 |
| |
The ChannelMedia Top
10
By Keith Newman, Editor-in-Chief
1. How was this Xmas for Microsoft?
It depends who’s counting, who you are asking, etc. Few I’ve
spoken with are crowing about XP or raving about Xbox. By the way,
I’m no Microsoft basher but it seems there are questions about
the stability over latest rev of the operating system and as far as
Xbox goes, its just a little pricey for what I believe consumers were
looking to pay for this holiday season. That, and there isn’t
much great software and it’s a new product for a new company
in the console space. That said, the numbers on XP and Xbox appear
stronger than I would’ve guessed. According to published reports,
retailers sold 250,000 copies of Windows XP in November, its first
full month of availability, slightly down from 400,000 in October.
And remember, Microsoft sells most of its OS product to its OEM partners
(Gateway, Dell, Compaq, etc.), Just go and try and buy a new PC without
XP! On the game side, Sony sold 1.4 million units of the PlayStation
2 in the United States in the fourth quarter through Dec. 8, according
to sales figures tallied by NPD and compiled in a report released
by Credit Suisse. Microsoft trailed slightly, selling 934,000 copies
of its Xbox through Dec. 8. Nintendo came in a more distant third
with 615,000 units of its GameCube console. The Xbox went on sale
Nov. 15; the GameCube debuted Nov. 18. Xbox sales were on track to
reach 1.5 million units by the end of the year, in line with the high
end of Microsoft's estimates, according to reports. To my discerning
eye, this has to represent a victory for Microsoft given the huge
head start Sony and Nintendo have in the category, channel and with
software makers.
2. Amazon has just what you are looking for in 2002. Profits? No,
besides that. They are popping with yet another category store called
“The New You.” This “store” features a wide array
of products designed to meet health, mind and body needs -- from books,
to fitness videos and DVDs, to self-pampering spa sets or Aromatherapy
machines, paraffin baths and facial sauna. What do you think? I know.
What happened to profits?
3. According to one online report, Americans spent $2.6 billion online
during the first week of December, jumping 91 percent from the $1.4
billion spent during an average week in November, according to data
from the eSpending report by Goldman Sachs, Harris Interactive and
NetRatings. "The surge in online buying is a critical first sign
that online spending in December will increase faster than November's
modest 10 percent annual growth," said Sean Kaldor, vice president
of analytical services at NetRatings. "For a successful December,
consumers will need to maintain these aggressive spending levels for
the next two weeks."
4. Nielsen/NetRatings announced the top e-tailers for the month of
November, with Amazon.com leading the way with 31.5 million unique
visitors. Traffic to the site jumped 32% since last year, marking
a record high for 2001.
5. Anyone still believe in pure plays? Among the top 10 e-tailers…Toys”R”Us
(3), Barnes and Noble (4), BestBuy (6), Wal-Mart (8) and Sears (10).
6. Thoughts or concerns about vendors selling direct? Apple (5), Dell
(7), HP (9).
7. Sell deep and often. With the popularization of “purchase
online and pick up offline (at the nearby store)” this year is
seeing a strong increase in customers who are surfing for best pricing
and availability and then ordering and picking up at the store. As
a result, online selling is going much deeper into the holiday season
this year. Sources we spoke with say more and more customers are using
this “pick up” feature and it is particularly hot with products
that lend themselves to some pre-purchase research (i.e. computers
and electronics). Technology is also critical on the back end as systems
need to identify the order, confirm its availability in inventory,
deliver it at the right place and time. On the plus side, it all but
guarantees that if an order is confirmed it is in stock thus creating
a near “virtual” inventory situation. (If you don’t
have this feature available now, start exploring! Many of your customers
will likely appreciate/demand this feature. (i.e. partner via players
like Amazon-Circuit).
8. Radio Shack is looking to close 35 stores and shed a variety of
product categories that are not hitting their profit targets (car
stereo, big screens and security systems). What’s hot are cell
phones, batteries and other electronics accessories.
9. The Fun and Games continue at EB. The retailer reported a 6.3%
rise in Q3 sales to $169M and net income doubled to $2.9M. PSX, Game
Cube and Xbox should continue to put cheer in this retailer and those
of similar gaming ilk.
10. Yahoo reported that sales over at Yahoo! Shopping showed an increase
of more than 86% over the same period the prior year. Yahoo! Users
spent $10.3 billion online in the fourth quarter of 2001. Bargain
shopping was one of the big themes that prevailed this year as numerous
merchants enticed consumers to shop online by offering exclusive online
sales or attractive discounts. Among the top categories: videogame
systems, digital cameras, laptops. Interesting, they are promoting
themselves as retailers and they just bought Hot Jobs.com for $480M.
