by Mark P. McDonald | April 25, 2011 | Comments Off
Cisco announced late last week that it was discontinue the FLIP video cameraas part of the company’s restructuring of its consumer oriented businesses. The announcement generated numerous blog posts and articles around what the demise of the FLIP means to the state of tech.
I think that there is more to this story than just a simple tale of tech start-up’s rise, maturity and fall. This is a tale of disruption that involves more than one company or one product. It is a story that may portend the continued reshaping of the industry.
So without taking sides, here are a few thoughts and observations.
- Design Matters, but good design can be disrupted by good enough design and convenience. (Prior post)
- Consumer technology margins are a disruptive force that will reshape High Tech Strategy and market choices (Prior post)
- The bar for dedicated devices is higher than many anticipated (This post)
These thoughts are my own and based on nothing more than thinking about the implications that may be foreshadowed by this announcement.
The bar for dedicated devices may be higher than we imagined, so high as to reduce the relevance of dedicated devices.
The FLIP was a classic dedicated device. It did one thing really well — easy to make videos. The demise of the FLIP in the face of video features in smart phones provides an indication of the performance premium dedicated devices need to have over their multi-task devices. The bar seems to be very big and perhaps getting bigger than people have imagined.
Conventional wisdom held that there is enough room for both multi-purpose and dedicated devices. A dedicated device, also called an appliance, is something whose function dictates its design. Early cell phones that could only make calls were dedicated devices, the first Palm Pilot or the Apple Newton, were also dedicated devices. The value in the dedicated device rested in the performance of its function.
Appliances were thought to have a market so long as performed that function better than a multi-purpose device. Appliances initiate a new market where their particular focus — easy to use video intended for the web – requires focus and integration of focused technologies. Appliances remain relevant based on their performance and the comparative performance gap with what is available in the general market. When this happens, professionals or enthusiasts become the core market, as they demand more than the ‘good enough’ performance available on a multi-purpose device.
However, what constitutes good enough is getting better all the time.
The problem is that multi-purpose devices are gaining capability faster and taking over both markets. The latest Gorillaz album The Fall was recorded on an iPad, broadcast video shorts are being shot with smart phone cameras, and Motorola’s ATRIX seeks to replace the personal computer via hardware add-ons. There are other examples, but they all point in the same direction – multi-purpose devices are increasingly taking on and beating their appliance-based competition. The FLIP is just the latest victim of this trend.
What does this mean and why should CIOs care? A few thoughts.
Multi-purpose devices are the next set of generative technologies
On the upside, the capacity and capability of multi-purpose devices illustrates the power of ‘generative’ technologies. A generative technology, as described by Jonathan Zitrain, is one that is the basis or platform for future innovation. The PC is a generative platform and it seems like smartphones, either Android or Apple based, are generative platforms. This is good as a generative platform unlocks new avenues of innovation and value.
CIOs and IT executives will need to start to view mobile devices as such a platform rather than the last node on a distributed network. CIOs, architects, infrastructure personnel and the like will need to adopt new attitudes to the smart phone.
A smart phone is not an undersized, underpowered PC. CIOs and IT professionals should not be thinking of a smart phone as part of a spectrum of PC’s. Increasingly, a mobile device is a new platform in its own right with its own trajectory and development path. Smart IT shops are recognizing this and creating processes, teams and strategies around developing for two generative technologies: PC and Mobile (which includes tablets)
The downside of the demise of the appliance is two fold. Appliance based innovation, generated from new configurations and capabilities of hardware will be fewer in number and shorter in market viability. If a hardware capability can be derived form or relies on data, then the window seems to be about two to three years in the marketplace. This will curtail some of the innovation generated from hardware.
CIOs and IT leaders may take a wait and see approach before seizing opportunities created through appliance-based innovation. The capabilities of dedicated devices, particularly those that have broader appeal, will be incorporated into multi-purposes devices. This means that CIOs seeking dedicated device performance should consider two things: first is the capability something the mass market will want? Second, is there a reasonable standard of ‘good enough’ performance that will be good enough for me? If the answer to both of those questions is yes, then you may want to take a pause on the appliance or at least recognize that any investment will have a short life in the field.
These are big changes to the direction of IT, illustrated by the demise of the little FLIP camera. Me, I will still keep using my FLIP as I have it, it works and I do not mind carrying two devices. For others though and for me in the future, we will all have to think twice before investing in appliance-based technology as increasingly multi-purpose tools can and will replicate/disrupt that innovation.
The bar for dedicated devices is higher and it may eventually be too high for the mass market in which we all live.
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