I’ve come to the realization that both of my cell phones are long in the tooth. I have a Nokia N95 8GB on AT&T and a Blackberry Storm on Verizon. The Nokia, though a great phone, has long outlived its usefulness. It does just about everything current phones do (quiet as it’s kept) but the user experience lags behind my many generations. The Storm, on the other hand, is just an awful phone. Yes, I have the 5.0 OS and it’s still a sad, sad tribute to RIM’s loss at how to respond to the iPhone. I’m pretty sure most iPhone users aren’t rebooting multiple times daily due to running out of memory but that’s another story.

I recently decided the time was right for me to upgrade my phones. My plan was to upgrade the Storm to a HTC Droid Incredible which is reported to be a fantastic phone. I would get rid of the Nokia and replace it with a Blackberry Bold 9700 on AT&T. I haven’t had a contract on AT&T in years. I’ve been a loyal Nokia fanboy and bought my phones retail. Even my Storm, I bought on eBay because I was stuck in a contract with a crappy HTC Touch (worst “smartphone” ever). This time, I figured if I got both phones on one-year contracts, I wouldn’t find the contracts too onerous and it would be worth the subsidized pricing.

Imagine my shock when I went to AT&T’s web site yesterday and found out they had eliminated one-year contracts. They will now only sell two-year contracts. I’m still in shock over it. Why? Carriers, more than ever, are promoting smartphones as the way users should go. Smartphone buyers (or a large percentage of them), to my mind, are more affluent than non-smartphone purchasers, more interested in frequent technology upgrades and, in general, just the type of customers AT&T could convince to buy a new phone every year. Heck, AT&T and Apple release a new iPhone every year for that very reason – current owners will upgrade… So, how is forcing people to buy into two-year contracts good for customers? How does that encourage people to upgrade to new phones – which they will likely want to do given the pace at which smartphones are changing?

Seems to me AT&T is making a big mistake. Yes, they’re protecting their own interests – especially in the face of the iPhone reportedly launching on Verizon this summer. On the flip side, however, Verizon, their largest competitor, is still happy to sell me a one-year contract – and I’ll take them up on the offer. I won’t be getting rid of AT&T, but I’ll gladly do them the favor of buying my Blackberry at retail (or on eBay). They can protect their own interests by sacrificing mine if they’d like, but I don’t have to be a party to it. Thank goodness Verizon seems to be maintaining their senses. I guess there’s something to this carrier polyamory thing.

What’s New – Not Your Father’s iPod Touch

The iPad is sometimes referred to as a large iPod Touch and while the user interface is similar to that of the iPod Touch and the iPhone, there are two major differences that make the device much more interesting as a vehicle for marketing communications – size and speed.

The iPhone and iPod Touch are essentially pocket-sized computers. Their small size makes them great for finding bite-sized information on the go. The devices, especially the iPhone, are great always-in-touch, information-at-your-fingertips devices. What is more difficult with the smaller ‘i’ devices is consuming large amounts of content. Reading books, watching movies, browsing full versions of web sites are all challenging on a device with a 3-inch screen. The iPad’s size makes it far more practical as a media consumption device.

The iPad’s position as a media consumption device is strengthened by its speed. Apple designed and built a CPU specifically for the iPad so that the user experience would be blazing fast. They wanted users to be able to turn the pages of books without delay and watch movies without the stuttering seen on many computers. The result is a device designed to provide its users with an experience that feels more like a desktop or powerful laptop than a mobile device.

Why the iPad Matters

People have their own thoughts on the technological importance of the iPad – whether it is revolutionary or evolutionary. I’ll leave my thoughts on that for another time. Regardless of which ‘-lutionary’ the iPad is, it undoubtedly presents users with a more accessible perspective on the tablet form factor. To that end, it will lead to greater prevalence of tablets by both individual consumers and business users.

In the short term, the iPad’s audience will be early adopters, particularly those with wealth or who otherwise have large amounts of discretionary income. Apple’s goal, however, is for the iPad to be ubiquitous. They would like the iPad to be within the reach of almost every media consumer in the country, if not the world. In the meantime, the early adopters represent a unique opportunity for marketers to reach the ultimate consumer – high-income, tech savvy, heavy consumers of media content.

Not to be overlooked is the new type of relationship users will have with their mobile devices thanks to the iPad and other tablets. The iPad brings to the fore the idea that people can access full-sized content on a device lighter (1.5 pounds) and more convenient than a laptop. This new relationship modality is what allows the iPad to be such a tremendous opportunity for marketers.

The iPad and Marketers

Before getting into some potential opportunities, it’s important that I explain the means by which marketers can reach users on the iPad. Just like with the iPhone and iPod Touch, there are three methods by which marketers can interact with iPad users:

• Web Sites – Marketers can create custom web sites which render content in a format specifically designed to meet the needs of iPad users. Such sites can take advantage of technologies like HTML 5 to play videos and display rudimentary Flash type animations. An iPad web site could live side-by-side with your existing company web site.
• Web Applications – Actually a type of web site, web applications are functional web sites designed specifically for iPad users. These sites look and behave similarly to native applications but can be limited in their scope because they are loaded like a web site rather than a native iPad application.
• Applications – You’ve likely seen applications running on an iPhone or an iPod Touch. At the very least, you’ve probably seen the “There’s an App for That” commercials. iPad users can log into the iTunes App Store and buy applications which extend the functionality of the iPad – just as you can buy applications for your personal computer. Where the web sites and web applications require access to the network for usage, the iPad application does not. Additionally, iPad applications allow access to the full iPad user experience while the previous options are limited to what is accomplishable on the web.

Your company could use any and/or all of these options to engage iPad users. Deciding on which to use should be done on a case-by-case basis. No matter which option(s) you select, however, one key to success is remembering that on the iPad the experience matters.

As mentioned earlier, the small size of the iPhone inclines itself to being used for data-driven type functionality – such as reading a weather forecast or finding a great restaurant. The iPad’s size makes it much more appealing for more experiential endeavors. Rather than just demonstrating the weather with icons and numbers, as is generally the case on the iPhone, the iPad can make the weather experiential with video, maps, animations and, perhaps, a gallery of pictures from the requested city – much as you might see on your desktop computer. By taking advantage of the greater screen real estate, marketers can offer users a more engaging experience on the iPad than on the iPhone.

Marketing on the iPad

The experiential approach afforded to marketers by the size of the iPad’s screen and its speed could potentially lead marketers to think about the iPad in the same way they would a regular computer. In the short-term such thinking would be misplaced. Instead, marketers should think of the iPad experience as living between the bite-sized, data-driven approach of the iPhone and the over-arching, productivity-driven approach of a notebook or desktop computer.

To that end, marketing on the iPad should offer users an experience that differs from those available on other devices. Below, we offer a few examples of ways marketers in different industries might build an iPad marketing program. Each of these examples is based on native applications downloaded from the iTunes app store rather than the web sites or web applications mentioned earlier. Doing so ensures users can access some amount of functionality even when they are away from a network.

Industry: Medical Devices
Company: MediDev
Example Type: B2B

Industry: Environment
Company: Murphy Rogers
Example Type: B2C

These are just two ideas. Keep in mind that with the iPad, the sky is the limit. For example, B2B marketers could work with their sales team to provide complimentary iPads with orders over a certain threshold. Such an iPad might contain an application that provides easy access to the material data safety sheets (MSDS) or manuals for the products sold. On the other hand, B2C marketers can create a unique experience for the iPad especially for the iPads tech-savvy, affluent audience.

Regardless of what you do be sure set well-defined objectives for your iPad marketing and to measure, measure, measure. That way, the iPad becomes an educational exercise you can use as the tablet market grows rather than only serving as money thrown at the next big thing.

That ability to create devices that “just work” and to make them more user friendly, cooler and better looking than any other company in the world has earned Apple three years at the top of Fortune’s Most Admired Companies. Where other companies create products consumers tell them they want, Apple creates products consumers only know they want once Apple produces them. It’s an amazing business model and they do it excellently.

My problem with Apple is mobile. Without question, Apple redefined the way consumers saw phones. By offering a phenomenally usable operating system with a beautiful user experience, Apple made the cell phone as cool as an iPod. By further, creating an iPhone ecosystem via the iPhone App Store, Apple converted the device from a phone to a multi-function device that allows its users to lead a life where everything they need to do can be done from the palm of their hand.