It seems to me like this is a company still figuring out what it wants
to be when it grows up?
11. GartnerG2 predicts that by 2005, online advertising will be an
$18.8 billion market in the U.S., up from $7.9 billion in 2001. Whew!
And I thought I was in the wrong business.
Keith Newman is the Editor-in-Chief of ChannelMedia. He can be reached
at keithn@telocity.com.
(top of page)
|
 |
| |
PS2 titles outsell all major rivals' titles combined
By ChannelMedia Staff
Video games for Sony's PS2 console
outsold titles for all of its major rivals combined in the first half
of December, according to a report released Wednesday. Games for PS2
held eight of the top 20 sales spots and represented five of the 10
best-selling titles over that period, according to NPD. The top-selling
game for the first half of December was "Grand Theft Auto 3,"
published by Take-Two Interactive Software for the PS2. Three of the
four Xbox titles that were among the top-selling games in November
did not make the early December list. The only Xbox title to carry
over was the futuristic war game "Halo," published by Microsoft.
Good Guys named Kenneth R. Weller, president and chief executive
officer, as chairman, to succeed Ron Unkefer, who is retiring as chairman
and as a board member. Unkefer remains the company's largest individual
shareholder. In 1993, following an 11-year career at Good Guys, Weller
left the company and joined Best Buy as senior vice president
of sales, where he was responsible for 120 stores and more than $7.0
billion in revenue. Weller also led Best Buy's expansion throughout
the western United States, opening more than 60 stores in seven years.
More Good: Good Guys unveiled its completely redesigned Beverly
location that will serve as a prototype for future remodels and in-market
expansion. "Good Guys Beverly represents a dramatic departure
from traditional retail merchandising for consumer electronics,"
said Cathy A. Stauffer, executive vice president of merchandising
and advertising, Good Guys. "By making products more inviting
to customers and easier to understand through high-impact graphics,
detailed product information and interactive displays in an open,
sales-assisted environment, Good Guys is taking the complexity out
of shopping for entertainment electronics and helping customers make
informed purchasing decisions that will enrich their lives for years
to come." Good Guys Beverly features compelling, theme-based
lifestyle imagery, original fixture designs and interactive displays
that create individual product and category identities and encourage
customers to linger and explore the entire store. The store boasts
eight touch-screen kiosks and three gaming modules that demonstrate
the Sony PlayStation and Nintendo GameCube gaming platforms, which
Good Guys is introducing as part of a test at its Beverly location.
Merrill Lynch comments on Best Buy, saying New York
region stores continued to comp at strong rates according to store
personnel; believes DVD hardware sold well throughout the chain as
inventory is heavily depleted. Notes that PC hardware department experienced
continued moderation in rate of decline, a positive trend; software
sales were solid with video games and movies offsetting flat music
segment; gross profit comps likely rose at much higher rate than same-store
sales as promotions did not ramp up last two weeks of Christmas.
Two suffering B2B marketplace vendors have tied their ships to each
other. Verticalnet acquired Atlas Commerce, a leading
provider of private exchange software and strategic sourcing applications.
The acquisition expands Verticalnet's offerings to a broad Collaborative
Sourcing Solution that delivers superior functionality through an
integrated, multi-enterprise exchange platform.
Roughly 537 Internet companies folded in the past year compared with
225 in 2000, according to Webmergers.com, a company that provides
research to the Internet industry. E-commerce and content sites were
hit the hardest over the past two years, comprising two-thirds of
sites that failed in the harsh climate of a crashing economy and anemic
stock market. E-commerce companies accounted for nearly 35 percent
of the failures in 2001, down from 54 percent in 2000, while news,
entertainment and other content sites made up 24 percent of the shutdowns
in 2001, and 27 percent in 2000.
Apple Stores will post a slight loss in fiscal year 2002. Earlier,
Apple said it expected the more than two dozen stores to break even
in the first fiscal quarter of 2002, which ends this month, and to
achieve a slight profit for the full fiscal year. Apple said it anticipates
capital spending of $200 million as it opens an unspecified number
of retail stores boosts its information technology infrastructure
and replaces existing assets. Following double-digit growth in fiscal
year 2000, Apple saw double-digit declines in 2001. U.S. sales, for
instance, dropped 30 percent to $3 billion in fiscal 2001. Sales of
iMacs declined 45 percent, from $2.2 billion to $1.2 billion. Only
the iBook, the company's consumer portable, saw sales rise.
