What Apple’s Competitors Learned From the iPad 2

| Hidden Dimensions

  “All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” — Sun Tzu  

In previous years, Apple taught its field sales force from a book by Rick Page called “Hope is Not a Strategy.” Apparently, that’s the focus of the iPad’s competitors right now: hope.

In order to sell a product effectively, you must understand the deepest problems of the customer. That means, in the case of salesmen, productive and ongoing technical discussions about what causes them real pain. Once you show the customer how your product makes their pain go away, the sale is the easiest part of the process.

Modern, post-PC era customers have a lot to cope with. They suffer from constant suspicions about the companies they deal with, difficulties using the products they buy, information overflow, limited funds, and assaults on their privacy, even identity. By creating a product that solves these fundamental problems, Apple’s sales job is essentially over. The product sells itself.

I want to dwell just a little bit on some of these elements.

Which Path? You can go with this…. you can go with that…

Jealousy Breeds Inept. Modern American technical life consists of companies that are not always well run, suffer from inferiority complexes, and always feel that the grass is greener on the other side. I had that feeling when Amazon branched out into tools, food, and clothing, but they made it work. Many other companies aren’t so successful. That’s why we have so many Apple imitators. The delusional thinking is kind of like, “Gee, if we only sold iPads, we’d be rich too!” The result of this is customer suspicion about the company, its motives and its commitment.

For example, if a company that sells industrial solvents decided to get into the wine business, but didn’t make a commitment to a separate facility, I’d worry about them mixing up their production processes. In fact, this has happened in a similar fashion to a few companies. Customers can smell halfway measures a mile away.

Self-investment Pays. The old-school of competing with Apple was to compete on price. Very little in the way of R&D is required to build a PC these days, so very little money needs to remain at the company’s team level. This results in creative organizations that are starved for R&D funds, but the fat cats at the top can rake in the cash. Carried to its logical extreme, Proctor & Gamble could have gotten into the PC game, bought commodity parts, slapped a well known OS, Windows, on to it, and probably made money. No R&D money would have been necessary. Dell is a perfect example of a PC era company: high on commodity, short on genuine R&D as the DNA of their business.

In the post-PC era, learning organizations tend to leave a lot of money in the hands of the R&D people in order to out-create and out-think the competition. In the case of the iPad, which is an emerging market, the final instantiation of the tablet concept is still years away. We’re making changes leaps and bounds, from the A4 to the A5, changes in iOS, UI development, and we’re still learning how people want to use their tablets. That requires a boatload of money at the engineering levels.

As a result, PC era companies that have rolled the money up to the executives instead of down to the R&D teams are finding that they are forced to compete on specs instead of competing with technologies that solve the fundamental customer problems listed above. By contrast, Apple spent ten years developing the technologies that make life better for both developers and customers. As they say, luck is when preparation meets opportunity.

Fraternity is Social. Apple has maneuvered itself into the enviable position of being a company that is not only cool, but cool to be associated with. The elegance of Apple products, the design and quality, has finally sunk into a generation brought up on word of mouth via texting, tweeting, and Facebook. Which would you rather do? Visit cranky old Grandpa in St. Louis (the PC), or go to Disney World? (the iPad.) Kids today are as adamant about their belief in Apple as IT managers of yore were about Microsoft.

It’s no longer sufficient to advertise a product with deceptive claims and try to fool the customers while making some fast money. Young people are increasingly verbal, sarcastic and merciless on vendors who don’t deliver on commitment. Apple’s retail stores, on the other hand, are a visible outward sign that Apple is willing to engage its customers, teach them, and solve their problems. As I said above, when the customer pulls out that credit card, it’s not grudgingly. Instead, it’s a stamp of approval that their problem is hereby solved. Swiping the card is a no-brainer afterthought.

The Final Hope

We’ve seen how 70 percent of iPad 2 customers are first time iPad customers. They were holding onto their money, not convinced that Samsung and Motorola were the answers to their problems. Really, now. Do we buy wine from an industrial solvent company? Do you buy a baby car seat from Lockheed Martin? Do you link your entire home information infrastructure, digital hub, and tablet life to … Motorola? Customers make an estimate of what camp they want to be in, and right now, that camp is Apple. It’s almost a no brainer, and that explains the long lines and Apple’s enormous wealth.

