovations this year -- like Verizon offering
Netflix-type television services and Amazon (Nasdaq: AMZN) selling its first
smartphone along with its Kindle.
There
are plenty of upsides and downsides ahead. Some companies will continue to grow
while others will fail. The Wave can be a beautiful thing, but only for those on
the growth side. Otherwise, it can be a pretty rough part of town. And each
opportunity rides the same Wave up, then down again over time.
The
last couple of years have seen many new segments take shape. Just think of Apple
and Google (Nasdaq: GOOG) entering the smartphone space. They are transforming
it. And this segment is only four short years old. Five years ago, no one ever
heard the words "iPhone" or "Android."
Public
relations and advertising are growing in importance again as companies try to
get attention and business in a crowded market for customers and investors.
Expect big wins and big losses and lots of new ideas.
So
much will happen in 2012. Let's take a look at some of what we can expect.
Smartphones
will continue to grow. New areas of strength will grow. There will be plenty of
advertising, marketing and press
reports about it. There will be a renewed interest in trying to attract plain
old cellphone users with entry-level smartphones. Some companies and
technologies will do well, while others will struggle. New entrants in this
space will include devices from Amazon and Nokia-Microsoft.
Tablet
computers, which are
hot right now, will continue to grow, but things will start to change as the
segment matures. Parts of it will stay hot -- like the Apple iPad and
Android-powered tablets -- and other parts will cool, like the RIM PlayBook.
Traditional
wireless handsets
seemed to be going away over the last few years, but while they are not growing,
they are remaining strong. However, basic, first-level smartphones will start to
take the place of these ordinary handsets.
Voice
on wireless will
shrink and data will grow. In the next three years, voice will only account for
about 3 percent of network usage. The vast majority of usage will be wireless
data. Brace yourselves. Only the top carriers like Verizon Wireless and AT&T
(NYSE: T) Mobility are heavy-duty players in the spectrum battle. And AT&T
has its troubles. A healthy industry tomorrow means wireless data needs to
spread to many competitors. We aren't even close yet.
Advertising
on smartphones and tablet computers
will explode next year. That's if marketers can crack the code. This is a brand
new area. This is the very early stage. Google has the lead now. Apple is
struggling trying to understand the opportunity. So are others. This is on the
early part of a growing Wave.
Amazon's
Kindle and Barnes & Noble's Nook
will continue to grow, change and expand in this new sector, which is brand new
and increasingly competing with Apple's iPad. The big competitors will be the
iPad, a variety of Android tablets, Amazon's Kindle and Barnes & Noble's
(NYSE: BKS) Nook.
Amazon's
Kindle will outsell Barnes & Noble's Nook and
get more media attention, but both will grow strong. Much of the difference has
to do with Amazon's great understanding of public relations. B&N is not as
robust. However, I have used both and think they are very innovative devices
offering strong competition in the reader and tablet market.
Amazon
will offer smartphones
in 2012 and compete head-to-head with Apple's iPhone. This will be a new Wave
for Amazon. Another WOW moment for the company.
AT&T
Mobility will partner with T-Mobile
and resell its spectrum, now that its acquisition plan has failed. However,
AT&T won't completely give up on the merger. It will just be on the back
burner for a while until it thinks the timing is right to try again. Just like
SBC eventually acquired AT&T several years after the first attempt.
T-Mobile
will use the $3 billion cash and $1 billion in spectrum it gained from the
failed AT&T merger to build out its own wireless data capacity. It will
likely share spectrum with AT&T. Next, will it be acquired by Sprint Nextel
(NYSE: S) or another smaller company?
Verizon
Wireless got its
hands on all the cable television wireless spectrum. This will be a big help for
it going forward.
Spectrum
shortage will get worse.
The debate for solutions will get louder. LightSquared offers one solution if it
can solve its GPS problems. Another solution is pooling spectrum together and
letting every carrier have access to it. Of course, Verizon no longer needs
spectrum now that it has acquired the cable television spectrum. Other ideas
will be introduced and kicked around, because this is a real problem for most
wireless networks.
Research
In Motion is failing.
It will make another bold attempt to recover. Whether it will succeed is the
question. Hopefully it will. Will it be acquired? It is struggling on the
downside of the Wave. It reminds me of grandparents. You know them and you love
them, but they are getting older.
Netflix
is suddenly on the downside of the Wave and in crisis mode. Netflix-type
opportunities will spread to companies like Verizon. We saw this happen with the
ISP industry. AOL, Prodigy and Earthlink led it until the Baby Bells and cable
television companies started offering Internet connectivity. Of course, Verizon
could acquire Netflix (Nasdaq: NFLX).
Apple
will lose some of its luster. It will be less hot, though still important in
2012. Competition with others -- like Google, Amazon and Barnes & Noble --
will take a toll. It is about to attempt an iPhone- and iPad-like transformation
of the cable television industry. Is it cresting on the Wave or is it still
growing?
Mergers
will continue, as
always. Some will still be easy, while larger mergers will have a tougher time
getting approval. Think of the problem AT&T and T-Mobile had.
Google
and Microsoft will
launch their own branded wireless phones with Motorola and Nokia (NYSE: NOK).
Will they be successful? Wireless is a tricky business. Remember, Cox, Comcast (Nasdaq:
CMCSK) and Time Warner (NYSE: TWX) all tried and failed.
Social
sites like Facebook,
LinkedIn, Twitter and many others continue to grow. Who is next?
Deal
sites like GroupOn
and LivingSocial have become overnight successes. Are they a flash in the pan,
or will they have a long life?
Bargains
on deal sites will get even juicier over the next six to 12 months. They all
want to be No. 1 as the industry goes though the next transition. That means
prices will be lower and juicier to catch customers' attention, but only for a
while.
Auction
deal sites seem to
be hot, but I wonder if they are a short-term flash. Will they still be popular
this time next year or not? They take lots of time to use, but you can sometimes
get a great deal.
Wireless
Health and mHealth
will keep trying to make inroads with wireless service providers. Devices will
continue to WOW but make little movement onto networks until carriers understand
how to make money. These companies have not really scratched the surface yet.
Wireless
will start to expand into other industries. Examples are helping utility
companies get readings from customer homes and offices wirelessly, or helping
the automotive industry give Internet connectivity from the dashboard.
Prepaid
wireless continues
strong growth, cutting more into the post-paid wireless world. Think companies
like TracFone.
Loyalty
programs will start
to get popular. So will products that work together on the cloud. These are new
trends. Think companies like C Spire with their Percs program and Apple with its
cloud.
5G will enter the wireless discussion as 4G rapidly
rolls out across the U.S. Which company will be first? Don't worry; there will
be no 5G handsets or advertising for a while. Thank goodness. We are still
trying to get 4G in most places.
Disaster
will occur somewhere in the industry. Some company or sector will have a very
rough time this year. It always happens.
So
what else can we expect? Plenty. There is so much more that will happen in 2012.
This
list is just a way to get your juices flowing. It will be another exciting year
in tech, wireless and telecom. A year with plenty of ups and down, good news and
bad news, and plenty of wins and losses on the Wave.
So
get ready. 2012 will be a helluva year. The game is about to begin. Batter up!
My
Pick of the Week is a brand new category of computers called "ultrabooks."
Think of Apple's thin MacBook Air -- but on Windows.
These
are a hit with Apple users, so there is no reason they shouldn't be just as
popular with the Windows crowd, as long as they run well.
I
have not used them yet, but from what I have seen, they have a full-size
keyboard but are light and thin -- very easy to carry around.
Personally,
I had a problem with the little netbooks. The screens and keyboards were small
and uncomfortable. These ultrabooks seem like just the right mix of portability,
power and usability.
This
new ultrabook sector started with the Acer Aspire and Asus Zenbook, but now
Lenovo is entering the space. I hear Toshiba and Samsung are getting ready to
launch as well.
With
all these computer makers, I expect to see this new category really take off in
2012.
These
are quick. Open them and they wake up in seconds. Start from scratch, and they
are up and running in 30-60 seconds. That's quick. Their size means they don't
have features like a CD Rom or DVD player.
It
looks like we're about to see a home run in the next few quarters. It all
depends on the usability of the product and a successful marketing campaign.
I'll
let you know more when I have tested them, but so far they look great.
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff Kagan is a tech analyst and consultant who enjoys sharing
his colorful perspectives on the changing industry he's been watching for 25
years. Email him at jeff@jeffKAGAN.com.
--------------------------------------------------------------------------------
http://www.ecommercetimes.com/story/Tech-Companies-in-2012-Whos-Hot-Whos-Not-73976.html
http://www.ecommercetimes.com/story/73976.html
OPINION
Tech
Companies in 2012: Who's Hot, Who's Not?
By
Jeff Kagan
E-Commerce
Times
12/15/11
5:00 AM PT
Our tech, wireless and telecom industries remain as strong and vibrant as ever. However, all companies are not on the same path. Some are on the growing side of the Wave while others are on the falling side. Knowing the difference is vital if you are an investor, worker, competitor or regulator.
Over
the last 25 years, I have had a ball as a tech analyst following who is hot and
who is not and what is next. I look at companies and technologies. There was
plenty to follow in 2011. What about 2012? Believe it or not, it may be even
busier with winners and losers.
At
the end of every year, I look around the industry and try to call the winners
and losers and predict what is coming next. Remember when I discussed the Wave
in past columns? It's when companies or their technologies are either on their
way up or down the other side of the Wave.
An
example: A few short years ago, when RIM's BlackBerry was still hot, I predicted
in a speech and later wrote that the company was heading for trouble. That Apple
and Google were transforming the smartphone space. That this would impact RIM.
After my speech, I was taken aside by several people who thought I was nuts. But
today we all see the problems RIM is having.
So
what do we have to look forward to in 2012? Once again, it will be a
transformational year in the tech, telecom and wireless industries. There are
thousands of companies. Some are going up, and some are coming down the other
side of the Wave. Plus, there may always be new companies and ideas that will
pop up.
Companies
can actually be hot and cool. Hot as a technology and cool as an investment, or
vice versa -- or both can be hot or both cold. So there are four different
positions that companies can find themselves in.
This
week, I'll look at companies. Next week, I will look at technologies.
If
you think there is a company that should be on this list, drop me an email.
Perhaps I will keep my eyes open for it in the coming year.
Here
we go...
Apple
has seen incredible growth; however, it is going to slow down. It has
transformed industries and created new sectors. Now that Steve Jobs has passed,
this will be a transitional year. Apple will remain a top-tier company like
Google, but it will also see struggles. Superman may have lost his superpowers.
Google
continues to grow rapidly and transform many different spaces. Expect increased
pushback from the government in 2012. Investors love the company. So do many
users and customers. Many, however, feel uncomfortable by issues like the loss
of privacy. Expect continued growth with Android and now with Motorola.
Facebook
is one of today's phenoms. While customers continue to sign up in record
numbers, privacy concerns will play more of a role. Like Google, expect more
government and user pushback in 2012, although the company continues to grow
rapidly.
Amazon.com
started as a simple online bookseller,
but has transformed itself into an incredibly large and successful marketplace
of quite a few different online retail categories. It makes nothing. It sells
everything. Kindle devices will help it continue to grow rapidly. It will
compete more directly with Apple. This new battle space will be interesting to
follow. Will Jeff Bezos replace Steve Jobs as the industry point person?
Barnes
& Noble will
compete more directly with Amazon.com. The traditional book selling business is
crashing and burning. Just look at Borders disappearing. However, B&N is
rushing into the new book world with its Nook. This could be very successful if
it's marketed correctly.
Verizon
is a traditional phone company that's moving beyond the telephone. The
traditional phone business is shrinking. Other areas like wireless, television
and the Internet are growing. Verizon is also moving into new business
opportunities -- like offering a Netflix-type service. In fact, it may acquire
the suddenly failing Netflix. The acquisition of spectrum from the cable
television industry will help it avoid the same problems AT&T deals with.
Traditional growth will slow. Will it make up for it on new Waves of growth?
AT&T
is not the AT&T you remember. It is SBC from Texas, which acquired AT&T
and took the name several years ago. That said, it is strong and important. It
is doing well for investors. Customers, on the other hand, really don't like it
very much. In fact, Consumer Reports just released its latest customer
satisfaction survey last week and ranked AT&T the worst carrier in
the U.S. -- again. This is several years in a row. It is also trying to acquire
T-Mobile to get more spectrum, a move that the U.S. government opposes. Like
Verizon. traditional growth will slow. Will Verizon create new Waves of growth?
No signs yet, but I expect it will. I expect both quality problems and growth to
continue.
Sprint
Nextel has had
plenty of ups and downs. Five years ago, this third place wireless carrier was
crashing and burning. Then it found a new CEO and has been recovering ever
since. Now it is struggling again. It was the wireless carrier for companies
like Qwest and the cable television industry, which looked promising, but it has
lost them all. Customers are happier, but investors are concerned. 2012 looks
like a rough year for Sprint unless it turns things around.
T-Mobile
got a late start to the wireless data party and found itself falling behind. It
has struggled over the past couple of years to catch up. It has a happy customer
base who like the lower prices. AT&T is trying to acquire T-Mobile, but the
government is getting in the way. If the companies do merge, existing T-Mobile
customers may flee. If they do not merge, then AT&T gives T-Mobile US$3
billion in cash and $1 billion in spectrum. Not a bad way to get the cash and
spectrum it needs to build its network into a real competitive force. Stay
tuned.
C
Spire is changing
and expanding. This regional wireless player the fourth company to offer the
Apple iPhone. It is taking a different path with customers. Building customer
connections with a loyalty program called "Percs." It changed its name
from Cellular South and is actively reinventing itself. So far, things look
good.
U.S.
Cellular, another
strong regional player, was offered the iPhone too, but said no thank you. It
has been growing but has hit a rough patch lately. It remains to be seen whether
it can turn things around. It has good quality and happy customers.
MetroPCS
has its own network and has been building over the last several years. Its
customers love to pay less.
TracFone
is perhaps the
lowest-priced national wireless phone service in the market. It also offers
other brands like Straight Talk. Its resells networks like AT&T and Verizon.
It offers a good-quality service. However, the phone numbers it assigns are
often recent disconnects, and new users get lots of calls from collectors
looking for old users. This is a big waste of customer minutes and must be
solved.
RIM
is going from hero to zero. I predicted this problem was coming a few years ago.
RIM's BlackBerry was king of the smartphone world until Apple and Google
transformed the segment. Now RIM is struggling. Its new tablet has been a
failure. This is a good company, with good people and good technology, but it is
like dear old grandpa. Can it recover?
Motorola
fell off the fast track in the 1990s, and Nokia took over as No. 1. Things were
rough, but the last couple years have been better with the debut of the Droid
phones. Perhaps getting together with Google will work. We'll see.
Nokia
took the same path as Motorola, but a decade later. It led through the last
decade, but when Apple and Google transformed the smartphone space a few years
ago, it lost its way as well. The Nokia brand is strong in cellphones, but not
smartphones. Now it is partnering with Microsoft, and the first new smartphone
handsets are just hitting the market. We'll see.
Samsung
has been trying to carve out a niche in the smartphone segment over the last
several years. It has been successful so far, but not to the same degree as
Apple and Google.
HP is in transformation. Under new CEO Meg Whitman, the
company will look completely different and hopefully be much more successful.
This is a work in progress. No guarantees. Its board of directors makes being a
CEO tough work.
Lenovo
acquired Thinkpad from IBM and has been growing strong ever since. However, I
have purchased two Thinkpads within the last couple years and have had different
problems with each. Problems are a first. When I switch back to older IBM
Thinkpads, things are still fine. I contacted Lenovo for help and got none. I am
hearing similar stories from others as well. Strong company for investors for
now. Some customers like it, while others don't. I'll keep my eyes on it going
forward. Would not like to see it take the same path as Dell.
Netflix
has been a very innovative young company leading the charge to change the way we
enjoy our television and movies. It was going strong until several months ago,
when it goofed. It split services and raised prices too high and didn't
communicate well with users. The backlash was immense and long term. It has not
recovered. The segment is getting ready to transition as well. Companies like
Verizon are getting into the business. In fact, Verizon could acquire Netflix.
Otherwise, I see it continuing to fall.
Kodak,
one of America's best-known and loved brands, is collapsing. It missed the big
transformation of the photography business. It should be providing the cameras
on every smartphone. It is now trying the computer printer business but is
struggling. No brand name in that area. Will Kodak survive? If not, it would be
a tragic loss.
Microsoft
is a wildly successful and strong brand and company. However, it struggles
outside its core business. Example: It has been trying to make a dent in the
wireless phone business for 10 years without success. Perhaps now that it is
partnering with Nokia, it can finally make a dent in the business. No
guarantees. I'll keep my eyes on it.
Comcast
has grown into the largest cable television provider over the last decade. It is
also rapidly growing into the network television space with NBC, CNBC and MSNBC.
It has failed in its attempts at wireless. It is now selling its wireless data
spectrum to Verizon. May give Comcast another shot at wireless. This company has
generally happy investors and unhappy customers. Growth has slowed. It will be
interesting to see what 2012 brings.
Cox
is a strong but quiet cable television company. Its customers love it. Investors
did, but may be cooling. Cox recently pulled the plug on its own bold wireless
initiative. Why can't cable television companies make a dent in wireless? Good
people running the business, but how will Cox grow in 2012? I will be watching
for an answer to that question.
Qualcomm
will grow. Period.
Clearwire
had an innovative idea but has stumbled. Will it survive long term? Sprint
Nextel still needs it today, but as it builds out its 4G network, what will
happen to it?
CenturyLink
is now the No. 3 Baby Bell after acquiring Qwest. It has grown well during
recent years. However, it is not as advanced as its larger competitors. It is
only playing with wireless and television right now. Will it continue doing well
now that it is suddenly a much larger and potentially much different company?
Windstream
is the fourth-largest local phone company after CenturyLink. It has been on a
successful growth track. It makes acquisitions that keep propelling it forward.
It is strong in the business side. It does not have a wireless component. Will
it? This growth track will continue as long as it keeps acquiring. What then?
Earthlink
was one of the top Internet service providers in the 1990s, like AOL and
Prodigy, but as cable television and telephone companies started selling
Internet access, much of its growth and business evaporated. It has survived,
but it's much smaller. It will likely continue as is.
Vonage,
a startup that created lots of angst several years ago, is still around and
seems more stable today. Not as profitable as we expected, but it is a smaller
player in the market and will continue to stay that way.
Carbonite
is a company that helps you hang on to your computer data in case you lose it. A
backup company that continues to grow strong. I like the ease and simplicity. I
also tested MOZY, a competitor, which is also a good service but not as easy to
use. Growth for both continues.
LightSquared
is a brand new company, still in the building stage. It wants to offer smaller
wireless companies the ability to offer high-speed wireless data services. Great
idea, but AT&T and Verizon would rather keep this market to themselves. Does
LightSquared interfere with GPS or not? The U.S. government is involved. Either
this company will solve the GPS problem and be wildly successful, or it won't
get off the ground. Stay tuned.
