Friday, August 19, 2011

Why tech companies are failing

Hewlett-Packard, Dell, and other top PC makers are all losing incredible amounts of revenue because of rapidly falling PC sales. Consumers aren't buying laptops, desktops, or any particular piece of old-style technology right now. They don't have the money. They do have money to spend on essential technology, like cell phones (smartphones) and tablets, depending on what industry they work in. These same PC makers saw the success of the iPad and tried to get in on the mobile computing market. HP came out with the Touchpad and the Veer (a tiny, blackberry-esque smartphone), and Dell came out with their Streak 7 tablet. Their products were cheaper than iPads, ran on the Android OS, and had pretty much the same hardware specs as an iPad.

So what's the problem? Everyone who wanted an iPad already owns one. I bought one for myself a few weeks ago, and I love it. Even though I dislike Apple's corporate culture, I have to admit that their consumer products are consistently in line with what their customers want. People didn't like how clunky and relatively immobile netbooks are (just try to carry one around with you on the subway), so Apple came up with a product as small and light as an e-reader. The result was one of the most profitable business segment ever created by a technology company.

Apple's competitors don't seem to understand a fundamental rule of the tech business; me-too devices never sell as well as innovative products. If any of them tried to one-up Apple in R&D, by offering 4G/WiMAX connectivity and turning their tablets into smartphones, they would've quickly become top gun.

To all tech manufacturing companies; if you want to profit from mobile computing, you can't half-ass your R&D. Spend the time and money necessary to give your customers a good product, and they will thank you for it.

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