Belkin was recently awarded six "Innovations 2002 Design
and Engineering Awards" at this year's International CES. "As
a company, Belkin continually strives to create innovative, imaginative,
and exciting new products," said Eric Tong, director of marketing
and product development. "Winning six CES Innovations Awards
goes to show that the industry as a whole sees that we are doing just
that," he added. For more information, call 1-800-2BELKIN, or
visit the company's Web site at www.belkin.com.
Softbank Founder and CEO Masayoshi Son resigned from the Board
of Ariba, a large b2b marketplace vendor and Softbank said
that it was reducing its stake in another major investment, Yahoo!.
Also last week, Softbank announced it would sell a 3 percent stake
in Yahoo! to SBC Communications Inc. On Nov. 20, Softbank posted a
group net loss of 54.3 billion yen, or $441.2 million for the first
half of the year and gave no forecasts for the full year through March
2002. Softbank has investments in more than 600 Internet firms.
Insight said that their Web business has seen a boost in December
due in part to the upcoming Insight.com Bowl game. According to Timothy
A. Crown, chief executive officer, ``We're excited to see Insight's
customers take control of their purchases by customizing their Insight
Web experience to maximize the benefit they receive from our technology.
Our Web site features the largest selection of technology available
online and business customer-focused tools to make your buying experience
convenient and efficient.”
Going Hardcore. Blockbuster started offering a special 30-day
rental pass for $29.99, allowing one game rental per day. But the
offer expires on Jan. 31. "The games pass program is really just
for the holiday season," spokeswoman Liz Greene said. Game rentals
represented 9 percent of Blockbuster's revenues through the third
quarter, she said, and are expected to be 12 percent to 14 percent
of revenues in 2002. Meanwhile, BestBuy.com said it has begun
offering PCs made by Alienware, a manufacturer of custom systems with
high-end sound and graphic components specifically for video game
play. BestBuy.com said it was the first online retailer to offer Alienware
high-end systems, which cost anywhere from $1,385 to $2,295.
By ChannelMedia Staff. Additional reporting from various news and
wire services. For information you would like to see included here
contact keithn@telocity.com.
(top of page)
|
|
| |
One
to watch: USB on the go!
By ChannelMedia Staff
A new peripheral technology is expected
to be introduced this year that will reportedly provide users of multiple
mobile devices with a new way to interconnect the devices, as well
as connect them to their computers. It is an adaptation of the existing
Universal Serial Bus (USB) technology that now is a standard method
for connecting most peripherals to computers. While it has replaced
the serial and parallel ports on computers, technical issues prevented
it from becoming a mainstream technology for devices such as MP3 players,
cell phones and digital cameras. Called the USB On-the-Go (OTG), it
is a supplement to the existing USB 2.0 specification that will provide
portable devices to serve as hosts to additional USB devices, without
the need for a PC host, as was previously required. Any product that
wants to use the technology will be required to undergo USB compliance
testing in order to qualify for the USB logo. It specifies a smaller
connector that requires less power so that it can fit easily into
a mobile products design footprint.
The technology has wide industry support, with Ericsson, Intel, NEC,
Microsoft, Motorola, Cypress, Palm, Philips, Hewlett-Packard, and
Texas Instruments all contributing to the drafting of the standard.
Cypress has already released silicon that hardware OEMs can incorporate
into products and the first peripherals are expected later this year.
The OTG supplement will allow devices to have a limited host ability,
enabling it to operate with other USB OTG equipped devices as well
as being supported by a PC. Currently to have two USB peripherals
communicate with each other a PC is required as the medium. By eliminating
it, a cell phone can directly transmit pictures taken from a digital
camera, for instance.
Not all OTG devices would be able to serve as hosts however. Only
OTG devices that are advertised as dual-mode. In addition they would
never be the host when attached to a PC. Another break from USB tradition
is that there will not be universal support. The USB OTG specification
will not be required to support all USB device types, although in
the future that could be added. The technology looks to be in direct
competition with other short-range technologies such as Bluetooth
and the various shades of 802.11; it does appear that it will have
a niche of its own. The ability to control other devices from say
a cellular phone could be very popular. However, it will have to deal
with the appeal that the other technologies, especially Bluetooth,
have in not requiring physical cables to connect them.
Whether USB can replicate the success it has achieved on the desktop
in the mobile peripheral market remains to be seen. The OTG technology
is behind the development curve compared to some of its rival technologies.
However the backing of so many major players in the PC and communications
market does provide some advantages to help it catch up quickly.