These
are a few of the interesting stories to keep your eyes on in 2012. There are so
many more. Our tech, wireless and telecom industries remain as strong and
vibrant as ever. However, all companies are not on the same path. Some are on
the growing side of the Wave while others are on the falling side. Knowing the
difference is vital if you are an investor, worker, competitor or regulator.
Drop
me a line with your thoughts on other interesting companies worth keeping an eye
on. And stay tuned. I guarantee there will be some very interesting surprises in
2012. There always are!
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff Kagan is a tech analyst and consultant who enjoys sharing
his colorful perspectives on the changing industry he's been watching for 25
years. Email him at jeff@jeffKAGAN.com.
--------------------------------------------------------------------------------
http://www.ecommercetimes.com/story/73922.html
OPINION
Loyalty Programs: The Wireless Industry Could Be Onto Something Big
By
Jeff Kagan
E-Commerce
Times
12/08/11
5:00 AM PT
Customers want to have a closer relationship with the companies they do business with. They want to be recognized, respected and rewarded for their loyalty. Will wireless loyalty programs turn into the next airline frequent flyer club? I'll bet if you asked C Spire and U.S. Cellular, they would say yes.
Androids
and iPhones are not the only things that are new in wireless. Networks like C
Spire and U.S. Cellular are starting to market themselves very differently to
customers. They're using rewards and loyalty programs, which may play a larger
role in winning and keeping business going forward. Will Verizon, AT&T
(NYSE: T) and Sprint (NYSE: S) follow?
C
Spire just entered this space with a new program called "Percs." The
U.S. Cellular program is called the "Belief Project."
This
process is still in the early stages. However, if properly executed, it could
turn out to be a very important customer relationship
building program. The idea may be new in the wireless space, but it has been
around for quite a while. Just look at airline frequent flyer programs, for
example. Success depends how well the companies communicate with the marketplace
and how valuable the rewards are.
C
Spire was looking for a way separate itself from the competition. Looking for a
way to get closer to the customer. To reward customers for bringing their
business. To create an emotional connection with the company.
After
the first two months, C Spire had already signed up 77,601 members; 5,143,011
Perc points have been earned so far.
Based
on what I have learned about this program, C Spire could see quite a few of its
customers sign up. Long-term customers already have valuable points. In
addition, this idea could make C Spire very attractive to customers of other
carriers in their market area as well. Could this turn into a real customer
magnet?
What
about the larger competitors? You would think this idea would spread, but not
necessarily. Remember when AT&T Mobility (Cingular) hit a home run with its
rollover minutes? We thought competitors would follow. They did not.
I
think the big competitors like Verizon Wireless and AT&T Mobility will have
no interest in following this path -- at least, not yet. They build loyalty
differently.
Sprint
Nextel, T-Mobile and other smaller players are a different story. They stand a
better chance. Don't get me wrong -- every carrier has something they call a
loyalty program, but only a very few really stand out as valuable in the
customers' eyes.
Either
way, this idea is very innovative for wireless. Rewards must be compelling. C
Spire, for example, offers quite a few different rewards -- like 10 percent, 20
percent or 30 percent off accessories; free shipping; free accessories with an
upgrade; instant rebates on phones; $30 off the upgrade fee. This looks like a
great start.
As
one of only four U.S. carriers selling the Apple (Nasdaq: AAPL) iPhone, C Spire
has a unique opportunity and challange as it competes with AT&T, Verizon and
Sprint Nextel. It must reach out to customers in new ways and explain why
they'll be better with C Spire.
This
C Spire Percs loyalty program differentiates the company. The longer customers
stay with C Spire, the more Percs they quality for. In fact, C Spire customers
who have been with the carrier for five years already qualify for a high level
of Percs, and customers who have stayed with the carrier for 10 years or more
qualify at an even higher level.
A
growing group of customers should really like these loyalty and rewards
programs. After all, they want to have a closer relationship with the companies
they do business with. They want to be recognized, respected and rewarded for
their loyalty.
We'll
have to keep our eyes on this new area to see how successful it becomes. Will it
turn into the next airline frequent flyer club? I'll bet if you asked C Spire
and U.S. Cellular, they would say yes. I wonder if they realize how big this
could get if it strikes the right chord.
My
Pick of the Week is
Verizon Wireless, for getting its hands on the wireless spectrum from the cable
television industry. This should help it dodge some of the problems with
wireless data capacity that AT&T Mobility has been wrestling with.
SpectrumCo
is the cable television group that acquired spectrum several years back,
allowing companies like Comcast (Nasdaq: CMCSK) and Time Warner (NYSE: TWX) to
work with Sprint Nextel.
This
move is a big win for Verizon Wireless, but it is also just as big a loss for
Sprint Nextel.
What
will be different going forward? Will the cable television industry be more
successful in wireless going forward? Will this help Verizon with its spectrum
shortage problems going forward? And what's next for Sprint Nextel?
So, congratulations to Verizon Wireless and the cable television industry, and sorry to Sprint Nextel, which just got a helluva punch in the nose.
http://www.ecommercetimes.com/story/Solving-the-Wireless-Signal-Strength-Problem-73869.html
http://www.ecommercetimes.com/story/73869.html
OPINION
Solving
the Wireless Signal Strength Problem
By
Jeff Kagan
E-Commerce
Times
12/01/11
5:00 AM PT
Intermap provides location-based information from 3D digital models showing the strength of connections between every cell tower. This makes it easy for every carrier to improve service quality. Intermap helps wireless companies both with network expansion and with keeping existing networks in alignment and at top strength.
I
recently discovered Intermap, a company that helps wireless networks solve a
growing problem -- poor signal quality and strength.
It
has seen growth rates of 419 percent during the last year and, based on what
I've seen so far, that may just be the beginning.
My
Pick of the Week is the hot new Apple (Nasdaq: AAPL) iPhone 4S. It's in
short supply -- what's up?
Did
you ever wonder how wireless networks keep the best signal strength between
their cell towers, and how they prepare for new towers and network expansion?
It's an ongoing process.
Cell
towers are scattered around every city. Wireless carriers spend a fortune and
lots of time sending people up to the top of every tower just to visually see
the connecting towers.
The
reason they do this is to improve the connection you have with the network. As
time goes by, things change. Trees grow, buildings go up, billboards and signs
get in the way. All of this impedes the signal between towers. That's trouble.
Good
connections start to become not so good. Service can slow down or even
disappear. Blocked signals mean poor connectivity to the network. Remember, a
wireless signal is only as strong as its weakest connection. Customers who don't
get good service switch away, and wireless carriers lose business.
That
is the problem that Intermap helps wireless carriers solve. Fixing this problem
on an ongoing basis is key to keeping happy customers and sustained growth for
every wireless carrier.
Yesterday,
finding and managing all the bad cells took too much time and money.
Unfortunately, too many wireless networks still use yesterday's solution.
Intermap
has a modern day solution. It uses a variety of techniques. It has not only
created, but also continually updates, digital maps of every city showing
anything that can get in the way of a strong signal.
Simply
put, it provides location-based information, or LBI, from 3D digital models
showing the strength of connections between every tower. This makes it easy for
every carrier to improve service quality by aligning its towers. Intermap has
its own aircraft with special equipment to measure every mile called "NEXTMap
LinkPro."
Intermap
helps wireless companies both with network expansion and with keeping existing
networks in alignment and at top strength.
What
this means is that wireless carriers like Verizon Wireless, AT&T (NYSE: T)
Mobility, Sprint Nextel (NYSE: S), T-Mobile, C Spire, U.S. Wireless, MetroPCS
and so many others no longer have to spend time and money sending people to the
top of towers across their networks just to try and see the next tower off in
the distance.
Instead,
they can simply use Intermap software to get a detailed look at every cell site
in every city and fix every problem. Then they can raise or lower or change
configurations as needed -- quickly and inexpensively.
Intermap
works in multiple industries, not just wireless. I will share more about its
endeavors as I learn about them.
This
is a great example of a company with a great idea. It sees a growing problem and
has developed an innovative solution that, so far, is translating into a real
growth opportunity.
My
Pick of the Week is the hot new iPhone 4S. Apple is having a hard time
keeping carriers stocked with this device.
When
you walk into an AT&T Mobility, Verizon Wireless or Sprint Nextel store to
pick up a new iPhone 4S, you walk out with a promise that your iPhone will
arrive in the next couple of weeks. What?
C
Spire does not seem to have this problem. When you walk into one of its stores,
you walk out with an iPhone.
So
what is up? Is this a question of incredible demand or manufacturing problems?
We don't know yet.
It
will be interesting to see how this turns out, but even with these bumps in the
road, it looks like the Apple iPhone 4S is another big success.
Congratulations
all.
28 November 2011
US analyst Jeff Kagan says AT&T will make another attempt to buy T-Mobile USA, but the FCC and the industry aren’t addressing the real problem: the availability of spectrum. It’s time to address the cold, not the sneeze
Jeff
Kagan: AT&T will lobby behind the scenes to get the deal done then it will
pop back on the radar and it will try again
We have seen countless successful mergers in the wireless industry over the last
decade. AT&T has participated in many of them. Why then has everything
seemed to change now? Why is this T-Mobile deal being met with so much pushback?
The
reason is the marketplace has changed during the last several years. Let’s
discuss what changed, what went wrong, why AT&T wanted T-Mobile, what it
will do now and what Deutsche Telecom’s options are next.
It
all started with the smart phone explosion over the last few years. AT&T
Mobility led the charge and it won so many customers, so quickly, it could not
keep up with the demand.
Wireless is a balancing act. Carriers need to stay just ahead of the demand
curve. If they are too quick, they have to charge more to customers so they can
pay their bills. If they are too slow they have bottlenecks and service
problems.
After
wrestling with the sudden influx of customers and wireless data demand AT&T
knew it had a growing problem and needed a quick solution. It needed more
spectrum. So it decided the best solution was to acquire T-Mobile.
Good for the company
Yesterday this deal would have been approved easily. However today the
marketplace is different. AT&T’s first mistake was not realising this. I
like AT&T and this acquisition would be good for the company; however it is
not good for the industry.
That
was not AT&T’s concern. It didn’t think it needed to be concerned with
the entire industry. It had a spectrum shortage and it says this was the right
solution for AT&T.
Over the last decade we have seen so many mergers. Today there are very few
competitors left in the US, and they are very large. At some point regulators
simply have to say no when the next deal would continue to shrink the
marketplace to a level that would impact competition, innovation and pricing.
This
deal was that line in the sand, and regulators said no. First the Department of
Justice and now the FCC both said this deal may help AT&T, but would hurt
the marketplace.
So it looks like AT&T is withdrawing its application for acquisition.
However don’t be fooled into thinking that the attempt to acquire T-Mobile is
over. It is just behind the scenes now, instead of on the public stage.
I
have watched AT&T over the last 25 years through all its changes. Remember
this AT&T is actually SBC which acquired AT&T several years ago and took
the name.
Second attempt
We saw the same thing happen in the 1990s when SBC tried to acquire AT&T and
was denied by Reed Hundt, then chairman of the FCC, who called the effort
“unthinkable”. SBC withdrew the bid. We thought it was over and done.
However several years later SBC made a second attempt and that time it was
successful.
I
have a gut feeling that we are about to see history try and repeat itself.
AT&T will lobby behind the scenes to get the deal done then it will pop back
on the radar and it will try again.
There
is a bigger problem the industry faces which led AT&T to make this move:
spectrum shortage.
Every
carrier may suffer the same problems tomorrow. AT&T wants to get its hands
on T-Mobile spectrum to solve its problem. However even if it do merge it will
solve the problem only for a few years. Then it will be right back where it is
today. Then what?
In addition the other carriers will have the same problem and there will be no
solution left.
So we should be working to solve this spectrum shortage. That’s the debate we
should be having right now. Instead of each carrier owning a portion of the
spectrum, they should all pool their spectrum together. Then all carriers and
all smartphones can access it all.
When
one band is full, switch to another band. Problem solved.
That
is the kind of discussion we should be having right now. We must solve the
growing spectrum shortage problem. This AT&T merger is like a sneeze. We
should be focusing on the cold instead.
So
what’s next? T-Mobile owned by Deutsche Telecom is a big winner. It gets a $3
billion break-up fee and $1 billion in spectrum from AT&T. That will allow
it to build T-Mobile USA into a strong competitor.
Another
possibility is T-Mobile USA could be acquired by Sprint Nextel. Remember all
deals are not dead. However regulators have to weigh the benefits and hazards of
each now.
Meanwhile
AT&T will be working actively behind the scenes to clear the path for this
deal to happen. Can it make lightning strike twice? There are multiple balls in
the air so we will have to keep our eyes on them all. GTB
Jeff
Kagan is a technology analyst based in Atlanta, Georgia, US
jeff@jeffkagan.com
www.jeffkagan.com
http://www.ecommercetimes.com/story/Its-Not-Just-a-Tablet---Its-an-Ecosystem-73776.html
http://www.ecommercetimes.com/story/73776.html
OPINION
It's
Not Just a Tablet - It's an Ecosystem
By
Jeff Kagan
E-Commerce
Times
11/17/11
5:00 AM PT
Now that the Amazon Fire and Barnes & Noble Nook Tablet have hit the market, the tablet world has turned into a three-way horse race. The decision around which device to choose is more important than just the device. The choice of the device will lock you into a company and a cloud.
The
starting gun has just been fired. The new Amazon (Nasdaq: AMZN) Kindle Fire and
Barnes & Noble (NYSE: BKS) Nook Tablet have entered the tablet space,
preparded to compete with the Apple (Nasdaq: AAPL) iPad. That means this new
industry segment will quickly change and evolve into a completely new and
different model. The problem is, no one is educating us as consumers and
investors about this change. We have decisions and choices to make.
Let
me try and explain what this new tech world is transitioning into, how it
impacts companies, how competition will change, and the effect it will have on
your wallet. Then you can decide which is the best choice for your purchase and
your investments.
Then
in my Pick of the Week, let me tell you about a German tech firm called
Giesecke & Devrient, which just announced a new Nano-SIM card. It is
two-thirds the size of the small Micro-SIM card and it's found in many things
like wireless phones.
3-Way
Race
Over
the last year or two, we all have seen the tremendous impact the iPad has made.
Apple pretty much jump-started the entire tablet segment. There have been
countless other tablets introduced by other industry leaders, but they just
haven't made much of a dent yet in the market in comparison.
That
is about to change. This holiday shopping season will be all about these tablet
computers. All competitors will see a boost. However, only a few will be among
the big winners.
A
few years ago both Amazon.com and Barnes & Noble jumped into the e-reader
space and sold similar devices, but these were really just meant as book
readers. Now suddenly they are introducing new versions that look much closer to
the Apple iPad, but at a much lower price tags.
This
will create a real three-way horserace. The decision around which device to
choose is more important than just the device. The choice of the device will
lock you into a company and a cloud.
If
you choose the iPad, it will be easiest to buy content from Apple's system. If
you choose the Nook Tablet, you'll generally buy content from Barnes &
Noble. If you choose the Kindle Fire, you'll probably buy content from
Amazon.com.
So
choosing the device means you are choosing the online store, or cloud, in which
you'll do most of your shopping. If you change your mind after a year and want
to try another company and device, you cannot easily take the content you
already purchased with you. That is the problem.
That
may change over time. Remember, wireless phone numbers were not portable early
on. If you changed carriers you had to change phone numbers. That kept many
customers where they were even if they were not happy with the service. Carriers
loved it, but customers hated it.
Then
number portability transferred the power from the carrier to the customer.
Customers could keep their numbers and choose the carrier. Since then, quality
has increased. Now customers love it and the carriers don't.
The
same thing may happen in this tablet space after several years. Eventually we
may be able to easily move our content from one device and carrier to another
with some kind of "content portability," but not yet.
Until
then, choosing the device also means choosing the company and the cloud we want
to mainly do business with over the years.
So
choosing a device has more to do with the company and the cloud than the device
itself.
Buying
content this way, in files, is new. Of course, we have been dealing with this
for years as technology changes. Everyone had tons of old albums, 8-track tapes,
cassette tapes, CDs, DVDs and now music files downloaded from Internet stores.
We
are also watching leadership changes. Steve Jobs did lead Apple to the No. 1
spot in our hearts, but since his passing, the market has become a colder place.
It's full of companies, with fewer personalities. Both Apple and Barnes &
Noble are now this kind of faceless company.
Jeff
Bezos, the CEO of Amazon.com, is the only personality we have seen in this
space. Since we love people, Bezos may rise in popularity going forward. We have
not paid much attention to this yet, but mark my words.
Don't
think this wave of change is over yet, either. Who knows what is coming next? We
spend lots of money on never-to-be-used-again tech piled up in boxes in the
corners of our basement.
These
days, we log on and download music or movie files and play them on our devices.
This may sound clumsy, but this is the way the market matures. Expect this
revolution to continue.
Apple
is further ahead with this cloud space, but it's new to everyone. It lets you
buy stuff from the iTunes store. Your purchases stay in the Apple cloud and you
can access music, books and more on any Apple device like iPhone, iPod, Mac and
iPad.
Now
both Amazon.com and BN.com are gearing up to do the same thing. They still have
basic e-readers, but their high-powered tablet computers will do much of what
the Apple iPad does, for much less.
So
far they just offer these tablet devices, not wireless phones. Could that be
next? Maybe. If so, they will compete more directly with Apple on a variety of
devices.
The
big question is always, what is coming next? So who will be the big winner? To
tell you the truth, I think they will all be big winners for customers and
investors over the next few years. This new space will explode in a good way.
Beyond that it is impossible to tell.
Apple
will not compete with Amazon.com and BN.com for every purchase, but this seems
to be the direction competition is heading.
One
thing I do know is, we are just in the very beginning of this new wave that I
regularly discuss with you. The Tablet Wave will likely continue to grow and
make each company very successful.
The
cloud will grow in popularity and importance. It is a way for companies to build
their brand relationships with customers. It's a strange idea and concept, but
will gain popularity over coming years.
This
is also a threat and opportunity to the cable television industry as well. Much
change will occur in that space in coming years. How will companies like Comcast
(Nasdaq: CMCSK), Time Warner (NYSE: TWX) and Cox compete with this new tech?
Expect them to enter the tablet space as well.
The
good news is, whatever we buy will always be there, in the cloud. We will always
be able to use it. Then with content portability, it will be our content and we
can consume it on our choice of devices.
The
future may mean we don't have to buy the same content different ways. Perhaps
someday we will buy a copy of a book and either read it or listen to an audio
version for the same price, or at least at a discount.
As
the years pass, and as other industries get up to speed, we will likely use
these tablets to watch our cable television, as they will offer tablet versions
that we can also pay for in addition to home versions for regular televisions.
We will use these tablets to rent or buy movies to watch like going to
Blockbuster, but instead we'll buy from the cloud we do business with.
Apps
are another big and important segment. The bigger the demand for apps, the more
successful the company and the cloud will be. The more crucial these devices
become in our lives, the more successful the segment becomes.
