“Maintaining a product, vs. launching a new version”
Who can say whether or not new technology is an opportunity for business, or a threat to the sales- model?
part X, “Maintaining a product, vs. launching a new version”.
So, let’s assume for a moment that when making mobile phones, they should last approximately two years. After that, technology would’ve moved on so much that the last phone would be obsolete, all the standards would’ve been renewed, and the phones would be implanted into your blood- stream, and using your visual coretx as a projector, and things of that sort.
Meaning that at that point, the new product would be so fundamentally different they would outclass the previous phones, and make a new purchase worthwhile.
In this scenario, the question would be: what to do with the current model. “True,” the designer would think, “there is potential here for creating a set of devices for all kinds of users, using the current technology - and then expect them all to buy another phone in two years time when the phones can be grown in a nano- tube. So in this way we would make state of the art devices, differentiate them based on customer groups and preferences, and then wait for a magnificent breakthrough in science to maintain our growth”.
Unfortunately, the designer ends up being disappointed - it took more than two years to replace not just the current tech with modern nano- technology. But previous models were still in circulation, even though newer phones were available. Curious.
Worse, the previously thought brilliant scheme to produce the definitive set of devices, and then doing nothing for the next couple of years seems to have been a very bad call.
In other words, the idealistic provider of portable technology to the masses must make certain compromises to stay barely alive - just while waiting for the scientific breakthrough, of course. Specifically: first, it will be necessary to accept that making several models over the course of a few years with small variations and improvements, might actually be a good idea. For one, it will allow the manufacturer to improve on the earlier designs, and come up with new solutions to old problems that might work better. It will also be a good way to create a varied portfolio, and reach more different customers. Second, it’s obvious that developing new solutions is expensive, and that new models might need to be made cheaper in order to have any hopes that people will buy new phones on impulse, and be swayed by marketing schemes to a predictable degree.
Regardless - in practice, what we have would be hardware improving in small steps, and phones gradually phasing out the old ones, either due to technological advances, or wear and tear.
But aren’t we forgetting something? What about the software? What about the programs that run on the phone? Some time back, it was of course the case that making a picture appear on the screen would be considered technologically stunning. But today the software might easily be an as advanced process as perfecting the hardware. Except.. except.. that the costs of improving and retrofitting hardware with software is much cheaper.
What exactly does that mean for your average phone- manufacturer? There are several options: that now it’s possible to produce several new devices, and incrementally improve the software solution - which makes the development cheaper. Or that perhaps now it’s possible to launch devices with half- finished software, because it’s technically possible to upgrade the device with software later on - which is beneficial if you want to get the device out early enough to engage the “early adopters” in full rightous fury, and get lots of free publicity. Or perhaps also give you the opportunity to smooth out certain small insignificant problems.
This amounts to simply releasing the same device as before with a new program on top. The question is if the users are impressed enough to buy another piece of software for the price of a phone.
There is also another option - the opportunity is there to create good hardware, with a useful and expandable platform. And then - instead of launching a brand new device with small changes in software - maintain the device by improving the software solution. Even when we are talking about one single device, this suddenly removes the production cost of a new device, while increasing the production potential of the old devices. Since they can be sold, if not as new devices, then at least to customers who are less likely to try an untested device that will be abandoned the minute the first batch is out of the factory.
Take a look at the n95, for example - different versions, one addressing the critical RAM issue, others addressing the battery problem to some extent - and the last improving the RAM issue through software- improvements. These are in other words examples of successful deployment of all the mentioned strategies in order to sustain the model, and ensure the device is present on the market in ways that buyers expect.
Of course - this is all in the short term. So - what about the possibility to create a series of expensive devices, and then sell those devices on being maintained and improved fundamentally, while having also software- enhancements made available? In practice fielding a phone on the market that has long expansion possibilities, and will be possible to buy and manufacture over a long period of time? Certainly that option is there for slowly improving hardware platforms, which would at once reduce production costs, also for development of software. While increasing the possibility for selling the device variants over a longer period of time, to different types of (happy) users.
next: part XI, “Differentiating software for smartphones”.
previously: part IX, “Feature Phones vs. expandable devices”.
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