Hewlett Packard is the only company left that has a shot at challenging Apple for tablet supremacy — with its TouchPad. HP has the size, resources, manufacturing capacity, and breadth of product line to tackle the problems of people in the post-PC era.

When a jealous company decides to play in another major competitor’s sandbox, they must estimate how much effort is required in technology development and marketing. It’s always a game of catch up, and sometimes products are released before they’re ready, like the Xoom with it’s non-operating SD card slot. It’s a tricky business deciding how prepared you are to go to war.

In the case of Hewlett Packard, they can do cool things with product interactions and solutions. Beat up on Apple with tablet printing. Include compelling cameras. Make it easier to swap files.  Work more productively with publishers. Focus on equivalent levels of customer security and delight. Spend millions on ad campaigns, backed up with genuine customer support.

But, as in war, there’s always that last moment of lingering hope. “Have we done enough? Are we prepared to fight Apple? Indeed, are we willing to go to any lengths? Sure, we know how to build a tablet, but do we know how to sell the tablet? Can it sell itself by taking away the customer pain? Do we understand the customer’s decision making process?”

Somehow, I get the feeling, as I watch Apple’s competitors, that there’s a lot of hope brought on by the realization that they’ve spent decades not really focusing on the fundamental problems of the customer the way Apple has. Otherwise, Apple would have never needed to conceive of the iPhone. Right now, Apple’s competition, out of time by virtue of the iPad 2 release, is forced to hope for the best, and hope is not a strategy.

[Image courtesy iStockphoto]

Comments

Lee Dronick

Great article John!

xmattingly

Visit cranky old Grandpa in St. Louis (the PC)

Hey, now. I take exception to comparing a trip to St. Louis to a cranky old man. Or a PC.

Why not make that comparison to Denver instead? :D

John Martellaro

smattingly: Denver is such a cool town - it never occurred to me!

Lee Dronick

Why not make that comparison to Denver instead?

The mile high senior’s club?

Substance

What, St. Louis isn’t cool enough for you?  (On second that, maybe I don’t want to hear that answer to that…) smile

Substance

St. Louis comment aside, GREAT article John that combines a lot of your previous thoughts into one cohesive tome.  I’ve forwarded this on to several friends to give them real insight into why Apple is where they are today and how behind their competitors are.

anovelli

Great article… the only point I would make differently is that the “70%- first-time iPad buyers are often those shorter of resources or with less technical needs to buy v1 products from Apple. Everyone knows it’s a better investment feature-wise to wait for v2 or even v3. With the iPhone, it was hot from the start since millions of us wanted a more integrated lifestyle and a device to create a more seamless digital environment. iPad is still less a workhorse than an iPhone or a MacBook Pro as the market is still evolving, so I think many have waited out v1, especially for FaceTime, which to me seems the reason the device was developed in the first place.

skinnybear

Visit cranky old Grandpa in St. Louis (the PC), or go to Disney World? (the iPad.)

John, I liked the article but as a Grandpa in St. Louis, I bought an iPad2 and I have been to DisneyWorld. You can have both the wonderful city and the iPad.

Perhaps the competitors are in Fantasyland.

mhikl

Anytime you can find a Dell flaw quotable, JM, you have my attention.

For such important articles I make short cribs for focus and assimilation. ? So many companies cause and live off other?s pain. The pain is caused by ill-designed products. Apple doesn?t pill-design for the ills of others, they design products that don?t evolve pain.

What you write is word concentrated and idea converging. Never a quick read, I come away spent but full.  (This could become a haiku)

Lee Dronick

What you write is word concentrated and idea converging.
Never a quick read,
I come away spent but full.?

(This could become a haiku)

It is nice as is.

MOSiX Man

I seriously doubt that HP will ever make a tablet even remotely as good as the iPad. The company has stockpiles of the resources you listed, but no longer has a soul. I’ve tested software and peripherals on a wide range of their laptops, and none of them have any real originality, organic style, or creativity. There is no real differentiation between any HP PC and any other Windows PC. Maybe they will sell a lot of TouchPads, but I doubt that many customers will return for a TouchPad 2.

John Martellaro

No one caught my references to “Weapon of Choice” in the caption. Shame.

Lee Dronick

No one caught my references to ?Weapon of Choice? in the caption. Shame.