So
the vast difference between Apple, B&N and Amazon.com is shrinking.
How
should you choose your new table computer? Based on the company and the cloud
you want to do business with going forward, not on the features of the device
itself. The reason is, over the next several years the devices will continue to
improve, but all your content stays in one company's cloud.
So
choose based on the company and the cloud. The question you have to ask yourself
is, which do you want to do business with and invest in? That is the real
question.
For
my Pick of the Week, let me tell you about a German tech firm called
Giesecke & Devrient, which just announced a new Nano-SIM card that is just
two-thirds the size of the tiny Micro-SIM card found in many wireless phones and
other devices today.
Things
just keep getting smaller and more powerful, don't they? Apple uses Micro-SIM
cards in the iPhone 4 and 4S, so I would guess they would be interested in this
newest version as well.
In
fact, a growing number of devices from wireless phones to tablets and more are
using this technology.
This
company made the first commercial SIM around 20 years ago. I would expect to see
it in the first devices within months. This Nano-SIM is backward compatible, so
it can be used in existing devices shortly -- an important feature.
Congratulations Giesecke & Devrient. It will be interesting to see how this Nano-SIM differs from the Micro-SIM. And it will be interesting to keep our eyes on this space to see what competitors are also jumping in, what is coming next and when.
http://www.ecommercetimes.com/story/73704.html
Selling the iPhone: One Carrier's Meat Is Another Carrier's Poison
By
Jeff Kagan
E-Commerce
Times
11/10/11
5:00 AM PT
Mary Dillon, the CEO of U.S. Cellular, simply said no to Apple. I am not sure Apple knows the meaning of the word "no." I'm sure the folks at Apple could not believe their ears. "We had the option to add the iPhone to our device lineup, but the risks were unacceptable," she said. Risks? This may be the first time anyone has put the word "risks" in the same sentence with "Apple." But Dillon is right.
Apple's
(Nasdaq: AAPL) iPhone is showing up everywhere this year. Most major competitors
have it, and Apple has also knocked on the doors of some of the Tier 2 players.
In an interesting twist, C Spire said yes, and U.S. Cellular said no thanks.
Why? I thought everyone wanted the iPhone -- but they have their reasons, and
this could be good news for both.
We
all know how much success AT&T (NYSE: T) Mobility had with the iPhone. In
fact. this device should have gone to other carriers a year or two ago, but
AT&T paid Apple a fortune to be the sole provider.
Earlier
this year, Verizon Wireless started selling the iPhone. Of course, it also paid
a fortune for the privilege. This fall, since the new version is out, Sprint
Nextel (NYSE: S) is also starting to sell the device -- and yes, it is costing
Sprint quite a bit as well.
Each
of the top three carriers paid Apple billions of dollars to sell the iPhone.
That means they won't be profitable for several years. And the surprises don't
end there.
C
Spire also recently announced it will sell the iPhone. That was an unexpected
surprise. Then last week, U.S. Cellular CEO Mary Dillon said during her
quarterly earnings call that Apple offered her company the iPhone. However, U.S.
Cellular said no thank you. Another surprise.
So
how many other wireless networks were offered the iPhone? How many said yes and
how many said no? This story is just starting to get interesting. The truth is
being revealed, one company at a time.
One
of the interesting stories will be watching the big three compete. Actually, I
think AT&T, Verizon and Sprint will simply sell iPhones in the same
percentages as their other smartphones. Not expecting any big surprises here.
A
more interesting story will be how C Spire competes. C-Spire has good service,
and its customers seem to like the company. In fact, 50 percent of C Spire
customers are now smartphone users. That is an incredibly strong position.
How
well will C Spire's iPhone adventure work? That is the interesting question.
Will it sell the expected number like AT&T, Verizon and Sprint -- or will it
surprise us and sell more?
It
depends on quite a few different things, like marketing, advertising, public
relations and so on. C Spire has been aggressive in the smartphone segment for
years. It has a fast network and good quality. It has priced its services lower
than the big guys. That may translate into higher than normal sales.
Another
really interesting story is how Mary Dillon, the CEO of U.S. Cellular, simply
said no to Apple. I am not sure Apple knows the meaning of the word
"no." I'm sure the folks at Apple could not believe their ears.
"We had the option to add the iPhone to our device lineup, but the risks
were unacceptable," Dillon said.
Risks?
This may be the first time anyone has put the word "risks" in the same
sentence with "Apple." But Dillon is right. The iPhone is not a good
fit for every network. There are risks. To carry the iPhone, a company has to
pay Apple billions of dollars. That means it will take years to show a profit.
The
iPhone battle has changed. The next year or two will reveal the real winners and
losers.
This
puts U.S. Cellular in both a very good and very bad position. It doesn't have to
commit billions to Apple. That is very smart from an expenditure point of view.
However, it also doesn't have the iPhone to sell, which is bad from a
competitive point of view.
What
that means is simply that customers who want an iPhone will have four other
carriers to choose from. Losing customers can be very costly. Will U.S. Cellular
be able to successfully compete with its other smartphones? That is the
question.
Of
course, if it made a mistake, it can always simply agree to pony up billions of
dollars and sell the iPhone next year. It will be interesting to see just how
important the Apple iPhone actually is in the industry.
So
it looks like T-Mobile and U.S. Cellular are not in the iPhone game this year.
However, there are four others competing in this space for the first time. This
year will be very interesting to watch.
There
are quite a few interesting angles to this iPhone story. The top six companies
will show us what they are made of with and without the iPhone in a crowded
market. Advertising, marketing and public relations will rise to a new level.
It
will be very interesting to watch and find out who wins, who loses and why.
My
Pick of the Week is the introduction of Barnes & Noble's (NYSE: BKS)
new Nook Tablet on Monday.
The
e-reader and tablet battle is really heating up between B&N and Amazon (Nasdaq:
AMZN), and they aren't even available for sale yet.
Amazon
introduced its Kindle Fire tablet a few weeks ago, along with several other
e-reader models. Now Barnes & Noble has a tablet version of its own
e-reader.
The
new battle begins. These may be some of the hottest items for sale this holiday
season. But which one should you buy? Ah, the question of the year.
If
you have not taken a look recently, the changes and innovations will surprise
you. You can get your choice of black and white or color screen. Some are touch
and others are not. You can read books, surf the Web, watch movies and more. Of
course, you can buy and read books, but now you can check out library books --
virtually, of course.
Amazon
just announced its new lending library. That's different from the regular
library. And I'll bet Barnes & Noble will do the same thing shortly.
That's
the way this segment operates. When one side gets the lead, the other side
catches up quickly. So the customer wins. Choose one or the other based on other
factors.
Choosing
is up to you, but I would recommend waiting a few weeks until these devices are
on the market and you can pick them up and compare them, side by side.
You
can visit your favorite store, like Staples (Nasdaq: SPLS) or Office Depot
(NYSE: ODP) or Walmart (NYSE: WMT), and hold them and use them and see which you
prefer.
I
believe when you do this, you will quickly choose your favorite. The devices are
similar, but they feel very different.
So
buckle up this holiday season. Reading may never have been this much fun!
http://www.ecommercetimes.com/story/The-Tough-Task-of-Humanizing-ATT-73666.html
http://www.ecommercetimes.com/story/73666.html
OPINION
The
Tough Task of Humanizing AT&T
By
Jeff Kagan
E-Commerce
Times
11/03/11
5:00 AM PT
AT&T has one of the best-known brand names in business. The problem is, customers don't love it any longer. That's a problem it's trying to solve by moving away from the hard sell and toward connecting with customers on a more personal and emotional level. But there's a problem with some of the terminology it's using. For example, "digital intimacy" -- what does that mean, exactly?
AT&T
(NYSE: T) is one of the most successful and best-known brand names in the
wireless and telecom industry and, in fact, in the entire world. So why do
customers dislike it so much? That's the question Esther Lee thinks about every
day.
Esther
Lee is vice president of brand marketing and advertising for the company. Her
job is to help customers love the AT&T brand. And right now it's an uphill
battle.
Then,
in my Pick of the Week, I'll tell you something that I heard this weekend
listening to Leo Laporte The Tech Guy on the radio. You'll be as amazed as I
was.
I
have written about the growing problem at AT&T several times over the last
few years. I am very happy to see it now both recognizes it has a problem and is
trying to solve it. While the solution is not yet working, this is at least a
beginning.
AT&T
has one of the best-known brand names in business. It has been around for well
over a century. You remember the story of Alexander Graham Bell. That's where
the "Bell" in Bell System came from. It was always baseball, apple
pie, Coca Cola and AT&T. Ma Bell. It was always part of our American
culture.
The
problem is, customers don't love it any longer. In fact, in many cases,
customers don't even like it. So what is AT&T doing wrong, and what are they
doing about it?
Sure,
they have gazillions of customers and continue to grow rapidly, but the company
has changed over time and customers as well as workers have valid complaints.
This must be fixed.
First,
we have to remember that this company called AT&T is not really the company
we think it is. The original AT&T is gone. This is actually SBC, the baby
bell from San Antonio, Texas. AT&T the long-distance giant was dying 10
years ago.
This
smallest baby bell acquired AT&T and took its name. In fact, it also
acquired AT&T Wireless, Bellsouth and Cingular a few years ago and has been
wrestling with this growing problem of customer dissatisfaction ever since.
I
remember after the acquisitions -- SBC executives called me to ask my opinion
about which name to use going forward. I said there was no choice. AT&T has
the history. It has the emotional connection to the customer. It is America. It
just has to be modernized for the next generation.
Early
on, things looked good. They changed the logo and focused on the brand and
image. I was proud of the job they were doing. Then they fell off the track
several years ago. They focused on the investor and not on the worker or the
customer.
And
over the next several years, this focused giant lost its emotional connection to
all of us. That was the beginning of the problems the company faces today.
That's
where Esther Lee enters the picture. She battles this problem and helps AT&T
win customers' hearts with marketing.
She
is trying to move away from the hard sell and toward connecting with customers
on a more personal and emotional level.
That
sounds like a great plan. That personal connection is the secret of successful
companies. That is what I have been talking about for years.
AT&T's
new, softer position is that it is not in telecom. Instead it's helping
customers connect. Sounds warm and fuzzy doesn't it? So far, so good.
She
told Advertising Age their grand platform over the last year and a half is
relentless innovation for human progress. OK. That is not as personal and
emotional as I thought, but it's a good start.
Let
me help translate. I think it's simply trying to tell us it cares, trying to put
a warm, human face on a large and cold company. Just like the personal
connection of Ma Bell in the good old days, right?
If
it can do this correctly, I think this is exactly the kind of thinking AT&T
needs right now. Will it be successful? That is the million-dollar question.
The
problem is it's mixing warm and fuzzy with cold and technical. What do I mean?
They describe this new warm and fuzzy plan as "digital intimacy." Oh
really. Digital intimacy? What's that mean exactly?
Can
you imagine using that language on your husband or wife? If your child said
that, you would wash their mouth out with soap, wouldn't you?
Digital
intimacy may sound good in a boardroom, but this does not translate and connect
with customers or workers. It does not make you see AT&T as a warm and fuzzy
friend like Ma Bell. Not by a long shot. Instead it's like an awkward teenager
or a bull in a china shop.
AT&T
has the same problem with both customers and workers. It's so large and its
workers come from different companies with many different cultures. Today,
AT&T workers feel totally uncared for and disconnected. They suddenly feel
like they now work for a cold and heartless giant. And in fact, they do.
What
is a company? It is built and run by people. So it's as warm and fuzzy or as
cold and calculating as they make it. And that direction comes from the top.
There is nothing wrong with warm and fuzzy. Some are very successful. Think of
Apple (Nasdaq: AAPL). Sure Steve Jobs may have been tough, but he and Apple
understood the value of building relationships.
Solving
this problem with the workers is the first steps. They can then solve the
problem with customers. Then good marketing will help put the frosting on the
new cake. AT&T needs to reverse the system, and then it can be fixed.
Focusing on the customer is good, but ignoring the workers short-circuits the
entire effort.
With
that said, I am glad it's now starting to think in this right direction. I don't
blame Esther Lee for this problem. She inherited a giant ship's marketing
problem that she needs to turn around.
I
think she is trying has hard as she can to bridge the real world and real needs
of real customers, with the cold and huge company. However the problem is
deeper. "Digital intimacy" are code words.
AT&T
needs to start using real, warm language. Think of all the successful
advertising and marketing AT&T had in the past. It gave you goose bumps.
That is what AT&T needs more of today.
The
problem is it's trying to bridge that gap using messaging that's cold and
heartless. It defeats the entire effort.
Success
in this area is more than just messaging. Messaging is just the frosting on the
cake. Important, but will not do it alone. AT&T has to remake the cake under
the frosting too.
May
I make a suggestion? Think back. Think of Ma Bell. Think about America. Think
about the connection with the customer. Think about all the good marketing
AT&T was known for. What does all that mean?
Doesn't
that feel warmer and better? It's personal. Isn't that what you want to achieve?
Now compare that to "digital intimacy." If you see the difference and
really understand it, you are on the right path to correcting the problem.
Branding
is not all about cold business. It's all about building the emotional connection
with the customer and the marketplace.
That
is the basic key message I want to make here. Once AT&T understands the cake
and the frosting, it will be on the right path toward making close personal
friends with customers and workers. And THAT will solve their growing problem.
Leo
Laporte said Netflix (Nasdaq: NFLX) uses one third of all Internet traffic.
What?
That's
right. We may send a gazillion emails, text messages, use Twitter, FaceBook and
YouTube, watch video clips, listen to music and so many other things.
However,
Netflix still uses 1/3 of all Internet traffic. Incredible.
And
that's today. As Netflix continues to grow and to transition from DVDs to online
streaming, they will gobble up even more of the Net.
The
good part for Netflix is they don't pay for these highways they are building
their business on. The bad part is we do. It's like paying more each month for
cable TV because of ESPN even if you don't watch ESPN.
Leo
said the Internet was not designed for that much video downloading or streaming.
I agree. But what are we going to do about it? The Net will have to keep bulking
up just to handle this traffic. And it will. Until eventually, some day, it
crashes.
I
don't think this will get the attention of the mainstream until that happens.
Until then we can just watch this awesome growth for both Netflix and video
streaming in stunned amazement.
With all the problems Netflix has had lately, I just wanted to say great job.
http://www.ecommercetimes.com/story/T-Mobiles-New-Strategy-Could-Be-a-Winner-73606.html
http://www.ecommercetimes.com/story/73606.html
OPINION
T-Mobile's
New Strategy Could Be a Winner
By
Jeff Kagan
E-Commerce
Times
10/27/11
5:00 AM PT
The cheaper, no-contract and prepaid side of the wireless market looks juicy. It's a lower-cost area for subscribers, but it is the fastest-growing segment of the industry. As prepaid carriers offer better phones and more robust wireless data experience at a lower cost, they are attracting lots of new users.
What
will T-Mobile do if the merger with AT&T (NYSE: T) does not work out? On the
outside, both AT&T and T-Mobile are pushing as hard as they can to get the
deal done. However, behind the scenes, T-Mobile is working even harder on the
path it will take in the event the deal does not get done. And it may have hit
on something.
My
Pick of the Week is how both Google (Nasdaq: GOOG) and Microsoft (Nasdaq:
MSFT) are battling over the remains of Yahoo (Nasdaq: YHOO). Which will win --
and what will happen next?
Over
the last several years, AT&T and Verizon have been growing much faster than
the others. Sprint Nextel (NYSE: S) and T-Mobile are losing postpaid customers
to them. This can be good or bad, depending on which side you are on. AT&T
and Verizon workers and investors are obviously happy, but at Sprint and
T-Mobile -- not so much.
Sprint
has been trying to reinvent itself by focusing on more than just postpaid. It's
been focusing on prepaid, wholesale and other not-so-typical offerings, and that
path looks successful so far.
T-Mobile
has been struggling. That's why this deal with AT&T looked like such a good
deal for it -- just not for the industry. It all started several years back with
the industry-wide move to smartphones and wireless data. AT&T led that
charge. Now everyone realizes that is the path to be on.
T-Mobile
snoozed its way through the industry shift from 2G to 3G. It had focused on a
more basic service and attracted a more basic customer who used voice and text.
It
was doing well, gaining customers; however, the shift to wireless data was just
too much for it. The company started losing business.
T-Mobile
finally realized this change was happening, so it jumped in as fast as it could,
but it was behind the eight ball. When it shifted its focus to the wireless data
area, it started winning customers again. Things looked brighter for the
company.
It
realized it could not catch up to the reality of 3G and the lead of its larger
competitors. So what did T-Mobile do? It changed the rules of the game. It was
the first to claim 4G. What? How? It was behind the rest of the pack on 3G. How
could it be ahead?
T-Mobile
came up with a brilliant marketing, advertising and public relations strategy,
and it worked early on. It was winning again. It upgraded selected portions of
its network. The problem was that most of its network was not ahead of the
competition.
When
the marketplace caught on, it started to lose business again. The ups and downs
were like a roller coaster ride at an amusement park. That was T-Mobile's world.
That's
why AT&T's merger lifeline made so much sense for the company -- just not
for the industry.
In
blocking the merger, the U.S. government said T-Mobile was too important a
competitor to lose. It said the marketplace had seen many mergers in the last
decade, but this one crossed the line and was not good for the industry. At some
point, mergers become anticompetitive.
That
brings us to today. If this acquisition does not occur, what is the next step
for T-Mobile? What is its strategy?
It
looks like T-Mobile is now starting to enter the same space as Sprint Nextel.
Its leaders figure if they have lemons, make lemonade. This strategy seems to be
working for Sprint, so it could work for T-Mobile as well.
The
cheaper, no-contract and prepaid side of the wireless market looks juicy. It's a
lower-cost area for subscribers, but it is the fastest-growing segment of the
industry. As prepaid carriers offer better phones and more robust wireless data
experience at a lower cost, they are attracting lots of new users.
"This
is a really strong, very, very, high-growth business for us in all key areas,
both on customer growth and on revenue," Mike Katz, VP of marketing for
T-Mobile and head of the company's prepaid group, told The Wall Street Journal.
This
is the same space occupied by MetroPCS, Leap Wireless, Cricket, Tracfone and
other prepaid services. This is a segment the wireless industry never really
paid much attention to; however, even though it is just a tiny slice of the
marketplace, it is growing rapidly.
T-Mobile
just introduced a lower-cost plan, available at Walmart (NYSE: WMT), that
undercuts the competition in this segment. This is a great start. The plan
allows plenty of time for Web surfing, along with unlimited texting, but only
100 minutes of prepaid talk.
It
offers T-Mobile's fast wireless data service, which many smaller competitors do
not yet have. This first step into this new market segment seems to make a lot
of sense for the company.
This
suggests another shift for T-Mobile, but this one may be right on target. This
could finally be the start of something good at T-Mobile. We'll have to keep our
eyes on it and see what happens next. This kind of move proves the government
right. T-Mobile is an important part of the competitive mix.
