What Apple’s Competitors Learned From the iPad 2

  “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]