The Microsoft Tablet Disaster was so easy to Predict

bgr-surface-red-touch-coverWell, that was quick.  Nine months ago, Microsoft made a big deal about getting into the Tablet business. And now nine months later, Microsoft is writing off $900 Million worth of Tablets that have been occupying a warehouse.   Not only the major write off, but now that the outlook and confusion of what’s next for Microsoft looms, the stock price dropped 10%, losing $30 Billion in market value.  Ouch.  

I hate being right!!!  I just hate it. The reason I hate it, is because it seems like the obvious should be obvious to everyone.  This tablet launch just had disaster screaming all over it.  Sometimes the answers are so obvious, yet people are blinded by not asking the right question.  They just go ahead with wrong answers. For Microsoft, they missed a bunch of right questions?  

Q: What business are we in?   
A: We do software really well.  Especially when we are in a monopolistic position.  We kinda suck at hardware.  Did you see what we did on Zune?  That wasn’t pretty.   

Q: Do we have a leap-frog technology? Is the Microsoft Surface product better, different or cheaper?  
A: Not really different.  It’s like a really nice iPad with a very bad and cheap plastic lid. And better?  Well it is better than a tablet, which people use for fun.  But it’s nowhere near a Macbook Air which people use for work.  So we’re better than one and worse than the other.  We’re a bit confused but we hope the consumer gets it.  And we are going to charge a significant premium, because we are Microsoft and we always do.   So I guess it’s not really better, cheaper or different.  But, we have lots of resources and stores of our own.  Well, not a lot of stores, and they aren’t very crowded.  But we hope this does well? 

Q: Will it be pretty easy to communicate the point of difference?
A:  Not really easy.  We are going to do ads with geeky people dancing and closing the lid. A lot.  People might think they are laptops.  But we’ll press the screen so they know it’s like their iPad, only it has a lid.  We won’t try to out-cool Apple.  We’ll try to be cool, as in “the coolest kid in the Science club” kind of cool.

Q: Apple is already on their 4th tablet and likely has 3 years of incremental innovation in the pipeline?  Samsung Galaxy is an amazing product and they are killing it on cool innovation.  Do we have any R&D innovation beyond the initial launch?    
A:  No.  Is that a problem?  

Q: If we are so good at software, and the world has moved to Apps, which is sort of like software, why don’t we take all our energy and expertise in the software business and start applying that to Apps?  
A:  Wow, that’s a good question, but we’ve already ordered the plastic lids for the Tablets.  Why don’t we do both.  But truth be told, we kinda suck at Apps.    

These questions would have allowed us to look at the vision, promise, strategy, story, freshness and culture that would showcase how ill prepared Microsoft was for the Surface launch. Here’s an example of how a brand like Special K uses the promise, story, freshness, and culture to help guide their brand.

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Answering these 5 questions also helps to map out the Microsoft Brand Strategy Road Map.   It might also highlight how wrong the surface is to the overall Microsoft brand. Here’s an example of what the Brand Strategy Road Map looks like.

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Predicting Disaster Was Pretty Easy

In the spirit of predicting this disaster, I wrote a story last June on the how the Microsoft Surface would be a disaster.  Like I said, I hate being right.  Click on the story below:  

Why Does Microsoft Keep Copying Apple?

At the time, the response i got back was 50/50, with half of the people criticizing the Microsoft Surface launch and the other half criticizing me for criticizing the Surface launch.  I always figure 50/50 is a good ratio to stir the pot.  But, I was starting to think I might be going overboard on being an Apple lover.  Here’s a summary of my view.

Getting into the Tablet Business Feels like Zune

Getting into hardware is a big gamble and not something that fits with Microsoft’s strengths.  To be a success, you either have to be better, different or cheaper and this feels like none of those.  Just like the Zune, it feels as though they are late and aren’t really offering anything that’s a game-changer to the category.  Like most categories at the stage where tablets are, until someone really shakes it up, the next few years are likely all about constant small innovation, new news each year with Apple leading the way on the high-end and Samsung’s cost innovation will likely squeeze Microsoft right out of the category.  The analysts are so excited by the launch that the MSFT stock price is down 1.3%.