What Apple did was not new. Palm phones had long supported color icons, touchscreen input and rather small form factors. Nokia phones pre-2006 (when the iPhone debuted) offered smartphone style functionality, Wi-Fi, downloadable applications (I know because I built an app), the ability to surf the web and view video (if you had the right software). Blackberrys from RIM have long offered an exceptional communications platform. All of this existed prior to the launch of the iPhone. Apple’s contribution was bringing it all together in a phenomenally tantalizing package that just worked.

Putting a beautiful wrapper, however, on old technology is not novel. It is exactly that lack of novelty that has me questioning Apple’s recent actions in suing HTC for patent infringement in a thinly veiled attack on Google’s Android. Engadget provides a detailed explanation of the patents involved here.

Apple has not attacked HTC because it is a cell phone manufacturer who might (or might not) infringe on their patents. In fact, Apple has attacked HTC because they are at this moment the only phone manufacturer who 1) is relatively small; 2) makes devices whose capabilities, on many levels, rival those of the iPhone; 3) creates great devices that use Google’s Android.

Android is the mobile operating system many see as the iPhone’s greatest competitor. Nokia’s Symbian and RIM’s Blackberry OSes both have greater market share than the either the iPhone OS or Android but Android has been developed much in the same way the iPhone OS was — with phenomenal speed, tremendous attention to detail and a focus on both ease of use and being easy on the eyes. Combining the Android operating system with HTC’s hardware was a shot across Apple’s bow. Their response, however, has the potential to stop the mobile business in its tracks – leaving Apple as the only company capable of creating modern smartphones.

Apple’s immediate goal is to neuter Android and HTC before they can truly challenge their leadership position. This is not about patent infringement. The broad nature of many of Apple’s patents and their questionable applicability (as well as the likelihood that prior art can be demonstrated for some) indicate that Apple is going for a shot gun approach to take out the weakest gazelle in the herd. You can be sure that if Apple is successful that they will soon go after Nokia, RIM, Samsung, Sony, Motorola and other OS and hardware manufacturers. Apple clearly wants to own the mobile business all to itself in spite of other companies having long history of mobile accomplishments long before Apple got on the field. Their goal is to decimate all competitors in a way that relies not on consumers’ demand for their products but on questionable intellectual property awards. To my mind, that borders anti-competitive and is not in the spirit of how the marketplace should operate.

Let’s be clear. Apple should absolutely have the ability to protect their intellectual property. For example, the slide to unlock a phone patent seems valid to me. I don’t know who owns the patent for the zoom in / zoom out gesture on the iPhone but if that’s Apple, then that is absolutely protectable. To want to enforce patents on multitasking or using parsed data, however, is a stretch. (Perhaps the stretch is the USPTO even awarding such a patent.)

What I’d like is for Apple to not try to hobble the mobile business buy pursuing enforcement of questionable patents. I’m sure Motorola, Nokia, RIM and other companies have similar patents that could just as simply be applied to Apple. Instead, I’d like to see the companies press each other to innovate. I like the pressure the success of the iPhone has had on the rest of the mobile business. If not for Apple, we’d still be on 20MB calling plans and Palm would have the most advanced phones. And if Apple was in the business by itself, what we’d find is that we’d be stuck using a phone that only allowed us to download applications Apple liked and doing only things Apple approved of. We’d find that even Apple would slow down innovation if no one was nipping at its tail and, most of all, we’d find that the mobile business was a whole lot more boring — except for Apple.

Let’s not let Apple ruin the mobile business…

Pricing isn’t the only issue. As we now see from the AT&T / iPhone debacle, when carriers hold exclusive agreements on phones they come to hold their customers in contempt. AT&T sat and watched Apple launch the iPhone, the iPhone 3G and then the iPhone 3GS – knowing full well the impact the phones would have on their network – and did little to increase the capacity of the network to match demand. Sure, you have a beautiful high-speed capable iPhone, but your network often only supports slower speeds because of AT&T’s commitment to mediocrity.

