The Boston Marathon raced past our office last week, a sure sign that spring is upon us. So in the spirit of spring cleaning, a few observations on the world of wireless and consumer electronics that I wanted to dust off and share:
- The Death of the Flip. As the proud owner of not one, but two Flip video cameras, I was saddened by the news that Cisco is shutting down its Flip unit. Some analysts are framing this as just another example of why B2B companies will never succeed in consumer markets, but I don’t buy that argument. I contend that the Flip was a well conceived, designed and marketed product that was simply rendered obsolete by the increasing ubiquity and staggering capability of smartphones. (In Compete’s most recent Smartphone Intelligence survey, we found 80% of smartphone owners are using their device to take photos and video at least once a month.) Cisco isn’t alone in this respect – companies like Garmin, TomTom, and SanDisk have also seen their target markets swallowed whole by smartphone vendors. Consider the data from Compete.com below. Unsurprisingly, unique visitor traffic to theflip.com is highly seasonal, with a modest spike in the summer and a much larger spike during the December holiday season. But what is surprising is the rate of decline; traffic in December 2010 was down 33% from December 2009, despite the fact that overall sales of consumer electronics increased year-to-year.
- Prime-time for 3D. And speaking of “staggering capability,” I had a chance to preview the HTC Evo 3D 4G at a Sprint event last month. The name is a mouthful, so I’ll spell out exactly what it means: HTC and Sprint are teaming up to provide a device that is capable of both shooting high definition 3D video, and wirelessly uploading that video content at 4G speeds. It puts a head-smacking amount of technology in the hands of consumers – and presumably will retail for $199 with a two-year contract. (Can you see now how the Flip might have a hard time competing with smartphones?) Sprint needs the Evo 3D 4G to be a blockbuster, especially now that Verizon Wireless has closed the iPhone gap, and Sprint has a good partner in HTC, which has continued to innovate at a blistering pace. But the biggest beneficiary of the new device is the whole genre of 3D video, which to date has failed to live up to expectations. We’ve said before that user-generated video will be the “killer app” of 3D, and Sprint & HTC look to have the first solution that will make it really easy to shoot and share 3D content.
- Differentiation in the Age of Android. I was fortunate to have breakfast with Motorola CMO Bill Ogle at CTIA last month, and one of the topics we discussed was how Motorola and other device OEMs can differentiate as Android continues to capture a bigger piece of the market. I suggested that one strategy would be “flexible” hardware design, where consumers can take one device, and through accessories and docking stations, transform it into another. Motorola is already leading the pack in this respect with the design of the smartphone-as-laptop Atrix, but I was curious to see how consumers respond to other form-shifting devices, like the Sprint Echo. The Echo is from Kyocera – a long-time provider of lower-end devices making the move up market – and its innovative dual screen approach is worth a double take. After largely favorable reviews in the Wall Street Journal and other publications appeared last week, we looked to see if traffic to the device landing page (now.sprint.com/echo) was on the rise. Unfortunately, the opposite is true – interest in the Echo was strong when the device was announced on February 7, but has declined steadily since, with no material increase as the launch date of April 17 approached. Are consumers confused by the dual-screen concept, unfamiliar with Kyocera as a brand, or just lukewarm to non-4G devices at Sprint?
- Worry in Waterloo? When reviewers got their hands on the RIM Playbook last week, most were not kind, to put it charitably. But as we wrote two weeks ago, RIM has the benefit of an extremely loyal following, and with early data suggesting that the Playbook will beat sales expectations, it looks like RIM is capitalizing on that fan base, no matter what the reviewers are saying. So does this mean smooth sailing for RIM now? Of course not. In a trend we first identified more than a year ago, interest in Blackberry as a platform has been steadily declining in recent months, as Android devices grow in number, price points and carrier availability. And despite heavy promotional support, RIM’s other big recent device launch – the Blackberry Torch – has failed to hold the attention of consumers. In Q4 2010, 76% of consumers clicking through on Torch campaign advertising failed to engage with content on the site – one of the lowest “click and engage” rates we measured in the device space last year.
Chris Collins leads the Technology & Entertainment Practice for Millward Brown Digital. In this role, Chris provides data-driven insights and strategic guidance to leading retailers, telecommunications carriers, consumer electronics manufacturers, and their marketing partners. Prior to Compete, Chris was a senior member of the Consumer Wireless team at Yankee Group Research and worked as a management consultant for Monitor Group and IBM Business Services. Connect with Chris on LinkedIn.