COMMENTARY: What Steve Jobs Knows and You Don’t
Issue: Microsoft introduces Zune
Commentary by: David
Yesterday, Microsoft launched Zune. Zune is a music/video player which Microsoft hopes can gain a foothold against the Apple iPod. We saw the Zune in person early last week. It is a slick, attractive little device. It has an impressive screen and easy-to-use controls. It can share songs wirelessly and has integrated software. In short it is impressive. And we believe without doubt that it will fail to dislodge Apple and iPod from its leadership role in this industry.
This is not because iPod has a head start. In fact, the story of the IBM PC itself (and much more recent work on the development of the Internet) confirms that the ‘first mover’ advantage is largely mythical. The difference between Zune and the iPod is deeper – a matter of marketing philosophy. Early reviewers of Zune like Walt Mossberg and Stephen Wildstrom sense this fundamental difference between iPod and Zune without being able to put their fingers directly on it.
So what does Steve Jobs know that Steve Ballmer doesn’t? Jobs understands that it’s not about the big picture – it’s about the details. iPod is a better brand than Zune not because the product strategy behind iPod is better (by embracing sharing, Zune may have the better business model), but because the attention to details is superior. Microsoft as a company believes in bringing innovation to the consumer as soon as possible. This comes with flaws, bugs and glitches, but the company makes a conscious tradeoff between degree of done-ness and time to market. Apple doesn’t release products until it believes it has perfected them to the smallest detail. Such is Apple’s obsession with detail that they have invented new manufacturing processes in order to make working products mirror their idealized concepts in execution.
You could say that this is micromanaging and it undoubtedly is. Did the second-generation iPod Nano really need an aluminum skin? No. Did the iMac need to be sheathed in transparent plastic? Certainly not. And yet it is just these details that make the product original and authentic.
Microsoft follows a different path and that is evident with Zune. The case is elegant, but larger than the iPod. The online store creates an intermediate currency “Microsoft points” which have a strange exchange rate with the dollar and seem to do nothing more than add a level of complexity to the process of purchasing music for the Zune. WiFi sharing works easily, but shared songs expire after three plays. And on and on. While each of these foibles is the result of a well-meaning compromise (the sharing issue is a compromise on protection for copyrighted music, for instance), they are clearly compromises and they compromise the design and usability of the Zune.
What Steve Jobs knows that we don’t is that we care more about the small details than the big issues. We love things that feel right, that reward us with an easy and engaging user experience. We cue on small things to build our opinion about the big issues. Most of all, we like things that work 100% at advertised. Even 99% feels like not half as much.
November 15th, 2006 at 4:10 pm
[...] Original post by ThirdWay Advertising Blog [...]
November 19th, 2006 at 9:12 pm
[...] Do you want to market to twenty-somethings? Start by reading The Many Lessons of Scion, by ThirdWayBlog. David Vinjamuri is adjunct Professor of Marketing at NYU, and President of ThirdWay, Inc. His dissection of the success of Scion, a car that most people my age think of less as a vehicle than the packing crate it came in. “Scion has excellent lessons for the modern marketer. More than many other brands targeting young adults today, Scion has understood that ubiquity and brand strength are not complementary goals and has been willing to forgo the former to gain the latter. The very brave decision to scale back manufacturing to avoid over-saturating the brand shows both the intelligence of Scion marketers as well as the commitment of Toyota executives to the brand promise.” Read on for other lessons, including one of David’s latest posts, about why Microsoft’s Zune will deservedly get creamed by the iPod. Good stuff. [...]
November 28th, 2006 at 12:38 am
That's the biggest load of crud I've heard all day.
Apparently you weren't around for the first three generations of I-Pods.
They had an extremely high return rate due to defects. About 20% in the FIRST month, and up to 50% within 3 or 4 months were broken where I worked. It was hell on earth for customer services at retail. I'd say the first 3 gens of I-Pod were the most defective mp3 players ever.
I've read reports an worldwide, each i-pod gen up until the most recent ones had an atrocious defect rate, varying from 20-40% (even 20 is really, really bad).
Research before you blurt.
The only reason the I-Pod is successful was a great marketing strategy. They had the best viral marketers mixed in with unsavory marketers too you think it was a coincidence the internet saw a billion "get a free i-pod" promotions, which in turn got tons of high schoolers, or anyone else with limited cash talking? Apple coulda shut down those spamverts but I wonder why they didn't… Why not have someone else spam your product for you?
