I love RIM, but man it sucks to see their stock get trashed yet again. Less than one year ago they had a share price of 85 bucks. Today, it's down to 53 bucks. Basically, if you've been a shareholder, your belief in RIM has left you with third-degree burns.
I myself got in at 69 bucks and I think I'll be cashing out now (I might wait for a modest uptick before selling, not sure yet).
So what's going wrong here?
Half the analysts praise RIM saying its shares should hit $90-100 before year end. Then you have analyst houses like Citi saying they see the stock hitting $50 bucks and maybe lower.
It's like having one doctor tell you that you're dying and the other telling you that you're getting healthier and healthier - it's crazy.
So yet again, what's going wrong here?
The simple answer is brand.
From a technological perspective Apple, I would argue, actually has less going for it than RIM. The iPhone is a bandwidth hog. The carriers don't like being beholden to a single supplier. The 'apps' is an over-hyped story, with most of them being utterly pointless and of no use. You have to use a virtual keyboard to type emails - the RIM qwerty is a thousand times better.
And yet, none of that seems to matter. Why? Because Apple has branded itself as the 'peoples' company. Its brand is about the human experience. Even their earlier commercials felt 'human' - they were funny or hip or fun or insightful. They weren't about speeds and feeds.
Even their more corporate product marketing feels 'human'.
Compare that to RIM's marketing, which isn't bad, but it's more about horsepower (kind of reminds me of those GM truck commercials).
So what you've got in Apple is a company that is speaking to what people want. They want to have 'fun', they want to be 'happy' - this is what drives most people to buy most of the things they buy, the belief that it will make their life more fun and make them happier.
Now, in the corporate world, it's very different. ROI drives most purchases. Service level quality drives purchases. I.T. management drives purchases.
But at the same time, the corporate world is also filled with human beings. And if they will be happier (and as a result more productive) with an iPhone, you can bet that capex will drift in that direction.
I remember when the blackberry was younger. It was a status symbol in corporations. If you had a blackberry that meant you were 'important' - you needed 24/7 connectivity.
But now? Everyone has a blackberry. But what's even worse, is that those who don't have a blackberry often have their own personal iPhone and actually like their iPhone more than the blackberry.
So the whole prestige of having a blackberry is gone.
So my two cents on all this and what's gone wrong? Basically it's brand. The 'cool' factor for blackberry is at an all time low and it's at an all time high for Apple.
Playing in to this 'human'-centric Apple approach is that they are constantly first to market. First-mover advantage is a big deal. They don't wait for people to get bored with their products before innovating.
Now, will they be able to keep this up for the next 10 years? The answer to that, I think, is whether they stay true to their brand. If their DNA is guided by innovation and creating fun, hip products, then they will. If they become complacent and simply churn their customer base with upgrades, then they will eventually peak and some new company will dethrone them.
What we are seeing in the smartphone market is that marketing matters.
Look, at the end of the day an mp3 player is an mp3. A computer is a computer. And a smartphone is a smartphone. Ultimately, there is a 90 percent overlap of functionality between various brands.
And even to the extent that someone gets out in front through first-mover advantage, over time everyone else catches up fairly quickly.
But once you establish brand dominance - when people view your products as a statement of who they are - that's when you can get so far out in front of everyone that you leave the pack behind.
I myself got in at 69 bucks and I think I'll be cashing out now (I might wait for a modest uptick before selling, not sure yet).
So what's going wrong here?
Half the analysts praise RIM saying its shares should hit $90-100 before year end. Then you have analyst houses like Citi saying they see the stock hitting $50 bucks and maybe lower.
It's like having one doctor tell you that you're dying and the other telling you that you're getting healthier and healthier - it's crazy.
So yet again, what's going wrong here?
The simple answer is brand.
From a technological perspective Apple, I would argue, actually has less going for it than RIM. The iPhone is a bandwidth hog. The carriers don't like being beholden to a single supplier. The 'apps' is an over-hyped story, with most of them being utterly pointless and of no use. You have to use a virtual keyboard to type emails - the RIM qwerty is a thousand times better.
And yet, none of that seems to matter. Why? Because Apple has branded itself as the 'peoples' company. Its brand is about the human experience. Even their earlier commercials felt 'human' - they were funny or hip or fun or insightful. They weren't about speeds and feeds.
Even their more corporate product marketing feels 'human'.
Compare that to RIM's marketing, which isn't bad, but it's more about horsepower (kind of reminds me of those GM truck commercials).
So what you've got in Apple is a company that is speaking to what people want. They want to have 'fun', they want to be 'happy' - this is what drives most people to buy most of the things they buy, the belief that it will make their life more fun and make them happier.
Now, in the corporate world, it's very different. ROI drives most purchases. Service level quality drives purchases. I.T. management drives purchases.
But at the same time, the corporate world is also filled with human beings. And if they will be happier (and as a result more productive) with an iPhone, you can bet that capex will drift in that direction.
I remember when the blackberry was younger. It was a status symbol in corporations. If you had a blackberry that meant you were 'important' - you needed 24/7 connectivity.
But now? Everyone has a blackberry. But what's even worse, is that those who don't have a blackberry often have their own personal iPhone and actually like their iPhone more than the blackberry.
So the whole prestige of having a blackberry is gone.
So my two cents on all this and what's gone wrong? Basically it's brand. The 'cool' factor for blackberry is at an all time low and it's at an all time high for Apple.
Playing in to this 'human'-centric Apple approach is that they are constantly first to market. First-mover advantage is a big deal. They don't wait for people to get bored with their products before innovating.
Now, will they be able to keep this up for the next 10 years? The answer to that, I think, is whether they stay true to their brand. If their DNA is guided by innovation and creating fun, hip products, then they will. If they become complacent and simply churn their customer base with upgrades, then they will eventually peak and some new company will dethrone them.
What we are seeing in the smartphone market is that marketing matters.
Look, at the end of the day an mp3 player is an mp3. A computer is a computer. And a smartphone is a smartphone. Ultimately, there is a 90 percent overlap of functionality between various brands.
And even to the extent that someone gets out in front through first-mover advantage, over time everyone else catches up fairly quickly.
But once you establish brand dominance - when people view your products as a statement of who they are - that's when you can get so far out in front of everyone that you leave the pack behind.
Comments
Post a Comment