This
is not a shift the company wanted to make. It was a consequence of losing
traditional customers to larger competitors. However, as the gulf expands
between the two or three largest providers and everyone else, there is real
opportunity.
As
an analyst and consultant, I have worked with AT&T, Verizon and Sprint off
and on over the years, and I've have seen many good and bad ideas. I can
honestly say that this move by T-Mobile is a great idea -- if it can make it
happen, that is.
The
choice is simple. T-Mobile can continue to compete in Tier 1 against Verizon,
AT&T and Sprint and continue to lose. Or it can shift and start to compete
in Tier 2 against all the rest. If it does, it can be No. 1 in that segment.
You
thought the World Series was the autumn game to watch. Not this year. Keep your
eyes on this one. It should be big and exciting, and depending who wins, the
marketplace could be very different for investors, customers and workers.
As
big and strong as Microsoft is, it is not growing in the hot areas like the Web
and wireless.
It
has formed a partnership with Nokia (NYSE: NOK) on wireless, but what about the
huge Web search opportunity? The place where Google is such a big winner?
Microsoft
had its eyes on Yahoo several years ago. It wanted to acquire the company back
then and was willing to pay a pretty penny. Yahoo said no. Microsoft backed
away.
Since
then, things have gotten better and worse. The bad part is Yahoo has lost
customers, and its market value has dropped. The good part is it will be even
less expensive to acquire.
So
what will be the difference between an acquisition by Microsoft or Google?
In
short, Microsoft wants to punch and Google wants to block.
Microsoft
wants to use Yahoo to better compete with Google. As a self-defense move, Google
wants to take away Microsoft's ability to do that.
So
if Microsoft wins, it will try to build up Yahoo and partner with its own brand
to successfully compete in the search space. If Google wins, I think we will see
Yahoo disappear.
Google
is so successful right now it cannot be interested in Yahoo for any reason other
than to try to block Microsoft from using it to more effectively compete.
It
will be interesting to watch this unfold over the next several months.
http://www.ecommercetimes.com/story/Can-the-Shriveling-BlackBerry-Brand-Be-Saved-73551.html
http://www.ecommercetimes.com/story/73551.html
OPINION
By
Jeff Kagan
E-Commerce
Times
10/20/11
5:00 AM PT
RIM is at a crossroads. One way is success and growth. The other is failure. Whether it is a player going forward depends on the steps it takes right now. This is the moment in RIM history that we will look back at and say was its turning point. Will it be? Do RIM's leaders get it? Do they know the direction to head? RIM needs to re-invent itself around technology and the brand. It's time to hit the refresh button.
Research
In Motion (Nasdaq: RIMM) is the successful, but aging grandpa in the wireless
business, and lately it has encountered some big problems -- but that doesn't
mean the company can't turn around. I'll get into its challenges and some ideas
about how it can surmount them first.
Then,
in my Pick of the Week section, I'll look at Cox Communications, its brand
challenge, and why it is reviewing its US$100 million media account.
RIM
had a tough week with another outage. This time, I am afraid it will cost them
customers. RIM is at a crossroads. It has a choice. Only one way is the right
way toward success. Does RIM know what to do? Has its leadership learned the
right lesson? The next steps will either heal the company and it will succeed
again, or it will continue to drop like a rock.
It's
all about bringing the brand up to date -- something RIM has not done as yet.
It's about having the brand say the right things.
BlackBerry
outages at RIM are nothing new. Over the last decade, we have experienced so
many outages it makes your head spin. It would have put a lesser company out of
business. Yet it hasn't hurt RIM until this time. It kept growing. However, from
now on, things will be different. RIM is no longer the bulletproof company it
was.
Today,
RIM is struggling against fast-growing competitors. Apple's (Nasdaq: AAPL)
iPhone and Google's (Nasdaq: GOOG) Android have captured the imagination of the
marketplace. They have taken over the leadership of the smartphone space.
Since
customers have other choices now, I believe this will be the first RIM outage
that will result in customer losses.
I
have a suggestion for CEOs Jim Balsillie and Mike Lazaridis. RIM never paid much
attention to public relations, media relations or analyst relations. In its
defense, it didn't have to. Everything was fine. It was the largest. The leader.
And it was growing.
However,
everything is different. It is not the leader any longer. Like Motorola of a
decade ago, and like Nokia (NYSE: NOK) today, RIM is struggling.
It
would have benefited from paying attention to public relations, media relations
and analyst relations all along. It didn't.
Now
the stories about RIM are always negative. So now its execs have to spend their
time and energy fighting negative stories just to try and scrape their way back
up to neutral. Keeping their head above water to breathe is getting tough.
Forget about making progress.
Yesterday,
RIM was bulletproof. Even when outage after outage kept shooting it in the foot,
RIM never lost business. RIM is the only company that continually experiences
these outages. Why? And why can't it use these outages to help itself?
Other
leaders have also faced the same challenge. Some update and create the next Wave
and grow. Others don't. So what will the RIM story be?
RIM
has not updated its technology or their its brand in years. It should have
updated its brand and its tech all along. The result is that it is losing
customers.
Over
the last few years, RIM has watched their marketshare fade. It has watched the
PR and media chatter about what's new and cool shift to its competitors.
RIM
did launch a new tablet to much fanfare and high expectations, but it has just
not captured the imagination of the marketplace.
Jim
and Mike know what is happening. However, they don't know how to solve the
growing problem. Their minds are looking backward to when they led. They are not
clearly looking forward at the changed marketplace and the new rules for
winning. They are different.
RIM
has not yet updated its technology. The BlackBerry device is still very good but
still very much the same. New technology found in the iPhone and in the many
smartphones running Android is not only exciting and brand new, but it captures
the imagination of the media, analysts, customers and investors.
Blackberry
apps work great, but there aren't many compared with Apple and Google. Compare
several hundred to several hundred thousand. RIM should have so many more for
business and personal use.
The
BlackBerry web browser stinks. It always has, but there was nothing better.
Today Apple synchronizes your favorite sites from your laptop Web browser. That
way you can easily search the Web on your iPhone just like on your computer. Why
can't BlackBerry do that?
BlackBerry
public relations, media relations and analyst relations are terrible. RIM
doesn't have an understanding of how this works, and that is costing the
company.
RIM
has tried to expand the BlackBerry beyond business into the consumer side. It
tried to compete against Google and Apple. It failed. Instead, it should focus
on rebuilding and strengthening its brand on the business side. That is its key
market. Once that is secure, it can experiment with other sectors, but it needs
to strengthen its core first.
BlackBerry
can still own the smartphone sector on the business side of the coin if RIM acts
now and makes the right updates in technology and its brand.
BlackBerry
outages are a problem. The company has to make sure there are no more outages.
Period.
However,
if that is not possible, it needs to turn the outages into a benefit. How? Have
every outage become a giant billboard about the company's security and its
benefits to the business community.
When
there is another outage, turn the outage toward the company's strengths. Explain
to the marketplace that the reason for the occasional outages is the amazing and
secure email system that no one else has.
Explain
how occasionally it has to burp, and we get an outage. Others don't have this
problem because they don't have this kind of security built in. Occasional
outages are a small price to pay for this kind of innovation and security.
Doesn't
that make more sense than the way RIM currently handles these outages? It should
turn a problem into an opportunity to remind the world about its strengths.
Every
crisis is a public relations opportunity. RIM has not taken advantage of this.
It is on the wrong side of this coin. It is fighting to keep its head above
water. Instead, it should be leading the thought battle, using outages to its
advantage.
When
there is an outage, RIM should throw its public relations efforts into high
gear. Have a well known and familiar key spokesperson go on television and radio
news networks and all the newspapers. Explain the problem. Put out regular press
releases.
This
is what reporters look at when they write stories that influence the entire
marketplace.
An
apology is necessary, of course. Then RIM should explain the technology and how
secure it is and how it is more advanced than others. Explain how these
occasional outages are a small price to pay.
RIM
needs to get back on the radar with innovations. Wouldn't it be great to see
users anxiously awaiting the next version of BlackBerry and the media talking
about what's new?
RIM
is at a crossroads. One way is success and growth. The other is failure. Whether
it is a player going forward depends on the steps it takes right now.
This
is the moment in RIM history that we will look back at and say was its turning
point. Will it be? Do RIM's leaders get it? Do they know the direction to head?
RIM
needs to re-invent itself around technology and the brand. It's time to hit the
refresh button.
Let
me say that RIM has done an incredible job of building the smartphone industry
over the last decade. But the world is changing. The Wave has just about passed
RIM by. Either it creates the next Wave, or it will continue to shrink over the
next decade.
I
have worked with several companies that successfully did the same thing. As the
marketplace changes, so must a company's strategy and brand if it is going to
continue to succeed. If it doesn't change, it falls backwards.
Cox's
leaders realize it can be more efficient to work closely with one key marketing
team than to spread their attention across many teams in many areas.
It's
all about strengthening the brand in a noisy marketplace. It's about taking the
shortest and most effective path to connect on an emotional level with customers
and prospects and investors.
Currently,
Cox is all over the place. It operates in 18 different markets and uses nine
different agencies. Each operates independently. How can its execs effectively
wrap their minds around that? That's no way to get unity of message and
discounts for the wallet.
I
think this new path is so right, the company should have taken it years ago.
One
tenth of its revenue comes from small business. This is a great opportunity if
it can improve and update its brand identity.
Cox
Communications is a cable television company, but it is trying to build a
presence in wireless. The problem is, we don't hear much about that. Wireless is
a big opportunity IF it can strike the right chord in the marketplace.
Cox
is a well-run company and customers generally like it. Cox has always been a
quiet and low-key player. However, the marketplace is getting noisier and
rowdier all the time. It needs to be heard, or else it will be lost.
Companies need to adjust, or they run the risk of running off the track. This is where Cox is now. If it successfully makes this next move, I think it will continue to succeed. That is its challenge. We should keep our eyes on Cox.
http://www.ecommercetimes.com/story/Whats-Next-for-Apple-73490.html
http://www.ecommercetimes.com/story/73490.html
OPINION
By
Jeff Kagan
E-Commerce
Times
10/13/11
5:00 AM PT
Now that Steve is gone, we have to wonder if Apple has peaked. Will the Wave now crest and turn the other way over the next year or two? Without Steve Jobs continuing to throw wood on the fire, will it eventually die down? Or can Tim continue? Remember, Steve and Apple were connected in a very special way. Can Tim do the same thing in his own way?
After
Steve Jobs' passing last week we have seen an unbelievable amount of, well, love
poured out by everyone. That is truly amazing. Then it hits you. Steve Jobs and
Apple (Nasdaq: AAPL) are connected. They are one. It's almost like Siamese twins
connected at the hip. What can we expect now that Steve is no longer with us?
For
my Pick of the Week, I'll consider which carrier will be the next big Apple
iPhone winner. This time there are three competitors getting ready to slug it
out in the marketplace.
I'll
be blunt about Steve Jobs and Apple. People are very sad, of course, but like
the Godfather said, business is business. Countless companies, competitors and
predators are getting ready to pounce after a respectful period of time has
passed.
So
what is next for Apple? Well quite a bit, actually. You see when Steve got sick
several years ago, he realized his time was limited. He came up with several new
ideas. Ideas that could be a big as the iPod, iPhone and iPad. We should expect
to see them develop and roll out over the next several years.
He
also contacted someone he had known for years, Walter Isaacson and asked him to
write his biography. That was important to this private man as a way for him to
teach his children what he wasn't able to because he was always working.
Tim
Cook is the next leader of Apple. Steve honestly felt and thought Tim would be
his best replacement. He had been around Steve, learning through osmosis. Tim
may be a very good choice for a traditional CEO, but will Apple be Apple without
Steve Jobs?
Unfortunately,
the answer is no. And that is the challenge. Can Apple still shine?
Tim
is not connected at the hip to Apple like Steve was. No one could be. We grew up
with Steve. We knew him. It was personal. We don't know Tim yet. As we get to
know him, will he be able to stoke fires like Steve did?
While
we won't see Apple wither and die, I do think we will see serious changes at the
company. We measured Apple not just based on numbers, like every other company,
but on personal feelings. On history. On a personal connection with Steve.
Numbers
and feelings don't usually mix. However, that is what Apple is -- numbers and
feelings.
When
the CEO is changed at any company, the company changes. It takes on the
personality of the new CEO. If that is the case, what will Apple look like?
No
one can replace Steve Jobs. We have watched his Apple story grow over the last
few decades like a weekly TV series we just couldn't miss. Remember the old hit
shows "Dallas" with JR Ewing, and "Dynasty" with Blake
Carrington?
They
were connected to us. We liked them personally. Liked the families, as broken as
they were. They were like family friends. We tuned in every week to watch the
story develop.
Steve
and Apple are that kind of story in real life. We watched Steve grow up in front
of us. He was just a kid when he started. Sort of like Mark Zuckerberg of
Facebook. We experienced his wins and losses. Whether we were a customer,
investor, worker, partner or just a follower, we felt part of his story.
When
a TV series ends, that's it. It's over. However, when a CEO dies, the company
continues. After all, there are countless people that depend on continued
success. As it should be.
So
one season is ending, and the next season is starting. It will be a different
company going forward.
We
don't really know Tim like we grew to know Steve. It will take us all a while.
So we don't know what to expect. This is an uneasy feeling. The company is now a
blank slate. What will it look like going forward?
So
if Apple will not be the Apple we know today. What will it become? What will it
look like next year, in five years, 10 years?
Competition
is heating up. Apple will fight the growing competition from successful
companies like Google (Nasdaq: GOOG) and Amazon (Nasdaq: AMZN).
In
the past, we could always count on Apple out-innovating and out dazzling the
competition, but that was in large part due to Steve Jobs.
We
have seen other leaders rise and fall over time. I call this "The Wave
Effect."
Companies
like Motorola rode the Wave for decades until they lost it in the 1990s and have
struggled ever since to win it back.
Companies
like Nokia (NYSE: NOK), which took the lead from Motorola in the 1990s, and
other leaders like RIM are now in the process of losing their lead to the next
generation of competitors like Google and Apple.
It
seems every leader has its day. It rides a Wave of success. But every Wave rises
then falls. They all do. It's just a matter of time.
Steve
Jobs gave Apple extra oomph and kept creating the next wave. Remember, Apple was
successful until the early 1990s then lost its way. It also lost Steve Jobs, who
was ousted by the new CEO. It only recovered after he came back.
The
return of Steve Jobs ushered in a long winning streak for the company. Wave
after wave of product after product. More than just a winning streak, it was
bigger than that. It transformed many industries -- from the computer to music
to cellphones.
If
Steve Jobs were still here, Apple would have more than likely stayed on this
winning track. Now Apple is on a different track. Will it continue to be
successful?
Steve
had been working on several new ideas. They could continue to help Apple lead.
What is the next industry Steve planned to transform? We may learn that secret
soon.
Now
that Steve is gone, we have to wonder if Apple has peaked. Will the Wave now
crest and turn the other way over the next year or two?
Without
Steve Jobs continuing to throw wood on the fire, will it eventually die down? Or
can Tim continue? Remember, Steve and Apple were connected in a very special
way. Can Tim do the same thing in his own way?
The
Apple we knew and loved has suddenly changed and will be a very different
company going forward. It could be more or less successful. We'll have to watch
and see.
Steve,
you are one special man, and we will miss you. I just want to say we love you,
Steve. You will always be a true inspiration to our generation. You rocked our
world. And we are all better for it. Rest in peace.
As
my Pick of the Week, let me ask you a question. Who will win with the new
Apple iPhone 4S? Will it be AT&T (NYSE: T) Mobility, Verizon Wireless or
Sprint Nextel (NYSE: S)?
When
this new iPhone was introduced, I said it wasn't a big enough deal to get
excited about. I said this would more be a story about the three carriers
competing for the first time. However, with the passing of Steve, I think the
sales of this version of the Apple iPhone could be enormous. We'll have to
watch.
AT&T
has carried the phone for years. Verizon just started several months ago. Sprint
will start very shortly. This release will be the first time all three will be
competing head to head. Who will win?
We
expected Verizon to rock our world last spring. Didn't happen. Maybe it was
because it was in the middle of the iPhone season. Maybe customers were waiting
to see how well Verizon would handle the pressure. Maybe they wanted to wait
till the next version came out.
There
were plenty of reasons we thought up to explain the disappointing sales, but now
we are at the starting line of the real race. And this time Sprint is here too.
The
new Apple iPhone 4S is launching, and AT&T, Verizon and Sprint are the
racers in the United States that are lining up and getting ready for the
starting gun.
Should
we expect a big runaway story or just more of the same? We'll just have to watch
the sales figures over the next few months and see.
What's
new and different about this rollout is not so much the device. That is pretty
boring this time. The real story is the three competitors for the first time.
Will
they really rock the boat? We'll see.
Bang!
The race is officially on!
http://www.ecommercetimes.com/story/Why-Verizon-and-ATT-Are-Up-Kodak-and-Yahoo-Down-73436.html
http://www.ecommercetimes.com/story/73436.html
OPINION
By
Jeff Kagan
E-Commerce
Times
10/06/11
5:00 AM PT
When digital cameras started showing up on wireless phones 10 years ago, Kodak should have captured that Wave. It didn't. As loved as Kodak is, it never updated its brand, and it never jumped on the next Wave. Its leaders must have thought the company's brand name would see them through. It didn't. It never does.
Every
company faces the same challenges. Some successfully transition themselves
inside the changing industry. They update their brand and continue ride the
Wave. Others struggle. Some even die. Why the difference? Look at companies like
Verizon, AT&T (NYSE: T), Qwest, Kodak and Yahoo (Nasdaq: YHOO), among many
others. Why do some succeed while others fail?
There
are three catagories of companies: companies that successfully transition;
companies that have tried, but fail; companies that missed the entire transition
class in schoool and simply don't participate. Only one of these is the winner.
I
have helped many companies and their executives understand this important issue.
Execs are talented people who won big time with their great ideas. However they
don't know everything. Many don't have a clue about the natural evolution of the
marketplace and how to transition themselves to continue winning long term.
You
would be surprised how many of these companies that make this basic mistake are
big, brand name firms that should know better. Does Research In Motion (Nasdaq:
RIMM) come to mind?
A
good way to understand this is to think about this natural phenomenon as the
waves in the ocean. If you catch the wave, you take advantage of the power of
nature to propel you.
Staying
with that wave is key. If you stay with the wave, you keep moving. Keep growing.
If you don't, the wave passes you by. It's your job to continue to transition
your company to stay with the power of the wave. It's as simple as that.
Ongoing
success has to do with both successfully updating the master brand and
understanding the Wave theory I have talked about many times before. Doing both
well can create the secret sauce of success your company needs to keep up with
the changing industry. Getting this wrong is nothing less than disaster for your
firm.
As
the industry continues to grow and mature, customer needs and wants change. What
it takes to stay successful changes. How to stay tuned in so you can ride the
Wave of success changes all the time.
Matching
your brand identity to that changing Wave is key. If you don't, your brand will
eventually become tired. Failure is next. We have seen this time and time again.
It is still happening today.
The
Wave theory I talk about is clear. Opportunities have a lifespan. Think of this
lifespan as a Wave, going up then down the other side. Companies can be very
strong riding their Wave up, but if they are not careful they can simply ride
the Wave down the other side as well.
If
you have not created the next Wave to grow on, your company will struggle when
the current Wave crests then falls. And it always does.
There
are plenty of examples to examine in the marketplace today. Here are a few.
Verizon
and SBC were both growing in the 1990s. Local phone lines were growing -- they
had strong brand recognition, and they were climbing the Wave. Then about 10
years ago, local phone lines crested and started falling as others -- like VoIP,
cable television and wireless companies -- started offering competitive phone
service.
If
they didn't update their brand and switch to the next Wave, they would continue
to struggle and shrink.
SBC
acquired AT&T and took its name. Today, both Verizon and AT&T are very
healthy growing companies, but they are very different from 10 years ago. They
are no longer local phone companies. They have expanded. Now they focus on
wireless and television and Internet as their local phone business shrinks.
Verizon
and AT&T have successfully transitioned to date. And that is the point I
want to make here. You must continue to transition yourself and stay with the
growth Wave.
In
contrast, companies like Qwest -- also a local phone company -- never followed
the same path. It struggled. No wireless. No television. It lost business, and
it had a hard time growing in other areas.
It
was recently acquired by CenturyLink. This is a company on the growth side of
the Wave because of acquisitions. We'll have to keep our eyes on Qwest and
CenturyLink and how well they do now. Will they grow organically, or just
through acquisitions?
Qwest
could have been as successful as Verizon and AT&T. It is the same type of
company. But it missed the transition and the Wave passed it by.
It
is that simple and that complex.
Eastman
Kodak (NYSE: EK) is the latest company that is failing. Why? It is one of
America's best known and most loved brands. The reason is simple: Its execs
never worried this could ever happen to them. By the time they realized they
were in trouble, it was too late. The Wave passed them by. Sound familiar?
Motorola perhaps.
When
the first digital cameras came out, Kodak should have sensed the industry was
changing. It should have lead that charge. It didn't.
When
digital cameras started showing up on wireless phones 10 years ago, Kodak should
have captured that Wave. It didn't.
As
loved as Kodak is, it never updated its brand, and it never jumped on the next
Wave. Its leaders must have thought the company's brand name would see them
through. It didn't. It never does.
You
have to update the brand and ride a new Wave to success.
Motorola
was a leader for decades. Can you spell bulletproof? Then, in the mid 1990s, the
world it once led changed. Its execs thought their company was too important to
fail. They were wrong. The industry moved right past it, and it was dragged
along in the dust.
Motorola
finally had a second chance with the Razr in the early 2000s. Unfortunately,
that was also when the Wave rose, peaked and fell again. Its leaders didn't
understand the process. They didn't understand they had to keep feeding the
fire. They didn't understand they had to catch the next Wave.
So
Motorola struggled once again until the last couple years when it partnered with
Google (Nasdaq: GOOG) and Verizon Wireless. Its Droid phones have been
successful. However, it still faces new threats. Will it handle things better
this time? Is it ready this time? Will it catch the next Wave?
Of
course, if Google manages to close its acquisition deal, a lot will change for
Motorola.
Yahoo
once led the search space, but in recent years it has lost to Google. Google won
early on with the speed of its search results. It was the quickest in the
market.
Yahoo's
execs have been trying everything they can think of, but they have not been able
to rejuvenate the company. They have not updated the brand, however. They have
not changed the Wave they ride. These are the basics. The keys.
Companies
like Google and Apple (Nasdaq: AAPL) are riding the Wave and focusing on their
brand and succeeding. These are the untouchables to many. Will they continue?
Google
faces new pressures from the U.S. government that will only increase. Microsoft
(Nasdaq: MSFT) had a similar struggle and suffered for quite a long time. Apple
faces its own transition.
These
two are strong today, but will that continue?
Nokia
(NYSE: NOK) had a very successful decade and a half riding its single Wave. It
took the lead from Motorola in the 1990s and never looked back.
A
few years ago, the handset business suddenly shifted to smartphones, and new
companies like Apple and Google led that space. Nokia was left behind in that
revolution.
Nokia
realized its winning streak was over. It has tried to become important in the
smartphone space and compete with Google and Apple. It has failed so far.
Why?
Its brand name in the U.S. is for regular wireless phones, not smartphones.
It
has not been able to expand the meaning of its brand. It still has a strong
brand in handsets, however. Before the Wave totally passes it by, Nokia must get
back on track.
The
rumor is it will now start to focus on what it does best -- handsets and basic
smartphones. It will no longer directly compete against Apple and Google. That
is a good idea. It may lead in its segment once again.
RIM
is similar. BlackBerry ruled until the last four years when the super
smartphones from Apple and Google came into play. It has since struggled with
updating its brand and technology. Its new PlayBook tablet computer has not
caught on.
It
is seen as yesterday's brand. It has not successfully transitioned to the new
Wave. It's not too late, but its leaders have to understand the problem and the
solution. They don't so far.
RIM
never had to worry about brand success. With the BlackBerry, it was just always
there. So its execs never understood it, or got good at it. Now that the
company's survival depends on it, they don't have a clue what comes next. That
is the sad part.
Perhaps
RIM should consider a similar path to Nokia. Perhaps it should focus on what it
does best with the marketplace that knows and likes and uses its products.
It
has to update its brand and technology. Its Web browser really is lacking. But
if it updates, it could succeed in its existing space. If it does this before
it's too late, that is.
As
you can see, some companies make transitions and continue to succeed, while
others don't. Why? The answer is obvious to me. They simply don't understand
branding and the Wave of the business.
They
should all have the same goal. Update the brand and transition to the next Wave
and lead, before it's too late. So why don't companies get it?
Some
executives get it and some don't. Some built their successful company without
really understanding the brand and the Wave and the constant transition they
need to keep up with.
They
just don't think of this whole thing like a surfer thinks. Sticking with the
power of the Wave is key. You don't have to create your own new Wave like Google
and Apple. Instead you can simply ride the power of the Wave that surrounds you,
like AT&T and Verizon.
Linking
the changing master brand concept and the Wave is the secret sauce that can make
all the difference between whether a company will successfully transition into a
new butterfly or just stay an old caterpillar.
The
choice between success and failure is always yours.
http://www.ecommercetimes.com/story/Hello-Hello-Can-You-Hear-Me-Now-73381.html
http://www.ecommercetimes.com/story/73381.html
OPINION
By
Jeff Kagan
E-Commerce
Times
09/29/11
5:00 AM PT
There are countless dead spots all over the U.S. -- embarrassing to the carriers, damaging to their brand, and frustrating to their customers. This is 2011. It's about time to get good coverage already, don't you think? Today it looks like carriers are upgrading their larger markets for all the whiz-bang 4G technology, and not filling in the dead spots in other areas to give people basic connectivity.
You
know how frustrating it is to have a wireless call dropped, right? Or to have
such a weak connection that you can't make a call at all. Very frustrating, to
say the least. Now imagine that problem happening on a regular basis. Sounds
like problems we had 10 years ago, right? Well, that is still everyday life in
too many cities and towns around the United States. I call them black holes in
wireless coverage, and I'll explain why.
Then,
as my Pick of the Week topic, I'll tell you how the rich use technology
-- about startling new numbers on things like smartphones and big-screen TVs.
Remember
the Verizon Wireless television commercials that screamed, "Can you hear me
now?" It may be hard to believe, but today many cities still have this
problem, and consumers are still complaining at the top of their lungs: No, we
cannot hear you now. Fix it already.
The
problem is not just with Verizon Wireless either. It is also with AT&T
(NYSE: T) Mobility, Sprint Nextel (NYSE: S), T-Mobile, MetroPCS, Tracfone and
countless other networks.
Don't
get me wrong. I love cellular. Wireless is one of the best things that ever
happened. But as I travel around the country I have experienced quite a few of
these black holes in coverage.
On
occasion, I read a good article trying to bring this problem to the attention of
anyone who can do something about it.
The
September issue of Hilton Head Monthly Magazine had one, written by Sally Mahan.
Depending
on where you are standing, you either have a strong signal or no signal. If you
are driving, you often lose a call right in the middle.
Lori
Goodridge-Cribb, the publisher of the magazine, experiences the same problems.
So do I. And so does everyone else on the island -- and that's the point. Maybe
we all need to put our voices together and demand better coverage.
There
are countless dead spots all over the U.S. -- embarrassing to the carriers,
damaging to their brand, and frustrating to their customers. This is 2011. It's
about time to get good coverage already, don't you think?
So
what is the problem, exactly? Wireless carriers either don't realize or choose
to ignore this problem. Don't they realize letting it continue is hurting them?
Many customers from outside these areas visit and experience the service
problems. That will enter into their decision-making process when deciding
whether to renew their service.
Carriers
spend a fortune on advertising, marketing and brand building, but in countless
areas around the United States they shoot themselves in the foot with these dead
spots.
Many
carriers and handset makers send me their phones to use and compare. While,
generally speaking, they all have good coverage, they all still have serious
black holes.
There
is a map of Hilton Head Island accompanying Mahan's article, which highlights
these dead spots. There are several, and they are large. There is no excuse for
this. This is the way the entire industry was a decade ago -- like swiss cheese.
Since then, the carriers have invested billions and improved service. Good. But
not yet good enough.
Today
it looks like carriers are upgrading their larger markets for all the whiz-bang
4G technology, and not filling in the dead spots in other areas to give people
basic connectivity.
I
guess it depends which lens you look through -- the investor's or the customer's
-- to decide whether this is smart or not.
Let
me give you a bandage till the problem is solved. Consider a Femtocell. Strange
name for a simple solution. If you have no cellular connection in your home or
office, and if you use a high speed Internet line, get one of the Femtocells
from your wireless carrier.
These
devices plug into your high speed Internet line at home or in your office and
give you a connection to your wireless network through the Internet. It creates
a little cell around the device only accessible by passcode and powered by your
Internet connection. It's not an open cell site, but it will give you coverage
if your home or office has a weak connection. This is only good for tiny spots,
though.
As
wireless moves from being a novelty to becoming a necessity, it is vital for
carriers to take this problem seriously. Otherwise, they will have to become
regulated by the government to improve service -- and that is the last thing
they want.
So
now is your chance to get it right already, guys.
I
talk with executives of all the wireless carriers and can say they really want
to have the best quality service in every area. That's when they wear their
customer hat. However, when they wear their investor hat, service takes a back
seat to profits.
Wireless
has become a necessity. This is not a joke. It's a matter of safety and
connectivity for the customer, and a matter of building, not destroying, the
brand reputations of companies.
So,
come on carriers. Step up to the plate. You need this as much as we do. Stop
just looking at the investor. Start looking to satisfy the customer. That, in
turn, will make your investors happy.
Give
us coverage! Hello... can you hear me now? Hello... hello... .
My
Pick of the Week topic is how the rich use technology. There are some
startling new numbers out on things like smartphones and big-screen TVs.
Fewer
than half of the richest Americans use these new devices. What?
Ipsos
Mendelsohn surveyed Americans with incomes over US$100,000 and found that new
tech like tablet computers, smartphones and flat-screen televisions are owned by
fewer than you'd think.
Nine
percent own tablet computers. That's up from 2 percent a year ago. Remember,
this entire sector is only a year-and-a-half old, though.
E-readers
win over tablet computers. Even though tablet computers get the big-dollar
advertising budget, e-readers are still outselling them.
E-readers
are owned by 13 percent compared to the 9 percent who own tablets.
Forty-five
percent own smartphones.
Four
percent use MySpace once in a while.
Fifty-nine
percent use Facebook -- greater than the 52 percent of the general U.S.
population who use it.
Eight
percent of the higher-income respondents use Twitter -- less than the 11 percent
of the general U.S. population who use it.
In
this world, the future looks brighter than ever for these new companies.
Of
course, after looking at all this, I would like to remind you that traditional
television, print and radio are still not only very relevant for the affluent
community, but vital.
Remember
when we thought the boring newspapers, magazines, television and radio were
supposed to fade away? Well they are still hot.
In
fact, the world of advertising and marketing and public relations has simply
expanded.
http://www.ecommercetimes.com/story/For-Analysts-Its-Deja-Vu-All-Over-Again-73337.html
http://www.ecommercetimes.com/story/73337.html
OPINION
For Analysts, It's Deja Vu All Over Again
By
Jeff Kagan
E-Commerce
Times
09/22/11
5:00 AM PT
What we're looking at is the beginnings of a new wave of activity in the technology space. Are you ready for it? What are key analysts saying about your firm? What are you doing to keep us up to date? When will you get active with the analyst community -- early on when you can discuss ideas, or later on when you are trying to put out fires?
Recently
I read in The New York Times that the phenomenon of the "star analyst"
is coming back into fashion. If Wall Street analysts, tech analsyts and telecom
industry analysts are getting hot once again, how can you get good advice and
good reviews from the analyst community? Let's discuss.
Then
in my Pick of the Week, I want to tell you about AT&T (NYSE: T)
Mobility offering their 4G LTE service in an initial five markets. This is
finally great news for AT&T.
Remember
the old saying, "you don't want the tail to wag the dog?" In the case
of analysts, the best time to start is now. It's important to start out on the
right foot. Don't wait till you have to put out fires. You would rather drive
the race car around the track, rather than being dragged behind it. It's your
choice whether you drive, or get dragged. Let me explain.
Analysts
simply share their thinking and opinion. They follow the news, companies,
technologies, investments and the competition. They either follow certain
companies and dig deep, or they follow the entire industry looking for the good,
the bad and the ugly, in Clint Eastwood terms.
Just
like the sequel of a favorite movie, there is another sequel starting in our
industry as well.
I
am writing about this because starting in the mid '90s, for better or worse, I
became one of those so-called star analysts.
It
seemed that as a telecom industry analyst, I was called by the media for a
comment every day. I wrote columns, attended meetings, gave speeches, wrote
reports and books. Many of the companies I followed were also consulting
clients, which meant I could offer deeper comments.
Let
me explain how this works. The noise was growing during the '90s. Everything got
very loud and very crazy. So many companies from the young Internet world, to
older and more established firms in industries like telephone, wireless and
cable television found that getting noticed, being heard and followed accurately
was increasingly difficult. Actually, that sounds a lot like today, doesn't it?
There
was so much to follow. And everyone seemed to be a winner in those golden years
of the late '90s.
Then
the early 2000s showed up, and the Internet bubble burst. Several newspapers
started to fold. Special tech sections dried up. Many new Internet companies and
websites seemed to disappear. Poof. Just like that.
Mainstream
companies continued to grow, but the spark of imagination was gone, for a while
anyway. IPOs, which were so numerous in the late 90s, dried up as well.
Executives went on trial. Money was lost in the stock market. It was a troubling
time.
We
watched the amazing rise followed by the agonizing fall. It was out of control.
In
that crazy world, a few of us analysts kept getting busier -- kept getting new
clients and new calls from the media. To tell you the truth, my business kept
growing larger than ever through all the dry times in the industry in the mid
2000s, which always amazed me.
I
was a telecom industry analyst, but I have since expanded my practice as a tech
analyst. I simply follow the changes in the marketplace, and there is plenty to
comment on in this noisy industry.
Reporters
still call daily to discuss stories they are writing. I share my opinion and try
and keep them on track. I even get quoted now and then, which is still a kick
after all these years.
The
industry has tried several times to re-boot itself. If you recall a few years
ago, the Google (Nasdaq: GOOG) IPO was one of those attempts. Then it got quiet
again.
Suddenly
things are waking up. Will it last this time? Companies are going public again.
Major industry changes are reshaping the services and devices and competition.
Just
look at how two non-cellular companies, Apple (Nasdaq: AAPL) and Google, are
transforming the wireless space. Incredible.
The
marketing and public relations and advertising are just as important as always,
but they look very different today.
Suddenly
there are so many new websites and Internet companies who are doing
exceptionally well. Social media is exploding. My phone is ringing, and the
media is writing more and more about this amazing phenomenon every day.
There
are so many really interesting companies to keep an eye on today that didn't
even exist a few short years ago, companies like LinkedIn, Facebook. GroupOn and
Pandora. And there are plenty more we will be discussing that are not even on
the radar yet.
Some
win and others lose. Just look at Netflix (Nasdaq: NFLX), a company who shot
itself in the foot. They went from winner to loser in a split-second. Will they
recover? Do they understand what they did wrong?
The
telephone business is reshaping itself, again. It's not going away, but it is
changing. It used to be seven baby bells. Then, after mergers, three. New
companies are joining the fold. Today the leaders are Verizon, AT&T,
CenturyLink and Windstream.
Cable
television companies like Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX) and
Cox are now offering phone service with VoIP and competing with baby bells
offering IPTV.
The
wireless world is just as crazy. Instead of dozens of smaller competitors, we
see fewer and larger companies like Verizon Wireless, AT&T Mobility and
Sprint Nextel (NYSE: S).
We
also see smaller firms like T-Mobile, US Cellular, Cellular South, MetroPCS,
Tracfone and many others. There are also several straight VoIP companies like
Vonage and Skype.
All
this new technology is causing the traditional baby bells like AT&T and
Verizon to lose phone customers in mass. Ten years ago they hit their peak with
local phone lines. The marketplace is reshaping itself, again.
The
wave has passed the traditional services, and a new wave has begun. Who will be
the winners and losers? Who will change the direction of the industry like
Google and Apple are doing in wireless? We are only in the early innings of this
game.
There
are also plenty of existing companies who can also do very well like IBM (NYSE:
IBM), Microsoft (Nasdaq: MSFT), Cisco (Nasdaq: CSCO) and so many more. Plus all
the computer and software makers. They are not part of this same IPO wave, but
they are important drivers in the industry.
Follow
the smaller and lesser known companies for the new ideas and innovation. Follow
the larger and older and more established companies for direction of the
industry.
In
this atmosphere there is quite a bit of noise again, isn't there? Getting heard
by customers, investors and the media is more difficult than ever. It's like
deja vu all over again.
It
is important for companies to break through the growing noise and chaos. They
have to stand out snf explain why they are different and growing and healthy.
There
is plenty of good and bad for each company to talk about. What will the focus be
on your company?
Suddenly,
star analysts are beginning to pop up on the radar once again. So buckle up, it
looks like this could be the beginning of another wild ride.
Here
is an important question for you to think about. What are key analysts saying
about your firm? How do you communicate with us? What are you doing to keep us
up to date?
Do
you even work with the analyst community? When will you get active with the
analyst community? Early on when you can discuss ideas, or later on when you are
trying to put out fires?
We
are watching the next wave reboot with IPOs and new technology innovation. It
looks pretty strong so far. All the ingredients are there. Are you ready for
this next wave? Are you sure?
Just
remember, the good times of the 1990s didn't last forever, and the bad times we
are living through today won't last forever either. It's a cycle.
