October 16, 2007

I’m kind of enjoying a new trend in consumer electronics. The iPhone has been the most obvious example of a new way that consumers approach products.  Seems that what a company offers is no longer sufficient and consumers are fighting to make products into what “they should be”.  In the case of the iPhone, the off-the-shelf product has been limited somewhat in terms of functionality.  One can only use it with one carrier without hacking it, and when it comes to web-browsing, Apple does not allow any third-party apps to be installed (this could include games, word-processing, whatever).  Of course, users of this device immediately saw potential for it that Apple was working hard to keep from being realized.  In the case of being limited to one carrier, it was clear that Apple had a contract with AT&T and they were going to have to make efforts to keep users from going to other carriers if they hoped to share in the money.  So, the phone is locked, and hackers immediately set about finding ways to unlock it, and they were successful.  Then Apple upgraded the firmware, causing unlocked phones to suddenly stop working (forever), and with voided warranties the customer was completely out of luck.  This dance is going to continue as long as the hackers have the energy.  The blocking of third-party apps is a little weirder, since it just seems to be a fact that Apple doesn’t like the idea of supporting a product that might get messed up by someone’s poorly built app … or something. (they seem to be okay with this happening on one’s home computer).

This  interests me because it points to a significant change in the way consumers view products.  People looked at the iPhone, thought that it was pretty cool, and were quickly able to see the potential of the thing.  The fact that Apple wasn’t going to realize the potential of their new product didn’t matter to anyone … they were going to make this product achieve it’s potential, whether Apple liked it or not.  Hacking like this leads to all kinds of debate:  Do people have the right to alter a product once they’ve purchased it?  Does Apple have the right to control what their product does and maintain their contracts with other companies?

For me, what this points to, once again, is the fact that companies are out of touch with their consumers and the changing market.  In this case, somewhat surprisingly , the usually cool Apple is beginning to look a little more like their less-cool competition, offering products that sort of make the consumer happy, but not quite.  The parts that don’t make the consumer happy are completely arbitrary decisions about what one can and can not do (well, they’re not really arbitrary, but they’re based on conditions (like a contract with AT&T) that the consumer doesn’t give a rat’s ass about.  That is, the consumer understands that Apple has this contract, but doesn’t see why Apple’s silly decision to get into that contract should keep them from having the product that they want. Seems to me that companies should be taking this new attitude into account … because they will lose the battle in the long-run.  (if only I could find a way to get the package of TV channels that I actually want, instead of the ridiculous packages that I’m offered, I’d do that … oh wait, I already have figured that out).

An interesting example of someone having figured out the market is the release of the new Radiohead album.  This concept being employed is so brilliant and yet so ridiculously simple. These folks apparently actually looked at their environment and used their brains to figure out how to sell something in that environment (instead of trying to figure out how to create an artificially restrictive environment based on out of date retail models).  They are making the album available as a download, and one can pay what one thinks is reasonable.  (you see with digital … all payment is profit … you don’t have to press, ship, load and unload, pay overhead for a store etc … each download is profit except for bandwidth costs, I suppose).  Then, for the hardcore fans they are offering a box of goodies along with the download … it looks really nice even for a guy like me who isn’t  a fan.  This comes at a premium price, but fans will pay (I know, I pay premium prices for the bands that I am a fan of).  This is just plain smart, and rare in almost any business today. This band has looked at the market, looked at the ways that people are acquiring their music, decided what people want (and that there are actually different types of consumers out there), and put it all together.  I hope that they make a mint … and suspect that they will.


One comment

  1. You might enjoy the Cory Doctorow story “Other People’s Money”: http://www.forbes.com/home/technology/2007/10/13/cory-doctorow-fiction-tech-future07-cx_cd_1015money.html it’s tangentially related to your post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: