April 4, 2010

Nerd-on-nerd mega-battle for smartphone supremacy

Posted in Management at 9:10 pm by Eamon Aghdasi

I can’t help noticing the Motorola Droid ads these days, mostly on TV and on billboards, and how strikingly different the product’s marketing strategy is from that of the iPhone. It’s remarkable, because from what I understand the Droid is an impressive product, perhaps the most impressive smartphone since the iPhone was released back in the summer of 2007.

Motorola and Google are promoting the Droid as raw horsepower-in-a-handheld. Their catchy slogan, which calls the Droid a “bare-knuckled bucket of does”, along with the TV ads featuring automated robot hands presenting in a rugged black backdrop, seems like the very opposite of Apple’s marketing strategy for the iPhone (or pretty much any of their products).

My first reaction to the ad campaign was to view it as just another example of tech companies failing to understand the customer and how that customer uses technology. The “user experience” which Apple understands so well and so masterfully weaves into its product design and marketing is where other PC and electronic good manufacturers have so famously fumbled. In the 1990s we saw a race, famously won by Dell via its revolutionary supply chain, to provide the PC with the greatest specifications at the lowest price. Unfortunately that game proved barely profitable, and even the winners like Dell ended up losing on the bottom line.

I didn’t fully get how bad Apple was abusing its competition in the user experience game until I interned there as an MBA student in the summer of 2007, the same summer the iPhone was launched. Almost weekly, the interns gathered to listen to a top executive speak, and by far the most interesting lecture was delivered by Johnny Ive, Apple’s user experience guru. One of his most entertaining stories was about developing the look and feel of the original iMac, which famously had a handle on the top. The handle, he explained, wasn’t to carry the computer around easily. It was to invite people to reach out and touch the computer and become phy7sically acquainted with it, after research had revealed a major psychological comfort barrier between the user and the machine.

It was amazing how most of us back at Sloan failed to get this. When we came back from our winter break the same year, we discussed the recently-unveiled iPhone in our first Strategy class. The idea got totally blasted. Margins in the mobile device sector are razor thin. They’ll cannabilize the iPod. And Apple just doesn’t do phones. I heard something similar about a year later, while waiting for an interviewer in a hotel lobby with some other Sloan students. One of them was chatting loudly with his friends about Apple computers. “They get killed in pretty much all the specifications!” he said confidently, apparently referring to hard drive size, RAM, processor speed, etc. He must have forgotten about the specification about whether or not people actually understand and enjoy using their computers.

Have the Droid people totally missed this? It seems like they have, although it’s hard to believe they could actually miss something so obvious, especially when Google is involved. When your marketing strategy is to present the product with black robot hands, who do you envision buying the product? And how well does this message resonate with the the dozens of millions of people who are forecasted to use smartphones for the first time in the next few years?

I don’t get it. But of course, it’s entirely possible that I’m missing something, and the Droid marketers are smarter than I think. Or maybe they’ve recognized that Apple does easy-and-approachable so well that the only people left to market to effectively are the tech geeks, and the guys drinking vodka with sexy robots.