I wasn’t familiar with the Christopher Walken movie. I thought you meant this video, but I had done enough damage for the day so I didn’t make a post.

mhikl

I thought that would be strategy by which the art of every game and war is won but I’m way off.
But it went over my head- Sir H I didn’t see the movie either and crafty assertions usually stick

Your article is the perfect complement to John Gruber’s first iPad 1 article in MacWorld referenced in his iPad 2 article you directed us to a while back, I believe.

Nom

I seriously doubt that HP will ever make a tablet even remotely as good as the iPad. The company has stockpiles of the resources you listed, but no longer has a soul.

There was a time where “HP” meant “reliable”.  I bought an HP LaserJet 2100 about 11 years ago. Since then, it’s had several toner replacements, one drum replacement, and occasionally gets fussy about paper feed, but is still working pretty well.  These days, I’m not confident that an HP product will last out the year.

furbies

No one caught my references to ?Weapon of Choice? in the caption. Shame.

I did!

furbies

There was a time where ?HP? meant ?reliable?.

There was, wasn’t there.

I’m still printing to a HP 5MP, connected via a Parallel to USB adapter to a NAS.
Every year or so I replace the toner cartridge when the toner starts to leak, but apart from that, it just keeps on printing! Damm it! Why won’t it die!
Then I can justify a new directly networkable printer.

I’ve also got a Apple Laserwriter 16/600 that keeps on going too.
It’s connected to my network via a AAUI to Ethernet Adapter.
it uses a HP toner cartridge, so I assume the guts are HP too ?

Pashtun Wally

I think people are missing something fundamental here, which plays right into John’s point (I think) - iPad is not a tablet.

Most of the criticisms are based on what it leaves out…and what Apple left out of the iPad are the very things that would make it a different creature entirely.

A tablet computer would be as much a computer as a desktop PC, just a (very) different form factor.  iPad, OTOH is a device:  not stand-alone, requiring management by a non-device, or computer.  All the peripherals, etc. that tie into a desktop can tie a laptop to a desk just as efficiently, but at the cost of mobility.  The iDevices in contrast CANNOT be trapped that way:  it’s not their size, their weight or their dimensions that make them truly mobile, it’s their design, which removes “traditional” impediments to simply grabbing it with the rest of your gear, and going.

Once it’s synced and charged, we don’t pack a bag of accessories for it like we were taking the kid to the park, we just grab it and go.  Every iDevice has this quality.

Competing against iPad et al by offering products that compromise this quintessential mobility is a bad plan.

aardman

Another gem of an article Mr. M.  There’s nothing more anyone can add to it.

Nemo

John:  All this praise for your instant article.  Well, I won’t try to gild the Lilly with more praise.  I will simply observe that sometimes, hope is all one has.  Whether, under Mr. Apotheker’s leadership, HP has the taste, vision, and commitment to do more than hope in battling Apple’s iOS devices with its Web OS devices, remains to be seen.

wab95

John:

Let me chime in as well. Excellent article. An enjoyable analysis that ticks all the major boxes. Well-spotted on Dell and HP.

The war analogy is highly appropriate. Most wars (perhaps even battles) are lost, not on tactics, but on strategy. Many a general/admiral has gambled on tactics, allowing themselves a false sense of security based on a tactical advantage, and confusing the short-term gains from those tactics with the long term benefits of a comprehensive strategy.

I remain convinced that Apple’s competition not merely lack a comprehensive strategy for their post-PC tablet arsenal, they have yet to formulate the basic question, “Where are we going with this and what is our ultimate objective for this device?”. Instead, they rely on features and specs, which for many consumers will be appealing in the short term but not in the long run if there is not a plan for those devices. They have to be proactively adapted in timely refreshes to keep pace, not with where the technology is today (which is what most appear to be doing, with features like SD slots and USB ports) but where the technology is anticipated to be in both near and long term.

I don’t think these competitors have the first clue as to why they are not where Apple is (and no, it’s not only because they started late; they have no bearings), but just how far behind they really are.

I, for one, would welcome a closer competition in terms of alternative design and strategies, which would push the technology; but for that, we need a competitor not simply with resources, but with a vision of where, independent of Apple, they want to take this platform.

John Martellaro

I liked Steve Jobs’s comment, re: MBA: “If the MacBook company were a separate company, how would we compete against the iPad?”

wab95

?If the MacBook company were a separate company, how would we compete against the iPad??

My point exactly.

xmattingly

smattingly: Denver is such a cool town - it never occurred to me!

smartellaro: It’s because of all the cool theme parks in Denver, right? smile

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