(top of page)
|
|
| |
Learn
from the Present
By ChannelMedia Staff
Those who theorize the universe is shrinking
need only to have ventured to Internet World in Manhattan this month
for depressing confirmation. A show that once filled two or three
floors of the massive Javits Center this year barely took up half
the main floor--and that's after combining with the likes of the Streaming
Media East show.
Companies typically banished to the basement found themselves placed
in prime real estate on the main floor, leading to sometimes-odd juxtapositions.
Visitors could, for instance, hit AOL co-chief executive Robert Pittman
at his outsize AOL booth with a bean ball from Switzerland's Business
Promotion Central. Despite the obvious decimation, Pittman painted
a rosy picture for the Internet, saying it had reached "critical
mass" with two-thirds of U.S. households, and adding, "The
revolution is just beginning."
To shell-shocked show-goers, the revolution nearly began when he abruptly
ended his brief speech with this zinger: "Every other piece of
the Internet [but advertising] is moving forward as if nothing bad
were happening in the economy.”
Retailers of any type were non-existent on the show floor, and those
companies that were dot-coms were reluctant to admit it.
Dot Com Distributors, an Edison, NJ-based company that sprouted two
years ago to handle fulfillment of e-commerce orders, has switched
to a "multi-channel" mode, shipping now to traditional retailers,
said Doug Sternberg, vice president of sales. The company is considering
changing its name, but is having second thoughts because the dot-com
connotations are so horrible that he believes people will remember
it.
Angela Kapp, a consultant with Angela Kapp Consulting, said during
a conference that Sternberg's multi-channel strategy is clearly the
way to go. She challenged attendees to name a single online-only retailer,
then shot down all comers with evidence of their direct mail or catalog
sales--including Buy.com.
Two other observations.
The days of lavish spending and giveaways are over. Alan Brody, executive
program director of the Silicon Alley Breakfast Club, a networking
event, complained of certain "homeless" elements among the
Internet World crowd not seen at past events. He then lifted a sheet
of paper from a dish of Hershey's Kisses he'd been hiding to avoid
being cleaned out. "There were people coming by taking six at
a time!" he said. Lastly, the days of wearing shorts, T-shirts
and an attitude to the convention are fading fast.
At the booth for SuperUpdate, a startup content management company,
all four college-grad company executives were decked out in suits.
Explained Michael Colsher, vice president of engineering, "It's
become more serious. People aren't throwing money at you."
(top
of page)
|
 |
| |
The
Bloomies is off the Rose
By Geri Spieler, GartnerG2
Effective 1 February 2002, Federated
Departments Stores, Inc. will turn bloomingdales.com into a marketing
site and focus its online resources on macys.com. The only direct sales for bloomingdales.com will be through
its partnership with WeddingChannel.com and electronic order forms
for purchasing from the Bloomingdale's By Mail catalog.
GartnerG2 analysis
The costly challenge of selling online has caught up with a major
department store chain and is forcing the evolution of a new strategy.
High-end department stores are beginning to pull the plug on costly
Web channels that require extensive technology and staff support,
but do not necessarily deliver revenue in return. Retailers were dragged
onto the Internet during the Web frenzy, and many mistakenly tried
to emulate their catalog business online. Marketing products via catalogs
and selling to a virtual, border-less geography proved to have nothing
in common. Three years and a deflated economy later, the reality of
merchandising and managing a Web channel has caught up with the big
chain retailers, who are finally deciding which Web strategies to
pursue. Big chain retailers will look more critically at the costs-versus-return
on investment that their Web channels offer, and will start cutting
back on Web offerings. Not all will take drastic measures like Federated
did with bloomingdales.com, but we will begin to see a large shift
in terms of consolidation and movement towards more service-oriented
retail Web sites, than sites designed strictly for merchandising and
sales.
GartnerG2 recommends
Retailers: Be cautious about making "knee-jerk" reactions
to what will be a temporary economic condition. Merchandise the Web
store for popular priced items. Make the Web channel the primary customer
service, communication and campaign vehicle, linked to both the store
and catalog sales.
For more details visit www.gartnerg2.com.
(top of page)
|
|
| |
The
Three Faces of E-commerce
By David Schehr, GartnerG2
Viewpoint
All platforms are not created equal for e-commerce, but each
has its use in the increasingly interconnected telecommunications
environment.
The hype around emerging mobile and interactive TV platforms overstates
the near-term importance in e-commerce. Because of differences in
capabilities and functionality, consumers will favor different platforms
for different roles and at different times. Retailers and the technology
vendors supporting them must make strategic investment and development
decisions that take full advantage of the range of existing opportunities.