Carriers need to get out of the retail cell phone business. Carriers have been complicit with manufacturers in gouging consumers on the prices of cell phones. Doing so has led to a huge conflict of interest that has resulted in the carriers considering the devices more important than the services they offer. It’s almost as if the broadcast networks sold the TVs on which you watched their shows. Remember when Ma Bell leased you a cell phone along with your phone services. They stopped post breakup because they realized phones weren’t there core competency. The same goes for the carriers. They’re essentially network service providers who play cell phone sales people on TV. They need to stop.

The alternative, in my mind, is two-fold:

• Create phones that work on any network — I don’t mean create unlocked phones. Instead, I’d like to see phones, like the Blackberry Storm, that support the network technologies of Verizon, Sprint, AT&T and T-Mobile. The expense of adding multiple technologies to mobiles doesn’t add substantially to the price of the phone and it gives consumers more options
• Manufacturers should partner with big box stores – Stores like Walmart, Target and Best Buy have the heft to pressure manufacturers to deliver phones at prices that are more consumer-friendly. It is true that manufacturers’ margins will decline, but I expect they’ll make up some of that on quantity given the lower prices, lack of burdensome contracts or carrier exclusives. What we’ll also see as a result of this, I believe, is more innovation. Lower margins give manufacturers less reason to stick with phones that don’t sell. Lower prices will lead to greater sales of popular phones. This, I believe, will lead to greater and quicker phone innovation as manufacturers work harder to deliver phones with innovative features that allow them to keep a leg up on their competition.

These two changes will change the industry but in doing so benefit all involved. Consumers will have more selection at better prices. Manufacturers will be able to better gauge consumer need and react more quickly as consumers become free to buy phones as frequently as they’d like. Carriers become more able to focus their energies on their core competencies – their networks. Seems like a win-win to me.

I’m at a fan of Nokia phones – or at least I was. Nokia, one of the largest mobile companies in the world, has failed to establish a real foothold in the U.S. market. Unfortunately for them, the U.S. is where so much of the mobile excitement is these days. Between the iPhone, Google’s Android and RIM’s quickly evolving Blackberrys (Canadian, I know), the smart-phones have changed the way people see and use phones. Nokia has sat on the sidelines releasing phones with inferior features and usability inhibited by a long-in-the-tooth operating system. They’re one of the few manufacturers who has actually tried the end-run around the carrier-retail model by going direct to retail. High unsubsidized prices and curious lack of marketing, along with lackluster phones, have impeded their success. this article from the New York Times analyzes some of their issues.

Based on recent news, there is another company considering trying to circumvent the carrier-retail model. It is rumored that in January Google will launch its own HTC manufactured Google Phone. The phone, if speculation is accurate, will be sold directly through retailers as opposed to carriers. I have not seen pricing details but my own guess is that the price of the phone will need to be competitive with that of subsidized phones sold by the carriers. I also expect that, contrary to Nokia’s approach, Google will market the Google Phone – perhaps heavily.

I’m hoping that this could be the start of some really great changes in the mobile phone business that lead to more innovation and better products for consumers.

Dell became great during a time when differentiation didn’t matter. In fact, their business model is built on a lack of differentiation between devices. Their strength is their ability to offer cheaper prices because of scale. Cheaper prices haven’t been all that important in the mobile phone business. If people like a phone, they pay for it. Dell likely went to the carriers trying to get an exclusivity deal and “differentiation” absolutely matters there. Danger could have offered Dell some opportunity for differentiation by extending the range of their platform, but Microsoft snapped them up.

Given the economy, there may be some hope for them if they can get something out fast. A low-priced smartphone targeting parents and their tweens/teens could have some legs if it offered great parent-centric features without seeming too restrictive to the kids. Similarly, though RIM and Apple own the hearts of the most savvy cell phone users, most cell phones are a few years old and are dumb. In keeping with their business model, there’s a great opportunity for Dell to reach those users who need to upgrade because they want new features but don’t need the whiz-bang technologies of a Blackberry or the iPhone. That also happens to be a place where differentiation isn’t all that important as long as the target audience knows what the primary benefit is.

Dell has the heft to make a strong entry into the cell phone business. I’m they’re keeping their eye on the right bulls eye.

