Monday, 29 November 2010

Der Volkscomputer


Back in the 1930s, Germany was in the middle of its reindustrialization as a necessary step to get ready for the war that was already cooking in Hitler’s mind. Besides the reinforcement of the pure military industry, there was a strong recovery of the country’s economic infrastructure, what meant not only basic industry, but communications too. The plan for “die Deutsche Autobähne”, the German highways network was being deployed to.

In coordination with this, the German government of the time decided as well that the automotive industry should as well be a fundamental part of these plans, including the production of a cheap car that could be afforded by the average German family. That was the birth of one of the automobile industry icons: The Volkswagen Beetle. In fact, that is what Volkswagen meant: A car for the people, for the folk. Cars manufactured at that time were really expensive for an average German, who saw Mercedes, Opel, Maybach or BMW as unreachable items. The Great Depression of 1929 or the recovery from WWI were still too high economic loads for German citizens.

Incidentally, we shall mention that the industrialist awarded the necessary support to fulfill the project was Ferdinand Porsche. Curiously enough, we think nobody would associate the name Porsche to an average car for an average citizen in an average country, would they?

Despite the progression of WWII, still after the war the Beetle was there, and it did hit the right combination of price, market segment and product features. It was the right product at the right place in the right time to become an industrial success.

Not as powerful and fancy like Mercedes, Alfa Romeo, Citroen, Opel, Ford, Buick, Oldsmobile or Chevrolet; not as expensive either, it still was enough: Four wheels at a reasonable price that made the car acceptable for basic transportation needs, and was relatively easy and cheap to produce too. Factories were set up in Brazil, Mexico and China.

Later on, it even became fashionable: It’s typical and unique design (unchanged for decades!) came to a point in which it was perceived as cool, fancy and stylish. Not only it became an icon for the industry, but as well for a full generation of users. Even there have even been “revival editions”, special batches with this or that feature, that have been sold as limited series, with real high prices and margins.

It has been one of the best selling cars worldwide. To the point, in fact, that starting from the Beetle, a full line up was developed under the Volkswagen name, which, after having been a name designated to one specific car, has turned into a worldwide brand, and in fact, a worlwide industrial company. The Volkswagen brand is in fact one of the best recognized brands in the whole world, similar to Coca-Cola, General Motors, IBM or other. Under the Volkswagen brand, there are no more Beetles in production, but there are Golfs, Jettas, Passats, Touareg SUVs, trucks, minivans… and the industrial group own other brands such as Audi, Skoda, SEAT…

It looks that iPads are indeed repeating the Volkswagen story. For some, iPad turns to be the affordable Mac. If Mac is a Porsche, iPad is the Beetle… and Ferdinand Porsche himself has re-incarnated in Steve Jobs!

But as we write this, we even think the story goes further… we think the very first affordable Mac was the iPod/iPhone duo. That was indeed the very first Beetle, the first Mac experience for many people. As a matter of fact, would it be false to say that iPad’s success is based on the iPod’s or on the iPhone’s? And isn’t Mac Pros, Mac Airs as well benefitting from the halo of iPads?

Apples to apples


We have read an interesting summary of an analysis made on smartphone users’ loyalty to the brand of their current handset.

The conclusions driven there seem reasonable, though we believe one should be cautious when drawing conclusions.

We think the smartphone market, booming these days, might change a lot in short time, so many things are still developing and reaching users as we write this, that today’s conclusions may be completely different in a few months from now.

If loyalty is a reflection of satisfaction, we’d still need to define how satisfaction is measured. We still need to be clear about what it really means to the user. It is not the same thing a professional that has been given a Blackberry by his employer, for example, to use it for professional email and SMS than a university student that basically might want his phone for chatting, web browsing and facebook logging.

To measure satisfaction, one would need to know the cost a given product has meant to the user, and the expectations he really had about what he got. If we were given a smartphone for the first time for free by an employer of ours, which allowed us to do email on-the-go (assumed our previous phone did not allow us to), we would be very happy with that, regardless the OS (Android, IOS4 or Symbian, for example), especially if it is our company that pays the bill. We would not be more loyal to the handset brand than however loyal our employer were.

As well, if we were to use a Windows Mobile phone after having had an iPhone or Android, our satisfaction/loyalty would be seriously reduced…

As well, there are many factors that can influence user satisfaction or loyalty which might not depend on the handset you are using, nor the OS it supports. What about the carrier service, possibilities or limitations? What about its service plan, the cost of it? For some customer segments, it might be as well important the brand perception or how “cool” might a given device look or feel. We know of many cases where teenagers ask mom and dad for a Blackberry just because mom or dad use one, or just because the most popular mates at school have one each, for whatever reason.

Hard to measure loyalty or user satisfaction, and hard to extrapolate results for predicting future volumes or sales.

We see the current smartphone market more like the case of the youngster that recently got his car driver’s license for the first time. The prospect of moving from being a bike user to driving a car on his own is so exciting to him that he will be the happiest person in the world to have his car, no matter if it is a brand new convertible Ferrari sportscar, or mom’s 20-year old Volkswagen, that she recently replaced by a new one. At the end of the day, both cars open for the kid a new world of possibilities, one way or another, that were so far inaccessible to him.

In a market so much subject to change in very short time frames, conclusions from this kind of surveys should then need to be very carefully managed and understood, we think, making sure one compares “apples to apples” to make those conclusions really valid or useful. By the way, those who prefer Blackberry might prefer to compare “berries to berries”…