market trends

Sleight of Handset

cell-phone-innovation

As an advocate of innovation and an early adopter of all things technology, I am thrilled that my mobile phone can let me book a restaurant reservation, GPS me to a destination, take crystal-clear high definition photographs, check the stock listings, return e-mails and update my Twitter account.  I am not thrilled that it drops calls and distorts voices, especially when I’m talking to a client.

In the early years of brick-sized cell phones, pocket sized cell phones and flip phones that were small enough for dogs to swallow, we tended to forgive phone call quality in the name of amazing convenience.  But now, when I can even program my PVR from another country with my mobile phone, I am losing my patience.  In their furiously innovative stampede to add new functions to mobile phones, the telecom sector has distracted us from the appliance’s main purpose, which is having a clear conversation with another human being.

If I have an important phone call scheduled, my default device is a land line.  Such is the importance of nuance, tone of voice and even pauses, that a mobile phone just isn’t reliable or present enough to be sure that I’ve heard everything I need to hear.  What does this have to do with innovation?  Well, I guess innovation is also about getting things right.  The auto makers have done it with diesel engines.  Microsoft seems to have done it with control-alt-delete-free operating systems.  Now, in a personal appeal, I am asking telecoms to do the same thing with mobile voice communication.

I harken back to those wonderful Verizon commercials where a guy with a cell phone would find remote locations and ask, ‘Can you hear me now?’  A decade later, I shouldn’t have to ask the same question.  If you want a clear competitive advantage, cell phone companies, make a better telephone.

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How far can Apple fall from the tree?

Apple-Brand-Identity

The recent tumble of Apple’s stock raises an interesting question: How far can the price of the stock fall relative to the value of Apple’s most inherent strength, its ability to innovate?

No one knows exactly how much value investors attribute to a company’s innovative capacity and how much of that is reflected in the stock. Apple’s precipitous decline to $457.19 a share (January 29, 2013), compared to a 52 week high of $705, is more about ‘expectations’ for revenues and profits than the intangible of innovation. In January, expectations remained high despite the fact that Apple executives tried to downplay them. On November 26, 2012, John Dobosz of Forbes cited Marc Gerstein who had Apple as “Sell” and he said, “Apple stocks could slip further.” Now, after a quarterly report in which the numbers were good, just not good enough, the questions have started. Has Apple lost its edge? Will the competition make inroads? Why aren’t new products creating the same buzz? Has the bloom worn off the iPhone?

In the smartphone market, Samsung, who serves more of the lower-end market, has long been in Apple’s rearview mirror even though their phones outsold Apple in 2012, 233 million to 133 million. And Samsung’s fourth-quarter results exceeded expectations with an 89% increase in operating profit and 76% in net profit. Who’s hunting whom?

When it comes to innovation, Samsung’s approach is different than Apple’s. Simone Foxman, business writer for Atlantic Media’s Quartz, reports, “Samsung sees itself as less inventor than innovator. It builds on technologies already in the marketplace and remains open to others.”  That’s what I call ‘simple-adaptive’ innovation in that they develop products incrementally based on what they know rather than focusing on ‘disrupting’ the marketplace with transformational products. That’s Apple’s game.

Both simple-adaptive and focused-disruptive strategies work, and ideally companies want to be good at both. Now, for these two giants, it may be a question of whether Apple can become more incremental while maintaining its Steve Job’s transformational capability and whether Samsung can move beyond incremental and leapfrog into higher-end markets. It will depend a lot on their capacity to innovate. Time will tell. In the meantime, some expectation of their innovative capability will be evident in the stock price.

Innovation is in the DNA of a company and its people, and that doesn’t change with quarterly results. In Apple’s case, it may well intensify their innovative quest for the next game-changer. And when it comes to expectations, I wouldn’t bet on the apple falling too far from the tree that Steve planted.

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You Wouldn’t Change the Oil in Your Car Just Once a Year

Innovation Insights
One of a series by Ken Tencer, Spyder Works CEO

innovation-not-invention

Innovation is about bringing ideas to market rather than letting them languish on a half-forgotten scratchpad. And innovation doesn’t necessarily mean invention. More often, it’s about acting on an opportunity you have already recognized, or adapting existing solutions for other markets or industries.

How simple can innovation be? Consider these examples:

Seeing the same thing in a different way
Think of the publicity coup for Post’s Shreddies – and its 18-point gain in market share – when it reintroduced the timeless breakfast cereal in diamond shapes rather than squares.

Exploring new markets with the same products (or slightly adapted features)
Toy giant Lego has launched a “Lego Friends” brand to target girls in addition to its dominating “boy brands,” such as Star Wars Lego and Lego Ninjago.

Tapping into (or teaming up with) new market trends
Hyundai now provides a multimedia tablet as an owner’s manual instead of the traditional printed book.

Bringing together features from existing products or markets to create something “new”
The maker of SLAP Watch offers a unique twist on silicone watches with interchangeable faces, bright colours, and spring-coil bracelet – all in one item.

Innovation is the engine that drives your business forward. Think about it: customers are engaged by new and exciting products and services. It gives them something to talk about, a reason to buy again, and more often.

You wouldn’t change the oil in your car just once a year – the engine would sputter and die. Your company shouldn’t leave ideation, innovation or the introduction of new – even small – improvements to an annual schedule. Without the tune-up of continuing innovation, your business will also sputter and die.

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