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News out today confirms that Sony has indeed sold off its Vaio PC arm, ending 17 years in the personal computer business. And that CEO Kazuo Hirai has also decided to separate the TV division into a standalone unit in order to better heal it. Although he insists for now that Sony has no plans to sell that division, it would be foolish of the company not to consider any good offers. If there are any.
Because really, who would want that business? It has lost nearly $8 billion in the last 10 years and has been rapidly losing share to Samsung and LG and is about to get attacked by Chinese TV makers eager to have more influence in the US and other Western markets. I saw a very impressive offering from Hisense, TCL, and Haier at this year’s CES and expect them to make inroads against the more expensive panels from Sony, Panasonic, and Sharp, all of which have struggled to keep up.
Marketers, you are officially on notice: The very idea of brand relationship is going to become irrelevant thanks to digital disruption. If you continue to focus on building a wonderful brand relationship with your customer, you will one day awake to find that someone else has taken your place in your customer’s life — not with a more compelling brand relationship, but with a more compelling digital customer relationship.
Someone out there is building the “ultimate customer relationship,” a type of digital bridge I write about in my most recent Forrester report, "Start to Build Your Ultimate Customer Relationship." That ultimate digital customer relationship is the type of relationship that digital tools and services enable and that digital consumers welcome. They’re happily signing up for anything that tethers them to a source that can give them more of what they want, more easily than before. Even with the supposed threat of privacy all around us, consumers are diving into deep digital relationships with companies or brands that deal with the most sensitive aspects of their lives. Weight-loss app Lose It helps users log personal information such as calories consumed and tell others of their goals, leading to the loss of more than 27 million pounds so far; Square gets consumers to email cash to friends — thus introducing them to Square and inducing them to sign up; and Airbnb has welcomed more than half a million listings of spare rooms and apartments that have been visited by more than 9 million guests. What’s more personal than your weight, your money, and your spare room?
The madness that is the Consumer Electronics Show (CES) has finally subsided, people are safely home (some never arrived thanks to cancelled flights), and we’ve had sufficient time to read the CES stars and foretell what it means for 2014 and beyond. Condensing this show down to so few points requires omitting some things, even some fun things like Michael Bay’s meltdown and T-Mobile CEO John Legere’s attention-grabbing tactics, but it’s my job to say what it means. So here I go, predicting what will happen in 2014 with three (admittedly long) bullets:
This week, Apple confirmed the longstanding rumors that the company has agreed to acquire PrimeSense, the Israeli company that invented the technology behind the original Kinect for Xbox 360. All of Apple's moves are scrutinized closely, but this one is worth paying closer attention to than most.
The PrimeSense technology was astounding when it was first incorporated into the Kinect. This was not only because of what it could do — see you in 3D and model your skeletal structure as it observed you moving in physical space — but also because of how the company did it. Instead of imitating the $10,000 military-grade hardware of its predecessors, the company insisted on using off-the-shelf technology, whether hardware or software, so that the cost to deploy the solution would be laughably low, compared with prior imaging solutions. That's what made Microsoft so interested — Microsoft's own motion-sensing engineering group was years away from a homegrown Kinect experience and saw a chance to jump ahead of the market with PrimeSense. And jump it did, selling by our estimate more than 30 million cameras around the world, boosting sales of the Xbox 360 console even after it was already nearly five years old.
Now that Microsoft has moved beyond PrimeSense with the Xbox One and Apple has swooped in to buy the company, it will be tempting to think that Apple wants the technology so that it can finally make a successful play for the living room, something it has repeatedly failed to do with Apple TV. Certainly, the Primesense tech works great in the living room, and Apple would be foolish not to try it out there.
With the release of the Xbox One around the world today, Microsoft is now in position to see if it will catch up with Sony's successful PS4 introduction, which reportedly sold more than a million units on day one. Many are asking which console will win. That's actually the easy part. The harder question is whether game consoles will still matter in two years at all.
It feels a little like we've been here before. Back in 2007, both Sony and Microsoft were working hard to push the next generation of a technology they were convinced everyone would want. I'm not talking about the PS3 versus Xbox battle, though, but the war over high-definition video.
Most will barely remember that while Sony backed Blu-ray, which eventually won, Microsoft was betting hard on HD-DVD. I was courted at the time by both companies, eagerly trying to persuade me that their version of HD would win. We called the war for Sony at the time but made it clear that it would be a Pyrrhic victory: There would be precious few spoils to earn from that success.
We were right, much to Sony's distress. That's because the battle was fought over a physical storage format that was rapidly losing relevance. Digital downloads had already begun, although they would never really catch on. More importantly, that was the year that Netflix added online movie viewing, foreshadowing and encouraging a future that would be streamable.