The Best Strategic Answers Start with the Best Strategic Questions

 

To read more on How to Write a Brand Plan, read the presentation below:

email-Logo copyABOUT BELOVED BRANDS INC.:  At Beloved Brands, we are only focused on making brands better and making brand leaders better.Our motivation is that we love knowing we were part of helping someone to unleash their full potential.  We promise to challenge you to Think Different.  We believe the thinking that got you here, will not get you where you want to go.  grOur President and Chief Marketing Officer, Graham Robertson is a brand leader at heart, who loves everything about brands.  He comes with 20 years of experience at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke, where he was always able to find and drive growth.  Graham has won numerous new product and advertising awards. Graham brings his experience to your table, strong on leadership and facilitation at very high levels and training of Brand Leaders around the world.  To reach out directly, email me at graham.robertson@beloved-brands.com or follow on Twitter @grayrobertson1

 

At Beloved Brands, we love to see Brand Leaders reach their full potential.  Here are the most popular article “How to” articles.  We can offer specific training programs dedicated to each topic.  Click on any of these most read articles:

Ask Beloved Brands to run a workshop to find your brand positioning or ask how we can help train you to be a better brand leader.

Apple is Facing Major Declines…

Those are fighting words for most Mac, Iphone or Ipad users.  If you are in the Apple tribe, that headline probably gets your blood boiling, ready to call me an idiot and tear into this blog.  But, I don’t really mean it.  I hope that you’re totally upset, so I can prove a point, as to how loyal Apple users are.  So relax and enjoy the article.  It’s all about how great Apple is.  In fact, I’m typing on my Mac as I speak, with my Ipad charging away about a foot away.   I could not live without my Ipad–stylus and all.

A few weeks ago, someone asked for a good marketing book to read.  I said “Have you read the Steve Jobs biography, because that would be a great starting point.”  I do believe that aside from his craziness, Steve Jobs is the best marketer of our generation.  Everything he did was about the consumer, not just in taking their feedback but in guessing what they might want next.    He was committed to the art of marketing, from the design in the product and software right down to some of the best advertising of our generation whether it’s “1984” or “I’m a Mac”.  He was obsessive in his committment.  He had to love the work or he’d reject it.   His bar was exceptionally high.

For Apple to this point, it has all been about Steve Jobs and thinking differently.  With his own voice, here is what makes Apple great.

Brands travel along the Love Curve, going from Indifferent to Like It, to Love It and finally become a Brand For Life.  When you achieve the ultimate status as a Beloved Brand, demand becomes desire, needs become craving and thinking is replaced by feelings.  And, Apple is the most loved of all Brands.  When you love a brand like Apple, you are loyal, unrelenting and outspoken.  Try saying something negative about Mac to someone in the tribe and watch out.  That’s like knocking their favourite sports team.   To Apple users, it’s very personal: you are possessive of your Apple brands you own.  It’s extremely emotional for you, certainly not rational.

Nothing comes close to what Apple has done over the past 10 years, whether it’s in desktop computers, laptops, mp3 players, smart phones, tablets and even the retail space.  Three times this year, I’ve walked past an Apple store before the mall opens, and there are usually 10-15 people waiting for the doors to open up.  I’m sure every retailer would love that.

Samsung and Microsoft are strong brands, but stuck at the Like It stage.  While consumers gladly buy their products, no one is going to stand up and defend them.  People are indifferent about Brands like Dell and HP who have commoditized laptops, charging a slight premium, but barely.  Even Sony has fallen from grace, recently announcing billions in losses.  If you are born before 1975, and rarely buy electronics, you still think “wow, that’s a great price on a Sony”.   But that group gets smaller every year.  The HTC brand only wins from carrying Android, but no one really cares they have an HTC phone.