Most companies cannot afford to try every new e-commerce idea, so
they must choose wisely to get the greatest payoff from their investments.
Dynamics
E-commerce represented about 1% of total U.S. retail sales in 2000,
and will grow to more than 5% ($168.6 billion) by 2005. Unlike in
Europe, the PC is the dominant e-commerce transaction platform in
the United States, in both users and dollars.
-
To date, virtually all of U.S. e-commerce has been conducted via
the PC.
- Other platforms
constitute a drop in the bucket: Mobile and Interactive TV account
for only 0.1% of U.S. e-commerce volumes in 2000 (see Figure 1).
Figure 1:
U.S. interactive platform penetration, 2000
Base:
U.S. adults (205 million)
Source: GartnerG2, August 2001
Web
services can drive growth
- U.S. consumers
are beginning to try other platforms to buy on the Web. More extensive
use of these alternative platforms is already happening in Europe
(see Figure 2), and GartnerG2 expects significant growth in the
United States over the next five years.
Figure
2: Interactive platform comparative penetration, 2000
Source:
GartnerG2, August 2001
The United States
has been slower than Europe to adopt non-PC technologies for technical
and infrastructure reasons, but this will gradually change.
Growth in the use of alternative platforms is restricted by the
following three drivers:
- First is
the widespread entrenchment of the PC and PC-based Internet access
within American households. This resulted primarily from familiarity
in the workplace, which spilled over into the American home.
- Second, most
Americans accessing the Internet from home enjoy "flat rate"
access. In general, it costs most consumers the same whether they
access the Internet for one hour or 100 hours in a month.
- Third, interactive
TV and mobile Internet access each face technical and infrastructure
impediments that will slow distribution and use in the United
States.
E-commerce
platform growth will hinge on four factors
Infrastructure hurdles will be overcome in the next two to three
years—at least in major metropolitan markets. All three platforms
will then compete on the following criteria:
- Information
throughput. Information throughput is a combination of bandwidth
and data capacity. Mobile channels typically have thinner "pipes"
than interactive TV or PC channels. If application and user-interface
designers try to replicate an interactive TV- or PC-like experience,
mobile Internet access will be a disappointment to consumers.
Interactive TV, on the other hand, uses a medium designed to carry
full motion images with surround sound—a "fat pipe"
in terms of data downloads and uploads.
- Ease of
use. There are no "dummies" books for TV remote
controls or telephones because both platforms use simple input
devices that virtually every consumer has used regularly from
childhood. Moreover, the two technologies are robust, with few
operational glitches. PCs, on the other hand, are still somewhat
quirky and mysterious for most consumers. Even after 20 years
of development, PCs seem prone to "crashing" for no
apparent reason.
- Flexibility.
The PC's keyboard and mouse are a much more robust input system
than the alternative platforms, so consumers can enter information
(such as filling out an order form) quickly and easily. It also
allows rapid entry of characters, point-and-click functionality
and easy retrieval of preferred sites and vendors through lists
of favorites and bookmarks. Flexibility is further defined by
the range of commerce sites that a device can access. For interactive
TV, this is a major constraint. As envisioned, the system operator
initiates the choice of interactions and the consumer will generally
only be able to interact with what is being presented, rather
than deciding what information to view in the first place.
- Access
availability. Here, mobile wins. By definition, its size,
weight and portability enhance anytime/anywhere access. Interactive
TV has a slight edge over the PC, simply because there are more
TV sets in a given home than there are PCs.
In summary, no one platform dominates all categories of feature/functionality.
Each has particular strengths and weaknesses (see Table 1), making
each the most appropriate device in specific situations.
Table 1: Platform
functionality comparison
Source:
GartnerG2, August 2001
Understanding
how these various criteria translate to different sales opportunities
will enable retailers and system operators to plan strategic investments
to get the greatest long-term return on their efforts.
Figure
3: Projected U.S. interactive platform penetration, 2005
Source:
GartnerG2, August 2001
Predictions
- By 2005,
42% of U.S. consumers will use multiple platforms—PC, mobile
and interactive TV—on a regular basis.
- PCs will
remain the dominant platform; interactive TV and mobile gains
will come primarily from location- or situation-specific buying.
- Mobile
devices will be used primarily for purchasing access (public transportation,
entertainment tickets, etc.) and time-sensitive or alert-driven
purchases or location-specific purchases.
- Interactive
TV will be most often used in a responsive mode, in reaction to
an advertisement or other stimulus during normal television viewing.