It
looks like we are starting the next upswing. Reporters are calling on a daily
basis again for stories they are writing. That is usually accurate as a
barometer of things to come. This is a good sign things are starting to heat up
again.
Do
you remember the late 1990s when the world was all about the magic and new
technology and wealth? It was a time when everyone seemed to win. Investors,
workers, customers and partners as companies grew and expanded.
Well,
the starting gun has been fired again. Let's hope this is a long-term wave and
not just a short-term quickie.
Either
way, sooner or later the good times will swing back into fashion. They always
do. You can count on it. Are you ready?
In
my Pick of the Week I want to tell you about AT&T Mobility offering
their 4G LTE service in an initial five markets. This is finally great news for
AT&T.
Remember
around the first of the year when AT&T Mobility CEO Ralph de la Vega
suddenly said AT&T was entering the 4G marketplace? At that time he was
simply trying to keep up with competitors like Verizon Wireless, Sprint Nextel
and even T-Mobile.
AT&T
felt uncomfortable not being in the 4G space yet, so they suddenly called their
HSPA+ with enhanced backhaul "4G." At that time it was just a change
in the words they used. There was no real 4G service yet, and there wouldn't be
for months. Now they are starting.
AT&T
just unveiled the first five markets, Houston, San Antonio, Dallas, Chicago and
Atlanta, on Sunday morning. Don't expect service everywhere in those markets
yet. They have just started. AT&T says they will expand the LTE footprint in
those markets in coming months as well as launch new service in 15 more markets
by year end. Great start.
They
have four devices that are compatible with the new service. No, don't expect
your older devices to work with the new network technology.
The
good news is this new network will deliver faster speeds on the data side of the
network. If you have a need for faster service, this is for you.
It
will be interesting watching AT&T Mobility market this new service. Verizon
Wireless has a long head start in this new technology.
So
congratulations to AT&T Mobility. Welcome to the 4G world! We're glad you
are finally here.
http://www.ecommercetimes.com/story/The-Best-Cellphone-Network-for-You-Is--73285.html
http://www.ecommercetimes.com/story/73285.html
OPINION
The
Best Cellphone Network for You Is ...
By
Jeff Kagan
E-Commerce
Times
09/15/11
5:00 AM PT
Since AT&T suffers from the same low ranking, year after year, I am very surprised it has not yet fixed its problems. At this point, who knows if it ever will? Its focus seems to be on the investor -- and not on the customer and employee. So as long as investors are happy with its stock price, customers and workers will just have to deal with it or leave.
Which
cellphone network offers the best service for you? Simple question. The answer
is a lot more complicated. When we walk out of the house each morning, we make
sure we take our wallet, our keys and our wireless phone. We don't leave home
without them. Our phone is our connection to our world. However, all networks
are not equal. Some are better and some are worse...
My
Pick of the Week is a backup wireless phone for an unbelievably low
price: free. Well, almost free. I'll explain below.
So,
which wireless network is best? Consumer Reports publishes an annual report that
tries to help us answer this question. It looks at individual carriers in
individual states, and it also offers a big-picture ranking on a nationwide
basis. This may be the most comprehensive comparison most people will ever have,
and it's on the magazine rack at your favorite store right now.
It
is important to remember this Consumer Reports piece makes generalizations,
though, and it is not an accurate guide for everyone. What I mean is that it is
valuable if you have strong signal strength from all the carriers and can
compare them all on other factors.
However,
many of us don't have strong signals from all the carriers. If you do not, then
even the best carrier is not for you, because you will not be connected.
That
said, let's look at Consumer Reports' conclusions in this year's annual report.
On
a regional basis, U.S. Cellular is the best carrier overall -- if you are in its
region.
On
a nationwide basis, Verizon Wireless provides the best service for most people.
If
you have basic needs, either Consumer Cellular or TracFone may be your best bet.
This
isn't noted in the report, but TracFone is the parent company of NET10, Safelink
Wireless and Straight Talk. These companies don't have their own network. They
resell others, such as Verizon, AT&T (NYSE: T), Sprint (NYSE: S) and
T-Mobile.
Here
is the order of the top five carriers: 1) U.S. Cellular, 2) Verizon Wireless, 3)
Sprint, 4) T-Mobile and 5) AT&T. Some have improved, and others have stayed
at the bottom.
Interestingly
MetroPCS was not even mentioned. What does that mean?
Sprint
is turning itself around, and that is good news for its customers. Several years
ago, its service was not very good. In the years since, it has worked hard to
improve.
Verizon
Wireless is usually at the top and has stayed there. Good job.
AT&T
Mobility is usually at the bottom, and it has stayed there as well. Come on,
guys.
This
is not new. AT&T has been dealing with this kind of report for many years --
even before the iPhone troubles. I remember years ago, when Consumer Reports
first said AT&T had bad quality, I got lots of phone calls from AT&T
trying to put a better spin on the damaging headline.
I
told those callers the answer was to simply improve the company's service. That
was the only logical path. In fact, we can now look at the way Sprint improved
as an example.
However,
AT&T has stayed at the bottom with customers report lack of service, dropped
calls, and problems with texting and data.
On
the good side for AT&T, its rollover plan is a hit. I love it. If you buy a
bundled package but do not use all your minutes, you can carry the unused
minutes to the next month.
Since
AT&T suffers from this same ranking, year after year, I am very surprised it
has not yet fixed its problems. At this point, who knows if it ever will? Its
focus seems to be on the investor -- and not on the customer and employee. So as
long as investors are happy with its stock price, customers and workers will
just have to deal with it or leave.
This
is my take away from the Consumer Reports comparison.
If
you are a basic customer, one of the prepaid services may be best for you. It
will offer the lowest cost and very good service. Consider companies like
Consumer Cellular and TracFone, which rank at the top.
Prepaid
plans are actually growing in popularity. They cost less. They have no long-term
contracts. The downside is, the phones are more basic. If that is OK with you,
then these phones are great. The good news is they are also starting to
introduce prepaid smartphones.
If
you want one of the new super-hot smartphones today, then U.S. Cellular or
Verizon Wireless are your best bets for service and quality.
Remember
to check for signal strength where you spend most of your time. If those
companies don't offer strong signals where you are, then you can consider
Sprint, T-Mobile or AT&T, in that order.
The
first priority in selecting a phone is the network. Is there signal where you
spend your time? Check your home, at work, and everywhere else you regularly
spend time.
Trust
me on this. And to make your choice easier, simply eliminate the networks that
don't give you strong signal. This is the most critical part of your decision.
The
Consumer Reports piece doesn't address the cost of service -- just quality. So
here are some cost considerations.
Generally
speaking, both Verizon and AT&T offer the highest-priced services. Somebody
has to pay for all that advertising.
Next
is Sprint. Then T-Mobile. Then the assorted other smaller companies.
The
smaller the company, the lower the price -- it has to give you a reason to
choose it over the big guys.
You
can pay more than US$100 per month for service with the big guys or as low as
$45 per month with the smaller companies for the same unlimited service.
There
are also many other carriers in between that are not mentioned in the Consumer
Reports comparison. Cellular South is an example. I would be interested in
finding out how customers think about those companies as well.
Were
their rankings too low to write about, or are they simply too small? Then again,
U.S. Cellular took the No. 1 spot, so who knows?
Cost
could make a big difference in your choice. Of course, if you don't need an
unlimited plan, then you can pay as little as a few dollars every month for a
small bucket of minutes.
Some
carriers let you carry unused minutes to the next month. After several months,
you can have quite a bucket of minutes to use for only a few dollars every
month. Something to consider.
Hope
this helps you sort through the mountain of choices. Buying a wireless phone is
getting more complicated, but if you check which carriers have signals where you
spend time, and then evaluate your typical usage patterns, the choice gets much
simpler.
As
my Pick of the Week, I want to share a secret that will help make sure
you have a connection wherever you are: Get a second phone. That's right -- but
not a regular wireless phone. Get one of the prepaid phones with a zero monthly
cost. Let me explain.
With
pay-per-use services, you simply buy a phone, activate it, then turn it off,
stick it in your glove compartment, and forget about it until you need it. Just
make sure the battery is charged.
Choose
a prepaid plan that lets you pay nothing on a monthly basis unless you use it.
Then, depending on the network, you pay either a per-minute charge or a per-day
charge when you do use it.
I
recommend having a second phone tucked away for a variety of reasons. I do, and
I have used my backup phone more often than I imagined I would.
Make
sure it uses a different network from your regular cellphone. Occasionally, you
may find yourself out of the coverage area for your carrier, while others have
strong signals. You might want to be prepared in case there is a hurricane, or a
terrorist attack, or just a down or busy network. These things happen.
It's
always smart to have a reserve chute when you go parachuting, right? Just in
case the main chute does not open. Same thing here. If you rely on the always-on
connectivity of the wireless world, make sure you are always connected.
You
can find a wide variety of these plans from every carrier and the smaller
brands.
http://www.ecommercetimes.com/story/73234.html
OPINION
Let's Solve the Real Wireless Problem: Spectrum Shortage
By
Jeff Kagan
E-Commerce
Times
09/08/11
5:00 AM PT
If we are to survive, we have to come up with a bold solution. A wider hose. Otherwise the entire industry will face the same problems AT&T has been dealing with in recent years. So one idea is to take the spectrum back and pool it into a large group. Let every carrier and handset maker access it all. That way if one band is blocked because of heavy usage, the phone and the network can simply use another band. Simple solution.
Now
that the Department of Justice said no to the AT&T (NYSE: T), T-Mobile
merger, can we please start talking about solving the real -- and growing --
problem in the wireless industry?
It's
something that will affect every carrier and every customer in the years to
come. In fact this is the very reason AT&T wanted T-Mobile in the first
place: the spectrum shortage.
As
my Pick of the Week, I'll consider whether the Apple (Nasdaq: AAPL) iPhone will
be available as a prepaid device on smaller networks.
AT&T
wanted to merge with T-Mobile to solve its own capacity problem. It wanted to
get its hands on T-Mobile spectrum. The rest was just noise. Still, that would
have been only a temporary fix at best.
So
why does AT&T need T-Mobile's spectrum? Doesn't it have its own? Sure, but
remember all the terrible stories about the quality of AT&T Mobility's
wireless data network over the last few years? It simply doesn't have enough. No
one does.
The
reason is that during the last few years, smartphones like the Apple iPhone and
the many devices running Google's (Nasdaq: GOOG) Android OS emerged, and
wireless data traffic grew like crazy. This problem jumped up and bit AT&T
in the rear end.
Suddenly,
so many people were sucking so much data that the network could not handle it,
due to spectrum shortage. Spectrum is like the size of the hose. We need a wider
hose carrying more data for more customers.
A
couple good things are suddenly happening that may give us a little time to
solve this increasing problem. However, if we don't, then every carrier and
every customer will be faced with the same problem that's confronting AT&T.
It's
noteworthy that many of the terrible stories about AT&T Mobility's quality
seemed to fade away in the last few months. Why?
Perhaps
Verizon Wireless starting to sell the iPhone in the spring has something to do
with it. If so, then Sprint Nextel (NYSE: S) selling the iPhone later this fall
will give AT&T even more breathing room, at least temporarily.
That's
the good news. However, that reprieve will only last a short while before the
exploding smartphone and wireless data growth catches up.
Then
every carrier and every customer will suffer the same way -- just like in the
1990s, when America Online had a problem keeping up with demand and slowed the
Internet to a crawl as more customers signed up.
After
all, that's why AT&T announced its plan to merge with T-Mobile this spring
at CTIA. At that time, the company was taking it on the chin with all the
wireless data problems its customers were experiencing. It couldn't get ahead of
the demand curve.
In
the months since, the frenzy has calmed down. We have a little time to solve
this problem. However, it will not be solved with mergers. That's only a
bandage, and the box is almost empty. We have a broken bone that needs to be
set.
The
acquisition of T-Mobile would solve AT&T's immediate problem, but it would
not touch the larger, industry-wide problem.
Now
that the government has said no to the merger, AT&T should back away and
join with other carriers to focus on solving the larger industry problem.
What
solutions are there? Here are two ideas.
The
first one has to do with the spectrum the companies each own. Several years ago,
when the smartphone industry was young, the U.S. government thought it would be
a smart idea to auction off the spectrum. It raised billions of dollars, and
everyone was happy.
Then
the Apple iPhone and was born, followed by Google's Android OS, and that changed
everything we thought we knew about the smartphone segment. Suddenly there was
enormous data usage burdening the wireless networks. The number of apps grew
from a few hundred to a few hundred thousand in just a few years. Incredible --
but a price had to be paid.
Suddenly,
the smartphone solution was not so smart. Bottlenecks occured. There was too
much demand and too little spectrum.
If
we are to survive, we have to come up with a bold solution. A wider hose.
Otherwise the entire industry will face the same problems AT&T has been
dealing with in recent years.
So
one idea is to take the spectrum back and pool it into a large group. Let every
carrier and handset maker access it all. That way if one band is blocked because
of heavy usage, the phone and the network can simply use another band. Simple
solution.
A
second idea is something a new company is trying to do. LightSquared is building
a wireless data network and will sell capacity to smaller wireless carriers.
That would give smaller companies like Cellular South, U.S. Cellular, MetroPCS
and Tracfone the opportunity to offer the same wireless data services we see on
AT&T, Verizon, Sprint and T-Mobile.
In
fact, LightSquared could also serve those big carriers, making its network
available as backup when things get tight. More spectrum.
Simple
as that. Makes sense, right? Then why are the big guys trying to put
LightSquared out of business over the GPS issue?
That's
exactly what the big carriers are doing, LightSquared founder Phil Falcone said
in an interview on CNBC. It makes absolutely no sense.
It's
time to solve this serious problem. Build a solution already. Enough of these
stupid games. We have an industry at risk, damn it. The future of wireless data
is at stake.
There
must be plenty of other ideas in the marketplace as well. Now is the time to
start having this discussion and solving this problem -- before it jumps up and
bites us all in the rear end, just like it bit AT&T over the last few years.
After
all, the question is simple: Do we all want to face the same problems
experienced by AT&T and its customers? Or do we want to be mature and solve
this growing problem?
That
should be our industry-wide call. It's time to come together to solve this
problem. Then we can all win. Otherwise we will all lose and pay a terrible
price.
My
Pick of the Week: Will
the Apple iPhone go prepaid on the smaller networks? I am convinced the answer
is yes -- let me explain why.
The
iPhone was such an exclusive device when it was born several years ago. It was
available only for the AT&T network.
However,
earlier this year, Verizon Wireless began offering the iPhone. This fall, Sprint
Nextel will be selling it. T-Mobile is the only other major carrier left.
As
the price continues to drop on earlier iPhone models, it's becoming affordable
for even more customers, especially if they can sign up for a low-cost monthly
plan.
The
prepaid segment is strong and growing. So this is a natural evolution of the
product.
I
expect the iPhone to be sold as a prepaid offering by the big carriers, and then
by the smaller networks as well -- like MetroPCS, Tracfone, U.S. Cellular,
Cellular South and so on.
After
all, we are already seeing prepaid Android devices becoming available from these
smaller carriers.
The
only problem this raises is whether some of these smaller networks are capable
of handling the massive volume of wireless data that comes with these super-smartphones.
That
makes this an opportunity for Apple -- and it's not likely it will let it pass
by. It's not a question of if, just when.
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff Kagan is a tech analyst and consultant who enjoys sharing
his colorful perspectives on the changing industry he's been watching for 25
years. Email him at jeff@jeffKAGAN.com.
--------------------------------------------------------------------------------
http://www.ecommercetimes.com/story/Will-Apple-Still-Be-Apple-Without-Steve-Jobs-73190.html
http://www.ecommercetimes.com/story/73190.html
OPINION
By
Jeff Kagan
E-Commerce
Times
09/01/11
5:00 AM PT
Remember when Steve Ballmer moved into the CEO post? Microsoft was still a successful company, but something special was lost when Gates left. It lost much of its unique flavor and incredible story. It became just an ordinary company. Still large, still successful, but ordinary. Sometimes a CEO leaps past the position and becomes, in essense, the master brand.
We
knew this day was coming. Now that Steve Jobs is leaving, Apple (Nasdaq: AAPL)
will change. Apple has stood out during the last decade or more as an incredible
growth engine for customers, investors, workers and partners. However, it wasn't
just Apple. If Apple is the steak, then Steve Jobs is the sizzle.
How
important is the sizzle? Will Apple still be Apple? Without Steve, has Apple
lost its mojo? Will growth slow? Will innovation decrease? I'll share my
thoughts on some of these important questions and what they mean, because the
Apple we all know and love is going to change.
Then,
as my Pick of the Week, I'll review several next-generation smartphones.
The
short answer is yes, Apple will change. So much of its unique qualities came
from the sizzle that was Steve Jobs as CEO. There's history there. We grew up
with Steve and watched his successes and failures and his company's incredible
growth during the last few decades. And we wanted to be part of it.
Even
if Apple could find another iconic figure to lead, that person could not just
jump in and take the place of Jobs. It would take time. So it's simply not
possible for the company to remain unchanged. Perhaps over time, Tim Cook can
develop his own winning persona. The marketplace hopes that happens. However,
repeating the story of Steve Jobs is impossible.
The
real question is what is at the heart of Apple's success, and can that be
duplicated? What makes customers line up the night before a product launch to be
the first to buy? In other words, what makes Apple Apple?
I
think it's the same mystery shared by the Harry Potter stories and author J.K.
Rowlings, or Bill Gates and Microsoft (Nasdaq: MSFT).
Remember
when Steve Ballmer moved into the CEO post? Microsoft was still a successful
company, but something special was lost when Gates left. It lost much of its
unique flavor and incredible story. It became just an ordinary company. Still
large, still successful, but ordinary.
Sometimes
a CEO leaps past the position and becomes, in essense, the master brand.
Gates,
Rowlings and Jobs are a key part of the incredible success of these endeavors.
They are people. Individuals. They are the master brand behind the brand names.
Without them, these would just be ordinary companies. With them these companies
excel.
I
am so convinced of this that I think we should create an award like the Academy
Awards to recognize these excetional corporate leaders. Unlike stars, with whom
we have no real connection, these are the real champions who reward investors,
workers, customers and partners.
I
have worked with every major competitor in the space over the last 25 years. As
much as their plans and strategies seem rock solid, the industry shifts and
everything changes every few years. It has always been that way and will always
be that way.
With
that said, I think Apple will lose its luster and become just another company in
the mind of the marketplace. However, I also think it will remain strong and
viable and at the top of the list, at least for several more years. It will lose
an important something since Steve Jobs will not be there feeding the fire as
the master brand.
This
opens plenty of questions going forward. Will Apple have another personal master
brand? What will Apple look like a year from now, two years from now, five years
from now? What about competitors? Does this open the door for another company to
win the hearts of the marketplace? If so, which is the next Apple?