As I’ve previously indicated in this blog, I love mobile. As such, I’ve recently imbibed on the iPhone Kool-Aid and have taken up investigating iPhone application opportunities. In doing so, I began to realize something interesting — marketers are right back in 1995 with their engage-the-masses, cross-our-fingers mindset. Case in point… Target. Yes, Target.

A recent article from USA Today indicates that consumers are trading down and companies like Target are being hurt in the process as consumers switch to WalMart and other lower cost alternatives. Per the article, Target’s net profit and same stores sales were both down last quarter as a result of consumers’ new found frugality. To my mind, Target is missing something because some shoppers should be trading down to it. And which shoppers in particular do I think should be schlepping into Target – everyone’s favorite customer, the 18-34 crowd.

This group, most recently flush with money either from their parents or from high-paying jobs, has shopped at Target and target.com for incidentals, but rarely for clothes. That’s what boutiques and mid to high-end stores were for, but not anymore. Those jobs are fading and parents’ portfolios aren’t what they used to be. The over abundance of money has faded, but this audience of fashionistas, urban hipsters, college students and young moms still have to purchase things someplace and to my mind Target and target.com should be that place.

Now, before I go on, I’d like to point out that much of what I’m about to say is based on anecdotal evidence. Though research indicates men are most likely to buy iPhones, my experience is that a significant number of women apt to shop at Target use iPhones. Additionally, more recent research tells us that iPhone owners are becoming more diverse and that since the launch of the iPhone 3G “the strongest growth in users is coming from those earning less than the median household income.”

I say all of this to say what. It’s time for brands like Target to act. Target has an application on the iPhone App Store that allows people to choose gifts for others. I can only imagine what users of the app are thinking – “What about me?” Gifts for others are great, but as a person who knows a thing or two about being selfish, I want to know how an app can help me. To that end, iPhone apps offer retailers like Target, who are losing their cachet, an opportunity to “speak” to buyers who are trading down. They may not be able to shop at Pottery Barn or Nordstrom, but they still need to buy things. An iPhone application can hone in on what they want and present it to them with an experience unique to the iPhone. Make users’ lives easier. Moreover, the device can encourage online purchases or offer unique opportunities that drive traffic to local stores – helping to maintain same store sales rates. To paraphrase speculators in the old West, “There’s gold in them iPhone hills.”

This entry is lengthy enough, but there’s something I like to remind people of with regard to marketing with new technologies:

• From platform to platform and technology to technology … marketing is marketing is marketing

To that end, remember to:

1. Always segment and focus on customers’ needs and making their lives easier
2. Seek out new opportunities with new technologies. Don’t use one technology the same way you’d use another. Innovate.
3. Stay true to your core. Don’t stray from who you are and your core brand message. You can lose your audience and it’s too hard to get back to center.

Everyone, it seems, is creating the next iPhone. Google’s G1 is the most recent device to throw its hat into the ring, but they’re not at all alone. Blackberry is on its way with the (initially) Verizon Wireless marketed “Storm”, also called the Thunder. Nokia will soon be launching the Nokia 5800 Tube, the first phone that implements its S60 Touch UI. And, let’s not forget the Samsung Instinct, which actually sold well, and their beautiful but not yet available in the States, Samsung Innov8. Each of these phones are being released to provide competition to the iPhone – in some ways, to be the next, but better, iPhone. I’m sick of it.

The iPhone is a great phone. I do not have one, but often wish I did. My Nokia N95 is very nice, but there’s something excellent about a touch screen. I like the idea of being able to browse the web almost as I would on my desktop or notebook. I think the UI is amazing – especially for a company taking a first shot (technically, 2nd if you include the Newton) at a mobile OS. It’s size is almost perfect and now that it has 3G, it really is a killer phone. The thing is, for what they did, they nailed it. They got it right. They left little room for error and the marketplace acknowledges that with its demand. Given that, why is everyone stuck on creating the next iPhone? Apple created the next iPhone with the 3G iPhone.

