Wednesday, February 6, 2013

No Wow Factor: Why new devices / consoles fail

The iPhone5 was the biggest phone launch in smartphone history, selling about 2,000,000 units on the first day alone, but it leads to a tumble Apple stocks, and a less than expected sales launch.

WiiU is a great system and with sales of over 3,000,000 units from launch to 2012 year end, Nintendo lowers their sales expectations, on lacklustre sales.

BlackBerry releases Z10 with great specs and brand new operating system that doesn't have a single line of code from the previous OS but the stocks fall immediately after the announcement.

What happened to these great products?  

Why haven't they lived up to their potential or the companies expectations?   

These great much-anticipated devices, like many before them, have effectively failed.   But why? How?  I can answer that in two words: Wow Factor. Or W.F. for short.

These products have failed where their predecessors reigned, due to a lack of a W.F.  The consumers want to be "wowed".  They want something new, they haven't had before.  They want something their friends and family don't have and want to see.

Sure, the iPhone is a great phone. A beautiful phone.  It sold millions at launch but failed to reach the lofty number of unit sales increase over the previous version, much like the previous versions did over their predecessors.  First weekend sales of iPhones increased 50 percent or more from version to version, except the iPhone 5 only sold about 25 percent more than the iphone 4.  A huge disappointment for Apple and investors.  Why did this lack of sales happen?  No W.F.  Sure the iPhone 5 have now had LTE, where the 4s did not.  But, most smartphones already had LTE.  This iPhone could now take panorama pictures, but my Nokia phone, released a year previous, was able to take panorama pictures.  Big deal.  Sure the iPhone 5 was lighter and smaller and thinner than most phones, but I hardly think that's a real selling point, especially now that phone screens were getting bigger and bigger.  Not to mention, the iPhone 5 had no way for the consumer to upgrade the memory, via a micro SD slot, nor was it's processor as fast as many of the newer phones on the market.  Only hard core Apple fans bought into this version of the iPhone and no one else.  People were no longer impressed by Apple.  Investors let Apple know as well, by selling stock like mad.  Anticipation for the iPhone 5 was so huge that Apple stock flirted around the $700 mark.  Since the iPhone 5 launch, Apple shares have eroded, trading below $500 a share (see chart below) - causing Apple to lose a huge chunk of market cap and relinquish the number one spot of world's most valuable company back to an oil firm.Others and investors were not.  No W.F.

The Wii U.  What can we say about the Wii U?  It's a huge upgrade from the Wii.  It's in HD. It has up to 32GB of hard drive space.  The controller allows some games to bring portions of their game to it, to allow for a more immersive game and add more TV screen real estate for the game.  You can even move certain games to the control pad so that you don't even need to use a TV.

However, the Wii U is a failure, so far.  Sure it sold over 3,000,000 units in a month and a half, but nowhere near what was expected of it in sales, forcing Nintendo to cut its forecast of sales for the most recent quarter.  Why is this great console not selling like hot cakes? Simple.  No W.F.  The Wii burst on the scene and will forever be remembered as one of the best selling consoles of all time.  It had two things going for it: the name Nintendo and a motion controller.  Nobody had used a motion controller for their console before.  It added a whole new element in gaming - you could now stand up and swing the Wiimote just like a real baseball bat.  Nintendo created a new immersive experience.  Gamers now had to stand up to play games.  You could stand up and exercise along to the exercise games.  You could use the controller as a steering wheel!  An actual steering wheel! The Wii U has all of this and not much more.  Sure the Gamepad is pretty cool.  You can play the game right in your hands, much like the DS.  Not to mention, on games like ZombiU, your maps and inventory list is on the Gamepad so you don't have to stop your game to switch menus.  Yeah - that's cool.  But overall, the Wii U is lacking a W.F. It doesn't stand high and above the competition.  It's internals are very similar to that of the PS3 or Xbox 360.  Games for the other consoles are making their way to the Wii U, but what the consumer wants right now in the latest console cycle is something better than the aforementioned HD consoles.  The only real difference is the Gamepad.  No W.F. Consumers are not impressed and don't want this console - only the hardcore Nintendo fans.  Not even the casual gamer is impressed, as they now flock to smartphones and tablets.

Finally, we have the new BlackBerry devices.  BlackBerry (formerly RIM), just held a conference to launch the specs and features of their upcoming smartphones the complete touchscreen Z10.  New to the Z10 is an entirely revamped, nay created, OS.  Apparently, not one line of the old OS is present in the BB 10 OS.  New, from the ground up.  The OS is a new system where Blackberry claims, "features and apps work seamlessly together and every move flows into the next."  You can even distinguish work from personal stuff on the phone, by keeping one private from the other.  It would be similar to having two separate profiles on a computer.  Even the keyboard is smart and predicts what you are going to type then you can swipe it into the sentence.     BlackBerry has also created a beautiful looking phone.  Mind you, you can only build a phone a finite number of ways - most are rectangular.  So, new OS.  Beautiful new full touch screen phone.  BlackBerry seems to be on the right track.  Stock have risen over 30 percent in 2013 leading up to the launch conference.  Soon as BlackBerry finished their presentation, stocks begin to slide.  And slide...on a daily basis.  Why?  No W.F.  The investors were not pleased.  BlackBerry has not shown us anything that made us go Wow!  It's still a great smartphone, but only a modest upgrade from today's phone.  Although, the BlackBerry Z10 is a vast improvement over their previous phones (Bold and Curve), even more than the iPhone 5 is over the iPhone 4S.  But, still no W.F.  While the investors have spoken, the consumer have just gotten their hands on the phones.  The phones went on sale this week in Canada (BB's home turf) and then releases around the globe in the coming weeks.  Will the customer buy the phone in droves?  I doubt it.  Maybe the few hardcore BB followers that are still hanging on to their old BB's.  I think BB will settle nicely into third place, far behind the battle lines drawn between first and second place Apple and Samsung  - iOS and Android. The BB Z10 is intriguing, but has no W.F.

We live in an age where consumers want the greatest and latest and they want more for their money.  While some companies sell well based solely on their brand name, ie. Apple and Nintendo, it seems that this is no longer the case.  Consumers want the W.F.  The W.F. is what brought the iPhone to world wide fame and selling tens of millions of them a quarter.  The iPad is another example of a product with a W.F., but the iPad mini had no W.F.  The Wii was, and still is, amazing.  It used a motion controller to perfection, which set it apart from other console makers.  The Wii U is only a minimal upgrade from the Wii.  No W.F.  Consumers expect more.  Companies need to invest in more W.F.  Simple enough.

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