Remember
when Google (Nasdaq: GOOG) entered the marketplace? At that inflection point,
companies like AOL and Yahoo (Nasdaq: YHOO) led the way. Now Google leads on
every front.
The
same kind of opportunity is here, right now, in this space. So will there be
another great company that will rise when Apple fades? Perhaps. Which company
will that be?
As
for Apple, I still think it will remain a leader, at least for a while. It
currently has loads of happy customers, and it still has another year or two of
innovations in the pipeline. It will continue to amaze us for a while.
It
is impossible to predict what this marketplace will look like beyond a few short
years. Don't forget, the Apple iPhone began the transformation of the wireless
industry only four years ago.
Since
he got sick several years ago, we all knew Steve Jobs' days at Apple were
numbered. We all expected and hoped the company had plans to hand off the
leadership role. Those plans are in play now.
Apple
has done everything it could do. Now the rest of the story has to be written. So
what is the future of Apple?
No
one predicted the changes that have happened in the past. No one predicted the
iPhone or the transformation of the industry.
Today
the same opportunity and challenge exists.
So
what is the next big wave of innovation for Apple? It transformed the industy it
played in -- from music, to smartphones to tablet computers. Will Apple continue
to transform industries going forward? If so, which is next?
The
story is not over at Apple. We have just finished a chapter and are beginning
the next. It is still a gigantic and very successful company and will remain
that way, at least over the next couple years. After that, well, we will just
have to wait and see.
To
Steve Jobs: You have
earned the respect, admiration and friendship of the world during your journey.
You have inspired each of us to stretch into the beyond. You are a real
inspiration and have become the sunshine in our industry.
For
my Pick of the Week, I'll share some initial thoughts on several
next-generation smartphones that I'll be reviewing in the coming weeks.
I
am impressed with RIM's new BlackBerry models. I have a few BlackBerry phones
that use different carriers. They are available on all the majors -- Verizon
Wireless, AT&T (NYSE: T) Mobility, Sprint Nextel (NYSE: S) and T-Mobile.
So
far I have to say I am impressed with the new BlackBerry 7 OS. The features you
have grown to love are all still there. Some have larger touchscreens and others
have smaller screens, but with a combined touch and keypad. Remember when a
BlackBerry was just a BlackBerry, and they were all the same? Things are
changing fast, and for the better.
Verizon
Wireless sent me a new BlackBerry Bold, which is an incredible device. This
newly upgraded Bold is a regular looking BlackBerry with both a touchscreen and
a keypad. It is thin and light, and I like it a lot.
I
also like the BlackBerry Torch from AT&T Mobility. I do not yet have the new
4G version; however, my understanding is that it's the same device with a faster
browser. The big screen is still easy to see and use, and it has a slide-out
keyboard.
The
Torch on AT&T has a bigger screen then the Bold on Verizon, but it is also
larger and heavier. Take your your choice.
They
say the new version of BlackBerry 7 OS provides a faster Internet connection. I
will test, but I did not see the dramatic difference I expected.
While
it is an improvement, the problem is that the Web browsing still falls flat
compared to Apple's iPhone. It simply transfers your Favorites to your
smartphone, making it easier to find what you want.
Hopefully
the next version of BlackBerry software will offer an improvement on using the
Web.
The
next Apple iPhone should be coming out soon as well. This year, it is available
on two networks -- Verizon Wireless and AT&T Mobility -- and it's rumored to
be coming soon to Sprint Nextel. How about that! One year ago, it was only
available on one. Which carriers will the iPhone be with next year?
The
wireless industry and the smartphone sector have been changing. Over the last
four years, it has become a completely new place. Unlike a few short years ago,
when the iPhone was it, today there are countless devices including an
assortment of Google Androids from just about every handset maker.
As
exciting as these devices are today, they will be old news by next year in this
fast-changing industry. More to come.
--------------------------------------------------------------------------------
E-Commerce
Times columnist Jeff Kagan is a tech analyst and consultant who enjoys sharing
his colorful perspectives on the changing industry he's been watching for 25
years.
http://www.ecommercetimes.com/story/73140.html
http://www.ecommercetimes.com/story/What-Sprint-CEO-Dan-Hesse-Should-Do-Next-73140.html
OPINION
What Sprint CEO Dan Hesse Should Do Next
By
Jeff Kagan
E-Commerce
Times
08/25/11
5:00 AM PT
SBC transformed itself from the last place weakling to first place powerhouse seemingly overnight. Look at AT&T now. It's bigger and badder than ever, and growing rapidly. Why can't Sprint do the same thing now? Why does it even need Comcast or Time Warner? Why can't it take the big and bold steps it needs to take to reinvent itself into a giant overnight?
I
don't get why companies today take so long to make deals. Just do it already.
The latest rumor is about Sprint Nextel (NYSE: S), Comcast (Nasdaq: CMCSK) and
Time Warner (NYSE: TWX) Cable acquiring Clearwire (Nasdaq: CLWR). Of course, we
have heard of other Sprint rumors over the last few years that didn't pan out --
like acquiring T-Mobile. Dan Hesse, the CEO of Sprint, waited too long to pull
the trigger on that one, leaving Sprint out in the cold. So will Sprint swing
this deal or not?
Some
say the decision whether to acquire Clearwire will wait till after the AT&T
(NYSE: T) merger is complete. Why? Even if AT&T and T-Mobile don't get
together, this Sprint Clearwire deal still makes sense -- doesn't it?
Clearwire
basically started life as a Sprint product. Then, to spread the risk, Hesse spun
it off and got other investors like Comcast and Time Warner involved. This was
smart, at the time, since Sprint was wounded. Clearwire's path into existance
was strange, and its marketing even
stranger, but it grew -- intially, anyway.
Now
it seems like it is traveling in the slow lane as competitors like AT&T,
Verizon and T-Mobile roll out their 4G plans. Today, Clearwire is sinking into
second-rate status, fading into the woodwork without a big brand name behind it.
If
this is Sprint's 4G network anyway, then just acquire it already. What good will
waiting do? Another carrier may jump in and acquire it before Sprint can. Deja
vu?
Damn.
Watching these timid moves drive me crazy. What ever happened to bold CEOs
taking the helm and steering their companies through the churning waters across
the finish line?
CEOs
like Ed Whitacre of SBC. Remember him? He tried to acquire AT&T when it was
still big and strong in the late 1990s. Reed Hundt, the FCC chairman at the
time, called that deal "unthinkable," and the offer was withdrawn.
Of
course, he did end up acquiring AT&T a handful of years later, when the
industry had changed and AT&T had shrunk to a mere skeleton of its former
self. But he got the brand name.
Whitacre
was a pistol. That's the way CEOs used to behave -- the way they should behave
today. Taking bold steps and doing big deals, and transforming both their
companies and the industry.
Remember
how SBC started as the smallest Baby Bell? Remember how AT&T was dying on
the vine? Remember how Whitacre pulled several companies together, seemingly
over one hot summer a few years ago? Remember how SBC acquired AT&T,
Bellsouth and Cingular -- then changed the name of the entire new company to
AT&T?
That
was one of the biggest and gutsiest moves we have ever seen. They should teach
that move in CEO class at college. We should be seeing more of these gutsy
plays. Today however, everything seems too quiet and sedate and orderly.
Enough!
Its time to shake things up. It's time for another Big Bang! Sprint should take
advantage of these uncertain times and turn itself into a big-time player, and
transform the industry as well. It could quickly grow from a small time player
into a powerhouse. It is being done by other companies -- just look at
CenturyLink and Windstream for example.
SBC
transformed itself from the last place weakling to first place powerhouse
seemingly overnight. Look at AT&T now. It's bigger and badder than ever, and
growing rapidly.
Why
can't Sprint do the same thing now? Why does it even need Comcast or Time
Warner? Why can't it take the big and bold steps it needs to take to reinvent
itself into a giant overnight? Don't ask me. I don't understand why it hasn't
already.
Sure,
Sprint had a rough few years. It changed CEOs twice. It has been slowly
recovering and rebuilding. Now that the AT&T deal has taken T-Mobile off the
table, Sprint seems backed into a corner once again. Why, for crying out loud?
Wake
up Sprint! Your only chance of coming out of this alive is to come out swinging.
Stand up and take bold, decisive, company-reshaping moves -- today. This is
important for workers, customers and investors. This is not just a game.
As
for Comcast and Time Warner -- who knows? This Clearwire deal does not seem
important to them right now. Does Sprint need them to strike this deal? They can
always buy from Sprint if they want the service.
Dan
Hesse should be thinking bigger and bolder that that. The world has changed in
the last several years since Clearwire was formed. Sprint's thinking needs to
catch up.
The passion in this deal must come from Hesse. If he shows bold leadership, Sprint has a chance to be great. If. So let me pose this question: What would Ed Whitacre do? That's the kind of fire we need to see more of today.
Congratulations
to my Pick of the Week, LightSquared, for bringing in a public relations
guru to try and clear the cluttered path that is piling up during the last six
months. If you read my column last week, you know that is exactly what I
recommended it should do.
Terry
Neal is the company's new senior vice president of PR and communications,
reporting to Chief Marketing Officer Frank Boulben. The question is, can Terry
turn the public relations ship around? It has been heading in the wrong
direction fast.
LightSquared
has spent the last six months trying to put out countless fires ignited by the
GPS industry. It has not been focusing on building the company's name and image
in the marketplace. It has not been ingratiating itself with carriers, customers
and investors.
In
fact, if you were to ask people on the street, they either would have no idea
what LightSquared is, or they would say it is hurting the GPS industry. There
would be nothing about the solution it presents to our wireless broadband
problem. This is a disaster. Now the company has to spend enormous time and
energy just trying to dig its way back up to zero. Only then can it start to
build.
The
first thing to do is to plug the hole, then try to rebuild. Provide new story
ideas to the media so they can write about truthful things that will also be
helpful to LightSquared. Inform the marketplace on the growing industry problem
that LightSquared will solve.
There
have been countless stories written about the black eye AT&T Mobility has
suffered over wireless data problems. LightSquared could help erase it. However,
most are not aware of this.
LightSquared
could also help smaller wireless carriers offer the same wireless data services
as Verizon Wireless, AT&T Mobility, Sprint Nextel and T-Mobile. That is the
story that should be told. Along with defending its position on the GPS issue.
So
good luck, Terry. I have worked with many firms over the years and seen many hit
a home run and others wither. You have a mountain of a job ahead of you. The
future of the company is riding on your shoulders.
Hopefully,
Terry Neal can solve the LightSquared GPS problem and solve the growing PR
problem that has been developing over the last six months.
http://www.ecommercetimes.com/story/Lightsquared-Must-Survive-73099.html
OPINION
By
Jeff Kagan
E-Commerce
Times
08/18/11
5:00 AM PT
The industry continues to go down the same old, tired path, with no solutions as the capacity problem grows. All companies want to do is continue merging to get their hands on more spectrum. Lightsquared has a new idea. Rather than continuing to push back against the Lightsquared plan, we should all be trying to figure out how to make it work.
Enough
already with the crappy and negative stories about Phil Falcone, Sanjiv Ahuja,
Lightsquared and the whole GPS problem. This is a company and a technology and a
solution that we need. It is designed to fix the growing wireless data problem
many of us are already experiencing.
So
why isn't Lightsquared leading with PR messaging about how it will transform and
improve the industry and the service? Instead it is simply reacting to negative
GPS stories. It is not driving -- it is a passenger. This is a mistake that
could be very costly to the company if it's not corrected soon, as I'll explain.
My
Pick of the Week topic is the huge Google (Nasdaq: GOOG) and Motorola
merger announced earlier this week.
I
must confess I am as guilty as everyone else. I started last year writing about
the new Lightsquared and talking about the great idea it was. There were
challenges, of course, but it was a brand new company and an exciting new idea.
We
all hear the horror stories about the quality of an AT&T (NYSE: T) wireless
data call. We know it is only going to get worse, and we need a solution. So
this new company makes sense -- so far.
When
we learned about the impact of Lightsquared's technology on GPS, I thought the
company should put on the brakes until the problem was solved.
Now,
though, it appears there is an inordinate amount of negative press surrounding
this GPS problem, creating an environment that makes it difficult for a new
company to succeed.
Lightsquared
is now spending its time fighting the negative stories instead of leading with
its messaging of how it can help the industry. It lost control of the public
relations process.
However,
if we pull the camera back, it becomes apparent that this issue is larger than
one company. This is about the entire industry. It's about every customer.
Think
about the capacity problem AT&T has been wrestling with for years. Think
about this being the reason it wants to merge with T-Mobile. It needs more
spectrum and capacity.
Lightsquared
is a brand new company. A brand new idea. If it works, it will solve a growing
industry problem.
Instead
of attacking it, we should be supportive. Now is the time we should roll up our
sleeves and help it solve the interference problem with GPS.
Then
let the company jump into the marketplace, and let's see what it can do to help
the industry.
Why
Lightsquared doesn't focus on this positive aspect in its public relations I
don't understand. It is reacting, not leading. Right now, it is being dragged,
kicking and screaming, through the mud.
The
battle with GPS is not the story. It is just a pothole in the road to
Lightsquared's success. However, it is making a big public relations mistake by
allowing itself to be defined by that issue.
By
the time it solves this problem, its image in the marketplace will be severely
damaged. It is already going in that direction. The time to act is now.
So,
to founder Phil Falcone and CEO Sanjiv Ahuja, let me say this: It's time to turn
your approach around. It's time to start thinking and talking like the winning
new company you say you are. It's time to lead and not follow in the PR battle.
What you do next will decide whether you turn it around or not. You decide.
It's
time to turn up the positive heat on your PR and marketing
and let the world know about the incredible and positive solution you are
creating to solve our growing capacity problem.
Welcome
criticism. Welcome ideas from the industry to solve the problem. Don't fight it.
Use it. Turn the noisy marketplace into your partner, not your adversary. Get
everyone on your side.
The
solution is that simple and that complex.
Currently
you are being played -- positioned as the bad guys. The cowboy dressed in black.
The
media is happy to continue to portray you that way because there is an absence
of anything good to write about. That's your job. Knock, knock... anybody in
there?
The
truth is, Philip Falcone saw this brewing capacity problem years ago and has
been thinking about and working on a solution for a long time. He is a real
visionary in the industry, and he is not even from the industry. That's the
amazing story that should be told. Sometimes the best ideas for solutions come
from outside.
Falcone
never had to worry about PR before. He comes from the hedge fund business. That
lack of public relations understanding is hurting him.
The
industry continues to go down the same old, tired path, with no solutions as the
capacity problem grows. All companies want to do is continue merging to get
their hands on more spectrum. Lightsquared has a new idea.
Further
merging, like what AT&T is doing with T-Mobile, may be a mistake. We are now
at the point where major mergers in this space could be anticompetitive and have
a negative impact.
This
spectrum problem will continue to worsen. We need a solution without more
mergers.
Rather
than continuing to push back against the Lightsquared plan, we should all be
trying to figure out how to make it work. Come up with solutions so it can get
started in the marketplace solving this capacity problem.
Lightsquared
is not a threat. So why is it positioned as almost evil? That's because the GPS
industry positioned it this way and the media didn't have anything else to go
by.
That
wrong image is what it has to fix, and quickly. This negative opinion of
Lightsquared in the marketplace will mean the company is worth less. That means
when the time comes for it to have an IPO, it will be lower than it could be.
So
let's keep our eye on the ball. Remember the growing problem in the industry
that we cannot ignore.
We
are only in the early innings of this new smartphone revolution. We watch as
Google and Apple (Nasdaq: AAPL) transform the space. As more users buy
smartphones, and as more people use wireless data services, this capacity
problem intensifies.
So
the industry needs a solution. Come on Lightsquared, it's time to step up and
turn your public relations around. It's time for you to lead. Be positive.
It's
time to stop following and reacting. It's your job to talk to the industry about
the positive side -- about the solution you want to offer.
Turn
it around before it's too late. Get the world on your side.
Lightsquared
has to happen. We need the solution the company wants to offer. And if
Lightsquared is successful, others will follow.
If
we don't help it become a real competitor and solve this growing wireless data
capacity problem, I am afraid we will be sorry.
My
Pick of the Week is
the deal Google and Motorola Mobility (NYSE: MMI) announced earlier this week.
I
must have gotten dozens of calls from reporters looking for comments on this
story. The reason is these non-cellular companies, Google and Apple, are
suddenly transforming the wireless industry.
Four
years ago, everything was calm in the wireless industry. Then Apple and Google
jumped in, and the industry hasn't been the same ever since.
The
industry has completely transformed itself in the last four years, and I think
this is just the first inning. Buckle up, because this is going to be fun and
exciting to watch.
I will write extensively about this in coming months, but for now let me say congratulations to both Google and Motorola. Great move!
http://www.ecommercetimes.com/story/ATTs-Runaway-Growth-Days-May-Be-Numbered-73054.html
http://www.ecommercetimes.com/story/73054.html
OPINION
By
Jeff Kagan
E-Commerce
Times
08/11/11
5:00 AM PT
AT&T today is a very large and very complex organization compared with seven years ago. A company this large and complex is difficult to successfully manage and grow -- especially when yesterday you were one of the smaller and more nimble players. It has done a great job with growth so far, but it now may be stretching past its comfort zone.
Did
AT&T (NYSE: T) just get chink in its armor? Something curious and
interesting may be happening at the phone giant. Its growth seems to be slowing,
according to the latest quarterly results. I watched Verizon for something
similar that would show a trend in the industry, but its growth still looks
strong.
So
what's the problem? Historically both companies seemed to ride the same Wave. So
either Verizon will soon start to slow as well, or this is an AT&T problem.
My
Pick of the Week is an upcoming Wireless Technology Forum general
meeting in Atlanta focusing on Wireless Healthcare & Medical Services.
Both
AT&T and Verizon are in the same business. They have changed and grown on a
similar track over the last few decades. However, they do approach the
marketplace differently, and that difference may be starting to show up in the
numbers.
They
have both been on the growth side of the Wave that I have talked about. However,
AT&T appears to be reaching the top of its Wave, while Verizon is still
climbing. What happens next depends on what AT&T does next.
First,
it is important to understand what makes AT&T tick. Let's pull the camera
back and take a refresher course. It is not the company many think it is.
AT&T
has been with us for well over a century. In the early 1980s, it was forced to
break up. It became the long distance giant and was competing with MCI and
Sprint (NYSE: S). Then, in the late 1990s, it started competing against the Baby
Bells and lost. It shrank, and was just a very small player by the early 2000s.
Gasping
for breath, and on its hands and knees, AT&T was acquired about seven years
ago by the smallest Baby Bell, San Antonio, Texas-based SBC, then run by CEO Ed
Whitacre. Around the same time, SBC also acquired BellSouth (NYSE: BLS) and
Cingular.
This
instantly transformed SBC from the smallest phone company to a giant. Then
Whitacre retired, and Randall Stephenson took the reins as CEO and transformed
everything else about the new company.
He
moved it to Dallas and changed the positioning and attitude of the entire
organization virtually overnight. The new company looked very different.
