Wednesday, 8 December 2010

Legacy’s cost


“Number 2 is just the first one of the losers”, says a very famous motorbike racer who has been World Champion many times (still not retired) who loves being the fastest one.

This would be too radical a view when we have a look to any market, where there is not just one winner. It would actually be impossible under antitrust regulations.

However, the quote from Valentino Rossi (which is the biker’s name, as many bike fan’s might have guessed) can be understood in the context of what is currently going on in the smartphone market (and eventually in the tablet’s too), where old kings are running the serious risk of being phased out from their former positions.

Of course there can be space for them, and we actually believe there will always be, in fact. But it is really hard to accept being below second rank after past history dominance.

RIMM, Nokia, though still hitting very important volumes, might well be in that situation. The issue is the trend, clearly decaying, and the chance that they still base their current results on legacy. .

Legacy of corporate business and systems that have an enormous cost of change. Legacy of users who are provided a phone by their companies that might be used for personal purpose. Legacy from past experiences and resistance to adapt to new phones from previous ones.

But legacy has a deadline and does not last forever. History proves legacy is not enough, and costs empires. Ask the British about India, ask the French about Indochina, ask the Dutch about their Indies, or ask the Russians for the “xxxstan” republics. there is still a Britain, a France, Netherlands and Russia… but where did their empires go?

The sound of silence


It is common to hear that no news equals good news… but it does not really seem the case for the guys at Microsoft regarding their mobile phone story.

Silence, as in that famous tune by Simon and Garfunkel, can be really loud, even more than the cheerful reporting when success is there, like it happened with Kinect.

Silence as well about the potential upgrades that are badly needed does not help either. When will the famous “cut & paste” basic feature show up?

The more they wait, the smaller chunk of the pie they’ll get, though they still have the potential benefit from the corporate and enterprise market, that to much extent has a Microsoft based IT. But even there, RIMM and Nokia can be too far it they keep on slowing down, or if they fail to move fast. Even the slowest of the slowest, that is, Palm, might move ahead of them if they ever start. Particularly if they deliver a confusing message to this segment.

The market does not wait for sound names and brands if they do not really deliver.