- U.S. consumers
will be willing to use any or all platforms, individually or in
combination, as occasion and opportunity allow.
Recommendations
- Stress
PCs for active shopping, phones for location-based and interactive
TV for impulse buys.
- Help consumers
use the channels synergistically—help them set up shopping
lists on the PC then order via mobile.
- Multinational
vendors and retailers: Use Europe as a proving ground for mobile
and interactive TV initiatives.
Then figure how to translate the offerings for the U.S. environment.
Europe is more mobile- and interactive TV-oriented, and less PC-focused,
so it provides better near-term testing opportunities for these
systems. But be careful in looking to import these offerings to
the United States. What works in one market doesn't always work
in another.
For
more details visit www.gartnerg2.com
(top
of page)
|
|
| |
IBM:
The Undisputed Leader In Corporate Notebook Sales?
By Matt Sargent, Notebooks Analyst, ARS Research
As
the PC market continues its dismal tailspin, PC manufacturers are
desperately refocusing on the few areas of growth that still remain.
One area that has continued to expand is the notebook market. Notebook
sales are blessed not only with stronger demand than their desktop
brethren, but also by the fact that they carry higher margins allowing
PC manufacturers to venture into the long-forgotten realm of selling
PCs at a profit. Central to notebook sales is the corporate market,
which accounts for approximately 70% or more of overall US notebook
sales. And central to the corporate notebook market is the two-spindle
notebook. The traditional leader in this two-spindle, corporate-focused
market place has been IBM, but the renewed focus on the corporate
notebook market has brought increased attention from Dell and Compaq,
which have revamped their respective two-spindle product lineups to
challenge the market leader.
The IBM ThinkPad T-series is clearly still the "mindshare"
leader within the two-spindle corporate space. There are some indications
that Dell's Latitude C610/C600-Series has surpassed the ThinkPad in
terms of unit sales, but the ThinkPad still remains as the clear leader
in terms of overall brand image among corporate buyers. This leadership
position however will likely experience increased levels of challenges
from Dell and Compaq. Dell is obviously leading with price with the
Latitude C610-series, but has added two significant features that
were lacking in the Latitude C600 series that make the C610 a much
more formidable competitor outside of its low price. First, users
can now simultaneously configure the Latitude C610 with an integrated
wireless LAN, modem, and 10/100 LAN connection. The previous Latitude
C600 series forced users to choose either an integrated 10/100 LAN
connection or an integrated wireless LAN, but not both. If an integrated
10/100 LAN connection was chosen, a wireless LAN could be added to
the C600, but only through the PC Card. Second, Dell has standardized
on the new Intel Pentium III-"M" processor, a move made
earlier by IBM. The Pentium III-"M" has become the price
for entry into the two-spindle corporate market. The power-savings
provided by the new 0.13 Micron Tualatin process (which is the clearest
differentiator between the Pentium III and the Pentium III-"M"
processor) are clearly significant and highly desired by mobile workplace
users. While these improvements are well received, they are not especially
significant leaps for the industry and actually represent similar
moves made earlier by IBM and others.
Thus, Dell uses price as a clear differentiator. This difference can
be seen when comparing popular configurations. The IBM ThinkPad T23-26474MU
currently sells for $2,754 from IBM.com. A somewhat similarly configured
Dell Latitude C610 sells for $2,256. The ThinkPad does have a faster
processor (1.2GHz P3-"M" versus 1.0GHz P3-"M")
and a larger hard drive (30GB versus 20GB), but these two advantages
are valued at $359 according to the latest ARS Feature Neutralization
Pricing Report, well short of the $498 price difference. Given other
minor specification differences, ARS estimates that this ThinkPad
is overpriced by $155 when compared with the Latitude C610 configuration.
Dell salesmen will definitely highlight this price/performance advantage
while IBM will need to focus on its long-term stability, security
options, and other features that a company of its size can offer.
Unfortunately for IBM, in this time of tightening corporate budgets,
users have become much more cognizant of sales pitches that can illustrate
a straightforward pricing advantage.
Compaq has also revamped its two-spindle notebook line with the introduction
of the Evo N600c. The Evo N600c replaces the Armada M700. Enhancements
include the Pentium III-"M" processor and expansion capability
through Compaq's MultiPort. MultiPort allows users to add wireless
devices after the initial purchase. MultiPort is different from a
standard PC card slot in that MultiPort is integrated within the corner
of the display lid giving any wireless add-on a more built-in feel.