That's why the right comparison today is not between this and the last-generation game console launches. It's instead between game consoles as a whole and all the dozens of other ways people can play games, watch video, interact with friends, and otherwise pass their free time.
Apple just announced that it has cumulatively sold more than 170 million iPads since the product first debuted in 2010. For context, if iPad Nation were a country, it would be roughly tied at No. 7 with Nigeria, set to eclipse Pakistan next quarter and Brazil the quarter after that.
This boldfaced proof of digital disruption’s power to upset markets has left companies in every industry struggling to keep up with a consumer population that is happily disrupting itself. For someone who spends his days researching digital disruption and modeling its effects, on the one hand, this is good news: Everybody believes in digital disruption. On the other hand, it raises a very real problem: Nobody knows what to do about it.
Today when I meet with companies bent on becoming digital disruptors, one of their first questions is no longer, "How much time do we have until we have to respond?" but rather, "How do we get started right now?"
There is no single answer to this. Some companies are best served by locating their disruption initiative outside the company in an innovation lab where it can quickly generate disruptive momentum. Others can get a boost of internal support by building an internal innovation team and drawing resources from a supportive corporate structure. And some companies can launch multiple focused disruptive initiatives across many different groups in the organization, each one tasked with a specific disruptive goal, as long as the culture of the company is ready to incubate the efforts.
Watching Amazon.com cut the prices of last year’s Kindle Fire devices shortly after they debuted, you may have concluded that Amazon’s tablets weren’t performing well. You may have further speculated, as I did earlier this year, that maybe Amazon didn’t need to commit to the tablet strategy. After all, Amazon has a great relationship with its customers whether they’re on PCs, mobile devices, or iPads. You (and I) would be wrong. Today Amazon doubled down on a tablet strategy, announcing three new devices for sale later this year. A new 7-inch Kindle Fire HD (starting at $139), a 7-inch Kindle Fire HDX (from $229), and an ultra-skinny 8.9-inch Kindle Fire HDX (from $379). In one fell swoop, Amazon:
Commits to tablets as a way of committing to customers. Yes, tens of millions of people already have iPads, but another 40 million people in the US will get their first tablet between now and the end of 2016. And chances are very, very good that Amazon has a credit card on file with most all of them.
Summer's winding down and it's time for people to get serious about closing out the year and looking forward to a digitally disruptive 2014. I can tell because the phone is ringing off the hook these days and nearly every call has the same focus: What steps can we take now to get the jump on digital disruption?
First, I'm thrilled to get these calls because implicit in the question is the belief that digital disruption is real. I've found that to be the case in the many months I've been on the road speaking about my book Digital Disruption and calling people to adopt the digital disruptor's mindset. Very few people doubt the unique power of digital disruption, in fact, they often have better examples of disruption to offer me than the ones I came prepared to talk about.
But after the mutual thrill of excitedly comparing case studies, these conversations have rapidly settled down to the same question: What can we do about it? It's precisely in that spirit that Tom Pohlmann, Forrester's Chief Marketing & Strategy Officer, sat down with me to get the straight scoop on what companies can do right away to understand and act on digital disruption. The result is an 18-minute interview that we're serving up as a podcast under the Forrester Talks Podcast. You can either listen to the whole thing in one shot (episode 1) or consume it in bite-size, topic-focused chunks under episodes 2, 3, and 4.
For the history of humanity, for one person to make a difference, the individual had to convince many others to join the pursuit. And the convincing part was tough — whether you were Martin Luther or Martin Luther King, Jr., the amount of effort was high, and the probability of success was low. (Certainly the list of people who tried to change the world and failed is long; it’s just that we won’t know their names, which itself is part of my point.) From Christopher Columbus to Steve Jobs, individual power has really only amounted to much infrequently, and only when backed by very large and wealthy entities. Kings and queens financed the discovery of the Americas; Wall Street and venture capital bankrolled Silicon Valley.
I recently heard my all-time favorite excuse for why you can't disrupt yourself. It was in a session with 40 senior IT leaders of a Fortune 500 company including the CIO. Somebody brought up Uber and Airbnb, and most in the room nodded in agreement that a big company could learn a thing or two from these disruptors. That's when someone dropped my new favorite excuse: "But we can't imitate Uber and Airbnb because what they're doing is illegal."
Sure, it would be nice to just avoid taking the fast and bumpy road of disruption in favor of staying in the smooth parking lot of denial. But that's not really an option because the lessons of Uber, Airbnb, and other disruptors apply to everyone in every industry.
I don't mean to sidestep the legal question, but I do mean to point out that it's hardly the issue here. Uber and Airbnb are coming under fire because they're using cheap technology and existing resources to make their customer's lives dramatically better, one positive experience at a time. That's the real issue here, and it's the one companies of any size should focus on.