December 3rd, 2006 at 2:03 pm
It's true that Apple is plagued with problems in the first (or first few) gen(s) or their products. It's also true that they pay attention to the fit and finish of a product, more so than most of their competitors. They play within a closed system with maximum control. This has allowed their computers to run without most of the problems that plague PCs. For the consumer this is good and bad. Since the Mac is such a closed system, the user must purchase the newest OS update or they will find themselves unable to use the newest Adobe product, etc.
I think it's a safe call that the iPod will stay dominant. The main advantage Apple has is it's enormous mindshare. MP3 player has almost become ubiquitous with iPod. When someone says "I want an MP3 player for Christmas" I bet 80% of the public thinks "get him/her an iPod." If Microsoft were to offer lots of giveaways of Zunes they might be able to seriously damage the iPod mindshare hold. The more Zunes are "in the wild" the more chance someone will see one and ask what it is. If the person using the Zune likes it then they will give a positive recommendation to the inquiring person. This is the best endorsement the Zune, or any product, can have. We trust the "average" person more than people or announcers in commercials.
May 15th, 2007 at 10:38 pm
I personally shop for MP3 players on eBay, you meet a lot of fascinating equipment there. Hong Kong is it's own world in terms of product design, and only recently have Hong Kong items begun appearing in US Internet channels.
There is, for example, a huge market there for small players retailing about forty dollars US. Many are styled to look like iPod Nanos but unlike a Nano include an FM receiver with twenty-station speedtuning, off-air recording capability and a dictation microphone too. Unlike the iPod they can be loaded with music simply by plugging them into a USB port and dragging and dropping files from your desktop; the unit looks like a standard thumb drive to your computer.
They have a 1.8-inch color screen like a Nano but improve on that by playing videos from flash memory, not just displaying slideshows as Nano does. Plus which, they recognize standard playlist files and can carry hundreds of these sorted into subdirectories. And being from Asia, they naturally include a Karaoke lyric tracking capability for audio and video files. Now how much would you pay? But there's more.
For forty dollars you get all this and a gigabyte of flash too; capacities up to four gigabytes are also available. Fit and finish are equal to anything you see in a cellphone, and they come in an assortment of styles including an aluminum-cased model with built-in speakers.
So naturally most Americans have never seen one and don't know they exist. Pity.
As for the Zune, Microsoft is now actually pulling them out of their packaging and repainting them in hopes of selling them by color alone. Yes, its the consumer electronics equivalent of tying a porkchop around your kid's neck so the dog will play with him: paint it pink so some debutante gets it for a Sweet Sixteen present. Other people buy them so they can cybernetically crack them, discarding Microsoft's firmware in favor of Linux. Seems the DRM system evaporates along with the Microsoft code, making them formidable piratical vehicles ready to surf the WiFi waves for plunder. I must say it was a bit of a blunder not making them Vista compatible; you can only hook one to a Vista machine by cracking it first….
As for iPod, it will continue to eclipse its only true competition, Sandisk for at least another year. Steve Jobs can afford to take the brand in radical directions thanks to its sky-high profit margins and devoted following. The expectation is that in 2007 he will ditch the 1.8-inch hard disk drive now inside iPod Videos in favor of a Solid State Disk, a straight replacement part that consumes a tenth the power and has no moving parts. Next year he may ditch the iPod Video entirely in favor of an SSD-equipped iPhone. And an iPhone with an 80-gigabyte SSD in it would be a formidable palmtop computer. In three years a cost-factored version could cross the ninety-dollar bill-of-materials sweetspot of current midpriced cellphones, at which point it would likely dwarf all sales figures to date for iPod.
As for AppleTV, it takes Apple towards something becoming quite popular in Europe — IPTV, the streaming and downloading of current television programming over packet-switched networks. About forty-five percent of European television watchers have reportedly used IPTV in the past year, and we could expect even higher numbers in the US if a wireless, always-on Internet connection were assured.
That assured wireless connection may arrive as a so-called mesh-topology network — self-sustaining field computers perched up power poles, trees and towers throwing a blanket of WiFi-derived radio communication across neighborhoods. Currently about 700 wireless nodes suffice to service a 100,000-population suburban community at a cost of about two million dollars, but by 2010 advances should allow a per-node cost of six hundred dollars and an equivalent coverage with fewer than 500 nodes, allowing ninety percent of the US population to be "meshed" at a cost of about six billion dollars. Such a network could be fielded by 2015, paid for within a year by selling Internet service subscriptions and click-through advertising. After that an iPhone's WiFi capability would allow it to place Voice Over IP calls on the national "comweb", and AppleTV would be all the high-definition tuner your house would need.
Now how much would you pay?