MultiPort wireless LAN cards do not have protruding antennae or any
other extraneous components that would take away from the smooth look
and feel of the base notebook. This ability to add wireless functionality
after the initial purchase is an advantage the Compaq Evo N600c has
over both Dell and IBM. To add integrated wireless functionality to
either the IBM ThinkPad T23 or to the Dell Latitude C610, a user must
request it be built in at the time of the purchase.
In addition to the MultiPort advantage, Compaq has also taken a page
from Dell's book and has made the Evo N600c very competitive in terms
of price/performance. The Evo N600C- 470019-411 is priced at $2,349.
This is $405 less than the IBM ThinkPad used in the Dell comparison
above. Similar to the comparison with the Dell Latitude, the IBM has
a faster processor (1.2GHz P3-"M" versus 1.06GHz P3-"M")
and a larger hard drive (30GB versus 20GB), but these two advantages
are valued at $259 according to the latest ARS Feature Neutralization
Pricing Report, well short of the $405 price difference.
Given that both Dell and Compaq are producing equivalent systems at
a more attractive price point, ARS expects that IBM may need to sacrifice
margin in order to maintain its leadership position. Whoever can remain
on top in the two-spindle notebook space will likely control the entire
notebook market, and given that the notebook segment is currently
the most profitable area of the PC market, ARS suspects this battle
to be pivotal in the overall struggle for PC supremacy.
For more information visit www.ars1.com
(top
of page)
|
| Advertisement:
For End of Lifers? Need to move your “B-goods,” refurb’s
or excess inventory without damaging your new products sales or angering
your channel partners then contact LNJ Inc. We specialize in peripherals,
monitors, printers, CPUs, storage and media products. With decades
of technology related multi-channel experience and relationships,
LNJ Inc. understands your need for a quick and efficient solution
and can quickly assess, value and act on your inventory challenges.
Contact us at (541) 484 1907 or lawrencegrella@hotmail.com |
|
| |
Hug
a Customer
By
Steve Cross
Last month I talked about getting closer
to customers. The closer we get, the better we know their changing
needs and priorities. With advance knowledge of these changes, we
can beat the competition to meeting customer priorities. By doing
that, we can find profits before the competition does.
Let’s look at a few simple tools for getting closer. Here’s
an easy one; walk over to where the calls come in (if you outsource
front line sales, have them transfer some calls to your personal queue),
and take some customer calls. Find out what customers are asking about,
what they’re concerned about. Or just ask your customers how
they use your products. Make sure you write down the answers.
Here’s a good one; find the department at your company that spends
the most time talking to customers. Maybe that’s customer service,
or tech support. Ask the boss of that department to poll his/her staff
about the top 5 customer requests. The results may surprise you. Maybe
you have a problem that nobody told you about, or customers are doing
something new, and unpredicted, with your product. Or maybe you have
a vibrant and growing specialty channel you didn’t know about.
We did that one at Connectix and found out that graphics professionals
were using RAM Doubler (a software product) in a way we hadn’t
expected. Using this new information, we changed the copy in our ads,
in our catalog insertions, and in our trade show pitch. The result
was a totally compelling story for the graphics professional market,
producing terrific penetration and tons of incremental revenue.
Add a survey to your Web site. It’s cheap, fun, and interactive.
Ask people to rate your download area or your e-commerce function
on a 1-to-10 scale. Solicit comments, too. Enter customers in a contest
when they take a few minutes to fill in a more detailed online survey;
that way you get more info and the customer starts to develop a relationship
with your company. Outfits like InstantSurvey, and FreeOnlineSurvey
(a misnomer) use an ASP model that hosts the survey and works with
a link on your Web site. SurveySite puts a pop-up on your Web site.
Of course, the more questions you ask, the more you pay. How pricey
are these services? Quicktake will do 100 responders (statistically
significant) for $1500.
How about a survey to your email database? Test out some concepts.
See what the customer is thinking. Find out if the current multi-channel
approach is adequate. Maybe your company needs to add another channel.
Or that your customer base will respond well to emailed offers of
third-party products. Until you ask the customers, and analyze the
answers you won’t know. Use a simple approach at first. Later,
you can look for more information. All you have to do is start. Hey,
it’s a New Year! So do something new.
Steve Cross is a leading consultant specializing in building value
for high tech companies. He is best known as former Vice President
of Sales at Connectix during their turnaround from under $1 million
to over $70 million in annual revenue from 1993-1997. His clients
have included Pinnacle Systems, Visioneer, Dazzle, Network ICE, Margi,
Aladdin, Outpost.com, and many others.
