In the tech industry the “early adopters” have usually been viewed as bleeding edge technophiles, who just happen to have the discretionary income and/or drive/passion to purchase products at or near launch. In addition to those enamored by the technology there are others who enjoy having (and being seen with) the greatest and newest gadget (often from Apple). But recent events might give some of these “early adopters” pause when purchasing that new-fangled (or “next gen”) device – in fact one could argue consumers are being conditioned to avoid new product launches all together.
While early adopters have always accepted declining prices as an inevitability and the potential for technologies/devices/services they purchase to one day become nonexistent (e.g. DivX from Circuit City – both of which are effectively defunct), the recent actions by several companies could change this dynamic. In other words the value early adopters glean from being among the first to buy a product might soon “fade away.” So what are these events/actions?
The most recent is the HP TouchPad. I will admit I am one of the relative few who purchased a Palm Pre (from Sprint, not long after the phone’s launch) and who happens to still have the device - I’m telling you this because it plays an important role in this discussion. As a “loyal” WebOS consumer I was offered a $50 discount on the 32GB HP TouchPad just prior to the official launch (July 1, 2011). Step forward just over one month and much to the chagrin of early adopters HP offered a $100 discount on both TouchPad models (originally priced at $500 16GB and $600 32GB) over the past weekend and made the price $449.99 for the 16GB and $549.99 for the 32GB – note that Amazon.com still lists the TouchPads for 100 less than the original launch prices. So HP offered a mea culpa to their most ardent supporters and offered these consumers a $50 credit to the application marketplace – as a Palm Pre owner I’m willing to assume the $50 credit is not as valuable as some (those who have not had to deal with WebOS application inadequacies) might presume. WebOS/HP/Palm is but one example.
Nintendo also reduced the price of their 3DS handheld game player in less than 6 months ($80 off the original $250) – not surprisingly this drew the ire of the early adopters as well, to which Nintendo offered an apology and 20 free downloadable games (10 NES and 10 Gameboy Advance games – yes these are old games). Oh, and labeled these Nintendo loyalists “Ambassadors.” Aside from bestowing a title on these early adopters HP followed a very similar tactic – maybe they were taking notes.
Another product that succumbed to the price cutting ax is Logitech’s Revue Internet set-top box. While it has been on the market longer than the previously mentioned devices the price drop was quite substantial ($150 drop from $250) – in addition Google TV had difficulties securing content deals. While this brings the Revue (Google STB) on price parity with the Apple TV STB (and others like Roku) it too might give some early adopters pause in the future when a new product arrives.
With all of these price cuts early adopters might start to think twice before pulling the trigger on their purchases. While price is almost universally important consumers have become particularly price sensitive – likely in response to the economic environment. Add in the rapid price drops, potential problems with services (e.g. Google TV not securing content deals) and the widespread availability of information about new products and the term “early adopter” could come to mean careless, lacking insight, and possibly overly extravagant instead of tech savvy – for most the antithesis of what it means to be an early adopter (for some the last one might be intended).
Apple has largely remained unscathed in this process; in fact the company likely draws in the largest number of early adopters. But if Apple releases a new iPad this year (even a “pro” line), might the company risk perpetuating these potential issues with being an early adopter? Time will tell. In the end this might not be so much a matter of the death of early adopters but rather the need for companies to better assess pricing models and consumer demand/expectations. And if all else fails maybe giving early adopters cool names like “Ambassadors” will help ease the pain when others ask why you purchased the product at launch.
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Tekelec is still stuck in the “business transformation” from SS7-based circuit-switched networks to IP-based next-generation networks. The next-generation products from the Camiant and Blueslice acquisitions, and the new Diameter Signaling Router, are good products, but orders and revenues from these products have been slower than expected. Tekelec is lucky that orders and revenues from the old “established” products are declining slowly and have not fallen off a cliff as some feared; in fact, there was a big one-time order for Eagle 5 in 4Q2010.
In the long run, the outlook for Tekelec’s next=generation products is good. Strong growth in the policy management market should drive Camiant sales, and 4G deployments over the next few years will result in strong demand for all of the next-generation control plane products. Initially, many LTE operators are purchasing complete Enhanced Packet Core (EPC)networks from single vendors, so there should be good potential for Tekelec to sell individual products to upgrade these networks one or two years down the road.
Overall, I like Tekelec’s new products and direction, but it is not a very exciting company. Top-line revenues have been more or less flat for years. The company seems unable to grow the business organically. Tekelec is sitting on a quarter million dollars in cash, so another acquisition to broaden the product portfolio is conceivable. However, with the market capitalization now down around a half billion dollars, their pile of cash might make Tekelec an attractive acquisition target.
Mobile Handset Availability 2011 -- Tread Lightly Through The NFC Mobile Payments Hype
Aug 5, 2011 12:00:00 AM / by Admin
Intellectual Property Revenues Important for Advanced TV Vendors
Aug 4, 2011 12:00:00 AM / by Admin
Now is the time to litigate patents in TV middleware functions including DVRs, interactive advertising, VOD and TV Apps. Advanced middleware, DVR and advertising solutions are important revenue generation and protection strategies for major MSOs, and vendors feel that a product plus patent approach gives them the best chance of success in the marketplace.