Apple has an amazing brand following.  It’s like a tribe of loyalists ready to speak out and defend the brand.   How have they done this?

1.  Products that the consumer doesn’t even know they want yet:  While in the technology field, Apple has never done the better mousetrap.   Apple is all about the consumer.  Apple has an invention mindset.  It’s more than just making money.  They want to make a dent in the universe.  It’s about thinking different and delivering something the consumer could never have imagined.   Apple carefully considers what consumers are looking for.  They are completely meticulous in the planning and design stage.  They keep things plain, simple and so easy-to-use products not only to make the consumers happy, but also make them want to buy more products in the future.  Apple is an idea connected to simplicity, not just a series of products.

“You’ve got to start with the consumer experience & work backwards to the technology.  You can’t start with the technology & try to figure out where you’re going to sell it”

Steve p. Jobs

2.  Are You a Mac?: Let’s face it, Apple is a cool, hip brand. It pushes a strong identification with everything young, up-to-the-minute and smart.  The “I’m a Mac Campaign” was brilliant in not only defining the Mac brand as smooth, confident and cool, but defining the PC brand as old, uptight and awkward.   At the height of this campaign I was in a crowded bar that went immediately silent when one of the “I’m a Mac” TV ads came on.   Also, many of the Apple products have separated themselves from the competitor, whether it’s the white headphones on the iPod, the number of apps for Iphone and Ipad or the cool sleek designs of the Mac.  Not only that, the Apple store is a store just for Apple users.  My mom, who is 77 and a recent ipad user has been to the Apple Store numerous times, taking some of the courses or just asking for help.

For fans of the “I’m a Mac” campaign, here are 15 ads.

3.  An Obsessive Commitment to the Consumer and the Apple Brand.   Stemming from Steve Jobs, the entire company is committed to simplicity in design and functionality.  Whether it’s the rounded edges, colour choices for product or the Glass on the Apple stores, there is a certain obsessive behaviour.  Sometimes you wonder if it’s worth it, but would Apple be Apple if it wasn’t for these obsessions?

Apple leverages this obsession to create consumer loyalty.  Looking at the phone industry loyalty data, Apple has by far the highest loyalty of any brand:  over 90% of their consumers love the Iphone.  Brands like HTC, Blackberry and Sony have scores in mid 60s while Samsung has only 57% prefer the Samsung.  Creating the tribe is great, but Apple delivers satisfaction to their consumers.

To be a Beloved Brand, you must love the work you do.   If you don’t love the work you do, how do you expect your consumer to fall in love with your brand?   Brands that are stuck at the like stage settle for ok.  Beloved Brands like Apple start at great and still push to make it even better.   They are never satisfied.

The more loved the brand, the more valuable the brand.  The tight emotional connection with the consumer becomes a source of power it can leverage whether that’s with consumers themselves to pay more, stay loyal or buy more products.   Plus, that power can be leveraged with retail partners, suppliers or competitors.  

In 1976, early in the life of Apple, Ronald Wayne decided to cash in his 10% of Apple for around $800.  If he held onto it, that 10% would be worth $56 Billion.  Mind you, we have all missed out on quite a few investment windows over the years.  If you had put $100K into Apple in 2003, you would have around $10 Million!!!   You wouldn’t be complaining about the economy, wondering who to vote for in the fall.  But unfortunately, I didn’t know Apple would do so well.  Has the Apple brand peaked?   Hardly: Apple has gained 81% in market cap the past 12 months.   I missed that window as well.   

My hope is that momentum can continue.  Not because I have invested money, but because I’m emotionally invested.  I crave what’s next, even though I can’t even imagine where they will go.

About Graham Robertson:  I’m a marketer at heart, who loves everything about brands. I love great TV ads, I love going into grocery stores on holidays and I love seeing marketers do things I wish I came up with. I’m always eager to talk with marketers about what they want to do.   My background includes CPG marketing at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke.  I do executive training of executives and brand managers, helping on strategy, brand planning, advertising and profitability.