The phone manufacturers should be looking at creating some above and beyond the iPhone. RIM should be looking at creating the next Blackberry, Nokia, the next Nokia and Samsung, the next Samsung. What does that mean? These companies need to focus on their strengths. RIM should be looking to revolutionize what business users can do on their touch-screen Crackberries. People should feel almost as if they don’t even need their laptop because they can do 75% of what they need to do on the Blackberry. Nokia, on the other hand, should focus on reliability, functionality and its ability to stay slightly ahead of the curve. Nokia doesn’t create the greatest looking phones. They create the most reliable phones and, with its S60 platform, highly functional phones with lots of capabilities. Honestly, I don’t know what the hell Samsung does well, but people are beginning to like their phones judging by the reaction to the Sprint Instinct and the Innov8.

To my mind, each of these companies will only succeed if they stick to their core strengths and stop worrying about the iPhone so much. If Blackberry users wanted an iPhone, they’d buy one (and may have already), but they’d likely still keep their Blackberry. If, as an N95 owner, I wanted an iPhone, I’d go out and get one, but I trust Nokia’s reliability and like the options I have with the N95. When competing with the iPhone, other manufacturers will only be also-rans and the more time they spend competing solely against the iPhone, the more time they will spend as also-rans. It’s a sad truth. However, if they focus on their core strategies, do what they do well and bring devices to market that exceed expectations, they easily stand more than a fighting chance of giving the iPhone true competition.

I don’t like my Verizon phone – a three month old HTC Touch (referred to by Verizon as the VX6900). I thought it was cool when I bought it, but its flaws have worn on me. I don’t care about it not having a keyboard, but at least the on-screen keyboard could be usable. Beyond that, I’m finding right now that it selectively rings. In other words, if it is in standby mode, it won’t ring when a call comes in, but will briefly ring once you turn the screen on to use the phone. Apparently, this might as well be a feature given the number of people for whom this is an issue. I say this to say that I’d like to change my phone and guess what, I can’t. It’s not because Verizon doesn’t have other phones for which I could pay full price. Instead, it’s because the only phones one can use on Verizon’s network, thanks to their closed-mindedness, are old ones. Go ahead. Go check out Verizon’s site and find a Windows Mobile (Professional, my preference) based phone that wasn’t announced at least a year ago. For those who are counting, that’s even pre-iPhone.

Here’s where this hits home for Verizon. Check out the Samsung Instinct. It’s an iPhone-like touch screen phone Sprint recently released and it’s selling so fast Sprint can hardly keep it in stock. Verizon has put out two phones, the LG Voyager and the Samsung Glyde, that they thought might be, if not iPhone killers, iPhone competitors. The public hasn’t thought so. What did Verizon do wrong? A couple of things…

For one, check out the different ways Sprint and Verizon market their phones. You can go to the Verizon website for the Glyde. Exciting, huh? That’s the first SERP listing on Google when you query “Verizon Glyde”. To their credit, they did hoodwink Samsung into building a Flash driven site. Not great, but better than what Verizon did themselves. Now, let’s head back to Sprint land. The Instinct’s site? Check it out. Sprint created a campaign around the launch of the Instinct. Talk about Marketnology^SM at work! Not only did they create a campaign, but they’re even offering to pay consumers for doing Instinct product placement in home videos on YouTube. Amazing, stuff…

But, I said Verizon did a couple of things wrong… The second thing? It’s something they’ve been doing wrong. They’ve not been thinking about their audience. Every non smart phone you buy from Verizon has the same outdated, ugly and difficult to use interface. They changed it a bit for the Glyde’s outer screen, but by and large they insisted on putting their ugly mark on the phone. Understand that the Glyde and the Instinct, when they leave Samsung, are just about the same phone with the exception of the Glyde having hardware keyboard. What happened on the way to market was Verizon’s unwillingness to think about what they can do to make things easier for the audience rather than using a lowest-common-denominator interface that makes thing consistent for their tech support. I would posit that if the interface is easy to use, customers won’t have to call that much – which explains why Sprint went for easy since they’re tech support is rumored to suck.

Enough of my rant, my point is that Verizon has their heads up their behinds. In this market, being lazy won’t sell phones. There they are stuck in the middle of AT&T, who had the vision to take on Apple’s crazy iPhone deal, and Sprint who seems to have found the key to getting people interested in their products (though, they seem to be faster to market than Verizon anyway). To my mind, Verizon has to get over middle child syndrome look towards innovation as way out of their obvious doldrums.