SOTs May Give OSS/BSS Vendors a New Entry Point into the M2M Market
Aug 3, 2011 12:00:00 AM / by Admin
“Service optimization tools” (SOTs) may provide a means for traditional OSS/BSS vendors to re-invigorate their efforts to gain traction in the cellular M2M market, in which they are currently regarded as playing “catch up”. The key idea is that SOTs form a layer between the M2M service delivery platforms (SDPs) that are either built in-house by the mobile network operator (MNO) or are acquired from third-party firms, such as Jasper Wireless, and the MNO’s core network. SDPs are a form of OSS/BSS tailored to the specific needs of M2M services, providing such tools as automated bulk provisioning and customer self-management of devices. However, specialist SDP vendors have largely taken the lead in this market, and the window of opportunity for traditional OSS/BSS vendors to win MNO partnership deals in the M2M space is rapidly drawing to a close.
Telit Buys GlobalConect and Expands Its Strategy in the M2M Market
Aug 3, 2011 12:00:00 AM / by Admin
In July 2011, Telit Communications – a leading global provider of embedded cellular M2M modules – announced it had closed the acquisition of GlobalConect Ltd. for an offering of $2.9 million in cash and stock. GlobalConect Ltd. is a provider of cellular connectivity services for M2M applications, similar to a company like KORE Telematics or Numerex (albeit a much smaller company). Telit’s CEO, Oozi Cats, is quoted as saying, “Adding wireless connectivity to our offering is an important factor for Telit’s continued growth and success. Our customers expect superior M2M solutions from one source and with the acquisition of GlobalConect we will now be in a position to address their needs more comprehensively.” Apart from the assertion that customers want a single source M2M solution, what factor likely had the most impact on the decision to acquire GlobalConect Ltd.?
It's a testament to media hype and the 24-hour news cycle that Square, the payments darling, is called a mobile payment.
How, exactly, is Square a mobile payment?
Square can help a merchant get rid of legacy payment terminals and use an iPhone to accept a credit card payment from a consumer. The consumer hands the merchant a PLASTIC credit card, which is then run through a mag stripe reader attached to an iPhone. That is not a mobile payment -- it's a merchant solution for getting rid of payment terminals.
In my opinion, mobile payments should be defined as a payment made by a consumer which in some way involves THE CONSUMER'S MOBILE DEVICE OR ACCOUNT. This mobile payment could be remote -- (examples -- using your mobile phone to shop online, using your mobile to make or receive a person to person payment, using your mobile to pay utility or other types of bills, using your pre or postpaid mobile account to make a purchase.) or local (ex: using your phone to make a payment in a physical location, examples are ISIS, Google Wallet, AisleBuyer, FaceCash, Modiv Mobile, Starbucks prepaid card on your mobile, etc.).
There's enough confusion about mobile payments as it is. Let's not make it any worse.
Sprint and LightSquared Megadeal Will Shake Up the US Wireless Industry
Jul 29, 2011 12:00:00 AM / by Admin
Given the numerous advantages of the cellular-enabled POS terminal, its remarkable growth in recent years is unsurprising. What is surprising then, is the notion that this type of device could already be set tomake way for alternative technologies. However, an increase in the use of consumer electronics as payment devices hasalreadyled some to suggest that thisis the way the market is heading.
With the growing ubiquity of smartphones, and to a lesser extent tablet PCs, a whole host of companies have begun to offer solutions that let consumers harness the portability of their personal devices and empower them to accept payments. Such companies include: Square,Apriva, CHARGE anywhere, wCharge and Adelante, amongst others.As long as they have access to a compatible payment processing service, merchants previously reliant solely on cash can offer their customers the ability to pay by card using their existingdevices (and thus avoiding the need to invest in additional,expensivepayment equipment).This could well beappealing to those who largelyconduct theirbusiness remotely - e.g.handymen, taxi drivers, gardeners,private tutors etc.
But will this technology impinge on the overall market for the traditional wireless POS terminal?
When conducting researchfor a new reportonthe integration of cellular connectivity in the payments industry, I spoke toa leadingvendor about this verysubject. Askedifsmartphone- and tablet-based solutions would eventuallycannibalise the POS terminal market, theparaphrased reply was succinct: “Yes, but only to a very small extent” and I’d have to agree. Off the top of my head, two reasons why there won’t be mass-adoption of payment-enabled consumer electronics immediately spring to mind:
- There is ageneral warinesswith inputting one's card details into a phone/tablet PC that will almost certainlypersist.
- Phones/tablet PCs are high-value consumerdevices.Should a thief decide they want one, the merchant isn’t losing a POS terminal per se; they are losing a multifunctional device.
Pros and cons aside, one thing is almost certain – growth in the total available market for mobile payments (be they smartphones, tablets or mobile POS terminals) will continue apace.
TomTom’s Q2 2011 Results: Where is TomTom’s Mobile Strategy?
Jul 27, 2011 12:00:00 AM / by Admin