So
AT&T is actually a supersized SBC with a new king-sized attitude. SBC used
to be a smaller and very active -- yet warm and open -- company, focusing more
on the employee and the customer.
The
company is now different, and its focus is on the investor. Now it is colder --
a stranger to the workers, customers and the marketplace -- and the difference
is noticeable.
Ralph
de la Vega, who came from BellSouth, runs the wireless operation. He may
eventually become CEO of the entire organization.
Stephenson
and de la Vega are trying to run a suddenly huge company. Typically, a company
grows to this magnitude over time, but this was a sudden transformation.
This
is an incredible challenge and opportunity, but keeping all the balls in the air
can be quite difficult.
As
I travel, speak and attend meetings, I run into AT&T executives, workers and
customers on a regular basis. The employees come from a variety of companies
that are now AT&T. While the company is still growing, there is a problem
that I've noticed and written about several times.
The
question is will this problem continue to grow? So much depends on whether
AT&T recognizes and fixes it. Unfortunately, there is no sign of that yet.
Perhaps
that will change. This quarterly report may be just a nudge in the wrong
direction, but it should feel like a sledgehammer to them if they recognize the
warning signal. These are icebergs in the water, and it was hidden icebergs that
brought down the Titanic.
AT&T
today is a very large and very complex organization compared with seven years
ago. A company this large and complex is difficult to successfully manage and
grow -- especially when yesterday you were one of the smaller and more nimble
players.
It
has done a great job with growth so far, but it now may be stretching past its
comfort zone.
Companies
should focus on the employee and the customer first. Keep them happy and the
company will be strong and growing. Then the investor will also be happy.
When
a company focuses on the investor first, it cuts out the worker and the customer
-- and that is a long-term recipe for trouble. I have heard some pretty
disturbing stories on this front from AT&T workers and customers.
I
would say this is a very important problem that AT&T needs to successfully
address, and quickly.
The
Wave tends to rise, then fall. AT&T has successfully reinvented itself and
created a new Wave. Remember, the local phone business was growing in the 1990s,
and then it slowed with competition.
AT&T
changed its focus, acquired other companies, and started to focus on the next
Wave, which was building wireless and television. It has been successful with
this so far.
Can
it succeed again again? Yes, but rather than seeing the problem, it seems to be
blaming the slowdown on the market.
If
that is the case, why isn't Verizon having the same problem? Perhaps it will
over the next quarter -- who knows, at this point? However, it is still growing
strong, so this seems to be an AT&T problem.
I
have worked off and on with AT&T over the last few decades. I have gotten to
know many executives. I hope the company continues to do well for the sake of
everyone involved, including workers, customers and investors.
I
guess every once in a while, we all need a wake-up slap to realize we are on the
wrong path.
So
AT&T, with respect, SLAP!
My
Pick of the Week is an upcoming Wireless
Technology Forum meeting on Wireless Healthcare & Medical
Services.
You
know how exciting this new world is becoming and how this has been a key
interest of mine, so I want to let you know about it.
The
meeting will focus on some of the new wireless networks, systems and devices
that are becoming key elements of our healthcare system. Participants will
discuss how wireless technology is reinventing the healthcare industry.
Remember,
we are only in the very early innings of this new game. There are enormous
opportunities ahead for both individuals and companies.
This
panel will discuss some key ideas in the wireless medical solution space. I
think this will grow into one of the hottest segments of the wireless and
healthcare world.
Speakers
will be Mathew Grubis, the CE of communications and information at GE
Healthcare; Praveen Chopra, the CIO of Children's Healthcare of Atlanta; Rick
Allen, the executive VP of Gwinnett Medical Center (north Atlanta); and Joel
French, the VP of Motion Computers.
This
event is sponsored by GE Healthcare. If you will be in the Atlanta area on
September 15, you should stop by.
Let
me know of new and interesting ideas you see developing in the wireless and
healthcare field. This game is just getting started.
http://www.ecommercetimes.com/story/Verizon-Workers-on-Strike---Who-Will-Win-73028.html
ANALYSIS
By
Jeff Kagan
E-Commerce
Times
08/08/11
8:19 AM PT
If Verizon doesn't make some changes, its expenses will be higher than competitors. That means it will have to charge more. That means it will lose business. And that means it will have to cut even more workers, and everyone gets hurt. After all, one of the things customers look for is the lowest price. They won't pay more for phone service just to take care of Verizon workers.
Verizon
Communications [NYSE: VZ] is struggling through yet another strike. Actually,
all the workers, customers and anyone who touches Verizon are also struggling. I
have commented on these strikes many times over the last couple of decades. What
is happening is unfortunate, but it's a necessary part of the process as the
industry changes.
First,
will there be long-term repercussions for workers, investors and customers?
There hasn't been in the past, so the Verizon brand should be OK as long as this
is settled quickly. Customers don't like it, but they are relatively used to it.
Like it or not, this has long been the way phone company employees negotiate for
a raise.
On
the other hand, there was no competition until the last decade. Now there is --
from cable television companies, wireless companies and Voice over IP companies.
Will customers suddenly decide now is the time to make a change? Yes, I think
more will. That will make matters worse.
The
telecom industry is changing. It has been in transition over the last few
decades. We are communicating differently today. There is good and bad to that
new reality.
The
local phone business is shrinking. It was growing through the 1990s -- but
during the last several years, it has been giving way to competition and new
technology. Remember the Wave theory I regularly talk about? This is a perfect
example.
Local
phone companies have watched their traditional local phone business drop like a
rock. Verizon local phone service has crossed over the top of the Wave and is
now on the downside.
Other
parts of the Verizon business -- like wireless and FiOS Internet and television
-- are growing. That is the new model. These sectors are on the growth side of
the Wave.
So
what does that mean to all the long-time Verizon workers who are now fighting
for their financial lives? I have met with many workers over the years and feel
for them on an emotional side. After all, they are people with families and they
relied on promises made. We all understand how earning less hurts.
However,
on the business side, I understand that Verizon has to make some changes in
order to remain competitive and continue to grow. If it doesn't, its expenses
will be higher than competitors. That means it will have to charge more. That
means it will lose business. And that means it will have to cut even more
workers, and everyone gets hurt.
After
all, one of the things customers look for is the lowest price. They won't pay
more for phone service just to take care of Verizon workers. Especially not
during these trying financial times.
So
even though Verizon is still growing and healthy, when you take a closer look,
only parts are growing and healthy. Other parts are shrinking on the down side
of the Wave.
As
hard as it is for workers to accept, this is the problem that companies like
Verizon must address. It's not only Verizon; many other companies whose
businesses are also changing are wrestling with the same issues.
Customers
and investors love the changes. On the other hand, workers don't -- because of
what it does to their earnings.
Over
time, workers have seen their income and benefits rise year after year. However,
that world cannot sustain itself any longer as the industry continues to change
and non-union competition increases.
So,
what's the answer? The company and the workers both have to understand the needs
of the other and negotiate a solution that neither is really happy with -- but
that both can live with.
That's
the only real solution. And they should also prepare for more of this wrestling
down the road, because for workers on the downside of the Wave, things are only
going to get rougher as the years pass.
http://www.ecommercetimes.com/story/Why-Cant-Motorola-Get-Its-Act-Together-73004.html
http://www.ecommercetimes.com/story/73004.html
OPINION
By
Jeff Kagan
E-Commerce
Times
08/04/11
5:00 AM PT
Is Motorola cool? The truth is no, and that is its big problem. It was on the upside of the Wave, the growth side, through the 90s. It used to be cool. Remember in the mid 1990s, when the coolest handset was the StarTac? The marketplace has changed, and Motorola is struggling with this new space. Just like in the movie "Austin Powers: The Spy Who Shagged Me," Motorola has lost its mojo.
Motorola
(NYSE: MOT) Mobility is one of the industry's more interesting stories. It is a
story of rags to riches to rags, again and again. It was the leader in the
wireless handset market for decades. Then it lost its way in the 1990s and has
not had a long-term recovery since.
Through
partnerships with Google (Nasdaq: GOOG) and Verizon, it seemed to be getting
some traction under its feet again. Things were starting to look better at the
company helmed by CEO Sanjay Jha.
However,
as the industry continues to move ahead, suddenly Motorola is starting to get
lost at sea again in a battle of big brand name super smartphones. When you walk
into any store, you will see countless Google Android phones made by different
manufacturers.
In
addition, Verizon Wireless is no longer focusing just on Motorola, but rather
promoting its entire line.
Is
Motorola getting ready for another downturn? Why? Where is its problem? After
all, the industry continues to grow. Will it ever recover?
I'll
address these very interesting questions, with an eye on how they impact other
previous leaders like Nokia (NYSE: NOK), RIM and Palm/HP.
As
my Pick of the Week, I'll tell you how WindStream is continuing its growth Wave
by acquiring Paetec.
Since
Motorola lost the No. 1 spot in the 1990s, it has only had two upward bursts --
one in the early 2000s with the Razr, and now another with Google Android.
Can
Motorola recapture its greatness as a leader in the handset market? Sure, anyone
can. After all we have witnessed two non-wireless competitors, Google and Apple
(Nasdaq: AAPL), jump in, change the marketplace and continue to lead.
The
big question is WILL Motorola recapture its glory days? The answer, as far as I
can see today, is no.
Understand
what I am saying. It's not that Motorola can't. It just don't have the right
mindset. Of course, that could change at any point -- if.
The
marketplace is very different from when Motorola led in the 1990s. Today it's
all about big name brands and smartphones and the Internet and apps. It's all
about being new and cool and amazing. About touching the customer in new ways.
Is
Motorola cool? The truth is no, and that is its big problem. It was on the
upside of the Wave, the growth side, through the 90s. It used to be cool.
Remember in the mid 1990s, when the coolest handset was the StarTac? The
marketplace has changed, and Motorola is struggling with this new space.
Just
like in the movie "Austin Powers: The Spy Who Shagged Me," Motorola
has lost its mojo.
How
can it get its mojo back? That is the big question and challenge Moto faces
today. What is Moto? That was the re-branding effort of several years ago that
seems to have faded away.
So
the problem is simple. Moto has no mojo. At least not now. Not yet. This does
mean it understands the problem -- just not the solution.
Here
is a major homerun branding and advertising idea for the company: License Austin
Powers and through your advertising and marketing , start telling the story of
how Motorola lost its mojo, and how now it is battling to win it back.
Create
an entire set of ads, commercials and messages. Involve the audience. Win them
over. Get them on your side. Create entertainment with your messaging.
Then
watch your numbers climb as Moto gets its mojo back. Be playful. This is one way
to build a killer refreshed brand with a name like "Moto."
Remember,
the marketplace is much different from the 1990s. So for Motorola to succeed,
once again, it has to think out of the box. New rules.
Who
and what are Motorola today? How is it different from its competitors? Why
should customers like it and love its technology?
These
emotional questions are left unanswered, and that is the problem. It's the
emotional connection that is missing. People buy and don't buy based on
emotions. Period.
Motorola
has to focus on the brand as well as the technology. The problem is it never
knew how. Does it even understand the "brand magic" that has built
competitors like Google, Apple, Samsung, HTC and others?
What
has Motorola done differently to create excitement and buzz? It was never a
marketing company. It was always a very fortunate cellphone company until it
fell off the track.
What
Motorola needs is to be a brand marketing company. It means thinking in a
completely new way. The wireless industry is changing. Yesterday you walked into
a cellphone store and bought.
Today
you can also walk into a Best Buy (NYSE: BBY), Radio Shack, Apple Store, grocery
stores, pharmacies and tons of other retailers. Today it's a marketing game.
Today it's all about the brand. The emotional connection.
Apple
and Google, of course, are tech companies, but first they are marketing
companies. They capture the imagination. Everyone is excited about how they are
changing the industry. People love these companies.
This
is the next generation of branding. Is Motorola changing the industry? Not
anymore. Not for a long time.
It
is not alone, however. All of yesterday's leaders are struggling with the same
problem. Companies like Nokia and RIM and Palm/HP also have the same challenge.
These
were never marketing companies. They didn't need to be in the 1990s and early
2000s. Today they do, however -- and because they are not, they are struggling
in the fight for their lives.
As
the industry changed over the last five years, they have all been left behind.
They do not have a forward-looking brand. They don't understand the branding
aspect of the business -- the emotional connection to the customer. Because of
this, they no longer lead.
So
what is the industry all about today? It's about the sizzle, not about the
steak. If you can't capture customers' imagination with the sizzle, they will
never taste the steak. This is the reverse of the way the market worked 10 years
ago.
So
these companies need to reinvigorate their brand. AT&T (NYSE: T) did after
SBC acquired the failing long distance company several years ago and turned it
around with completely new and different ideas and thinking.
Either
transform your brand or create a new brand and build that to effectively compete
with today's winners.
Of
course you must have cool and cutting-edge technology. You have to lead instead
of follow. You must have killer Web browsers and be easy to operate. You have to
challenge and tickle and delight the customers.
That
is the playground where success is found today. Even if your steak is much
better, much juicier, much tastier than the others -- without the sizzle, no one
will ever know.
As
my Pick of the Week,
I want to tell you about WindStream acquiring Paetec and continuing its runaway
growth Wave story.
WindStream
is the fourth largest local phone company, and it has been growing very rapidly
through acquisitions over the last few years.
It
started out as Alltel, a smaller local phone company. A couple years ago, Alltel
broke up into a wireless and wire line company. The wireless company kept the
name "Alltel" and was acquired by Verizon Wireless.
The
wireline company changed its name to "WindStream," transformed itself,
and has been on a tear ever since acquiring companies right and left and growing
like crazy.
It
offers business and consumer telephone and Internet service, and it resells
satellite television.
It
still doesn't offer wireless, though. I think it is just a matter of time before
it gets into the wireless business -- but it maintains that wireless is not in
its future. We'll see.
This
Paetec deal really beefs up WindStream's business services in more markets
nationwide.
You
can imagine both CEOs, Jeff Gardner of WindStream and Arunas Chesonis of Paetec,
must be very happy indeed. Congratulations, guys.
As
for WindStream... yes we are sitting and waiting for your next big acquisition.
Who's next?
http://www.ecommercetimes.com/story/Saving-Your-Company-From-a-Brand-Wave-Wipeout-72959.html
http://www.ecommercetimes.com/story/72959.html
OPINION
Saving Your Company From a Brand Wave Wipeout
By
Jeff Kagan
E-Commerce
Times
07/28/11
5:00 AM PT
All customers are not early adopters. Executives tend to forget this. The problem comes when companies take away what customers love and introduce something totally new. This may please a slice of the consumer pie, but it also tells a larger slice they are not important. Turning your back on the customer like this costs you business. You break up the long-term trust and relationship you have carefully been building.
We
always think the next generation is better. Often that is true -- but too often,
it's worse. On the heels of success, too many companies take their eye off the
ball. Every year, new and improved versions are introduced to keep us
brand-loyal. That works until something goes wrong. Then years of valuable brand
building simply collapse.
This
up-and-down movement is the Brand Wave. We see this implosion too often with
just about every brand. I'll illustrate this trend with several examples and
suggest some remedies.
Then,
in my Pick of the Week, I'll you about ZocDoc, a new company that is
making it easier to set an immediate appointment with a doctor wherever you are,
whether at home or while traveling.
I
mention the Wave frequently -- this time, I'll focus on the Wave in relationship
to your brand.
The
Brand Wave builds as a company does things right and continues to grow on the
upside. Then it always seems to take its eye off the ball and hurt the brand
value. That starts their journey down the other side.
Why
do so many companies spend years building a valuable brand relationship with the
customer and then lose it overnight? I don't think they realize the damage they
are doing until it's too late.
They
start out hungry. Work hard over years to build strong relationships. Then they
begin to believe they are greater than they actually are. They start to believe
their own story and they take their eye off the customer.
It's
not part of a corporate plan, but it does happen, because executives love to win
and eventually forget what brought them success.
They
take their eye off the ball. No executive would choose to damage the brand and
lose business. Yet it happens every day to countless executives, companies and
brands.
This
costly mistake is made too often by either changing the focus and design, or
through new and different versions of products or services that many existing
users don't like or want.
Basking
in the glow of success, executives forget the ultimate judge is the customer --
period.
When
a company lowers quality and reliability, its customer relationships are
damaged. That means instead of just buying the next version of your product,
your customers will shop around for a competitor's brand. This is the serious
problem you want to avoid. You want them to love your product and simply replace
it with a newer model.
Also,
when a company radically reinvents the design of its products and stops
producing what existing customers have grown to love, it is saying "sorry,
we are moving on, with or without you." That attitude tells customers they
are no longer important. This is another serious problem. You have to
continually court your customers -- it's much like a marriage.
You
might ask what company would say goodbye to a large percentage of its customer
base? Yet it happens every day. After a few years of success, every executive
feels certain about what customers want.
They
seem to forget it took years and money to build good customer relationships, yet
it only takes a moment and a bad decision to lose them.
If
you think the competitive marketplace is pressuring you to create a radical new
design, fine. Add that new design to your offerings, but don't take away what
your customers have grown to like about you. Let customers continue to be happy
buying what they know and want.
All
customers are not early adopters. Executives tend to forget this. The problem
comes when companies take away what customers love and introduce something
totally new. This may please a slice of the consumer pie, but it also tells a
larger slice they are not important.
Turning
your back on the customer like this costs you business. You cannot force a
customer. When you try, you break up the long-term trust and relationship you
have carefully been building.
Tell
me the companies or products you can think of that fit this broken model. Here
are a few personal illustrations -- I am sure you can think of your own handful.
Hamilton
Beach built a very strong brand relationship with me. I finally found a coffee
maker I loved, the Brew Station. I could have been a Hamilton Beach customer
forever.
However,
a few years after creating this perfect design, the company changed it to save
money. The new version was thinner and felt cheaper. It was more difficult to
use and messier. Water and coffee drips on the counter.
This
was suddenly no longer a good product. Hamilton Beach broke the long-term
relationship it initially built with me.
Perhaps
since the new model cost less to make, it thought profits would be higher. What
the company missed is that I am no longer happy. So I may not buy from it again.
That means Hamilton Beach loses.
Another
example is Palm. As an analyst, companies send me phones on an ongoing basis to
use and compare. Until about five years ago, Palm was my favorite because of the
simplicity and design -- it had the features I needed.
Each
version of the Palm OS was a little better than the last, and I was very happy.
I considered myself a long-term Palm user.
What
did Palm do? It changed the operating system to webOS. It did more, and had
additional features, like GPS, but I did not like it as much as the original
version.
The
worst part is, it stopped making the Palm OS devices, and I was suddenly dealing
with a new OS that I did not like as much.
It
turned its back on all its happy customers who loved the Palm OS. It should have
continued to update the Palm OS while introducing the new webOS and let the
customers choose.
Since
then, Palm failed and was acquired by HP (NYSE: HPQ), which is trying to
resuscitate it. It is using the webOS in its new tablet computers and
smartphones. Palm users loved the earlier devices but felt abandoned by the
company.