Contact: steve@crosschannel.com
(top
of page)
|
|
| |
Tech
Rocks
By Alan Schiff
Over the past five years, technology
sponsors have begun to use rock concerts as a marketing tool. They
see an associative value that you might call a coolness factor, which
is great for tech sponsors wanting to showcase their products to a
specific age group.
One of the most frequent, tech sponsors is Sony Playstation. Playstation
was one of the first to sponsor rock tours and remains a major player.
Games are set up for kids to play and contests are run before and
during each event to provide Playstation winners with a chance to
share a meal or party with a featured band.
In 1997 and ’98, Yahoo! was the official Internet sponsor of
the H.O.R.D.E. Festival and then joined the Van's Warped Tour in 1999.
After much success, they produced their own tour, Yahoo! Outloud,
featuring Smashmouth in 2000 and Weezer in 2001. They leveraged these
tours to showcase their own services (Yahoo Sports, Music, Shopping,
Photos, etc.) and partner with other technology and consumer brands
like Doritos, Pepsi One, Liquid Audio, Hewlett-Packard and others.
At the Hewlett-Packard exhibit, kids could have their picture taken
with featured bands, which were actually life-size photos. An HP camera
took the shot, which was printed with an HP printer. This proved to
be the most successful sponsor exhibit on the tour. Tech sponsors
can go beyond branding association--posting their logo at the event--to
provide entertaining exhibits involving partners and promotions on
many levels. They can involve strategic, complimentary or contributing
partners. Game console vendors can invite publishers to participate.
Internet search companies can include their content partners and retailers
who sell the products. Using your partners of course also lowers your
costs. Some may wonder if this is just another marketing “fad.”
I don't think so. The opportunities provide access to a specific demographic
group and allow the sponsor to create long-lasting meaningful impressions.
Rock and roll sponsorship is a great way to reach specific consumer
groups cost effectively.
Alan Schiff has been marketing microcomputer products for well
over ten years, providing clients with assistance in merchandising
and promotion, tour and sports sponsorship and marketing data analysis.
His clients include AT&T, IBM, Hewlett-Packard, Logitech, Key
Tronic, Yahoo!, Launch Media and others.
Contact Alan at alanschiff@yahoo.com.
(top
of page)
|
|
| |
Brand
and Positioning
By Robert Gelphman
Brand seems to be all the rage these
days with declining sales and profit margins. However, the influx
of new and available products, some actually very interesting and
useful, has not abated. To jump start sales, many people are asking
me about branding. But their question should be positioning. Often
what goes wrong with marketing campaigns is the underlying strategy.
Too many VPs of marketing and their product managers choose a branding
campaign when they cannot even articulate a position. The pursuit
of brand is expensive, time consuming and is designed to elicit an
emotional reaction from the audience. It generally works best for
commodity-type products where there is little distinction among the
competition. Positioning is based on a demonstration of real value,
can be done in a much shorter time frame (months rather than years),
and consequently is significantly less expensive. Most importantly,
for many industries and companies, positioning is the best strategy
for improving sales and market share, not branding.
The real problem, however, is that many people do not know the difference
between the two. Instead of pursuing brand, or ubiquity (everyone
knows you), it is often more appropriate to establish positioning,
or value (everyone wants you). When market share is the objective,
the fastest and least expensive marketing strategy is positioning.
The building of a brand not only takes more time and money than originally
budgeted, but can be difficult to measure, as brand does not always
show up in the form of sales. Many of the dot-coms fell into this
trap. Basically, they failed to communicate a value proposition. People
knew who they were but did not know why they needed them. They thought
the road to market share was paved by brand creation. They succeeded
in generating Web hits but not sales. Positioning creates demand for
a product. Brand works best when leveraging this already established
need or demand for continued sales. Positioning helps create brand
but brand does not always or necessarily contribute to position. Some
companies have achieved brand in a short time but are still suffering
from an unclear positioning. This is a situation that currently affects
Yahoo! It could be argued that Yahoo! has brand but no position. Is
Yahoo! a search engine? A portal? An online auction site ? A content
aggregator? Online store? All of the above? What is the value proposition
to its customers? What is the company’s position vis a vis its
competitors? In every one of these categories, Yahoo! has formidable
competition. What is least understood about building brand is the
amount of time required. Amazon did it in a relatively short time
but anyone can articulate its reason for existence--online storefront.
Hence, the call to action is visit the site for eventual purchase
of a particular product. People go there expecting to spend money
and this in turn creates market share. So before creating brand, establish
a position. Define positioning as that desirable place in the customer’s
mind where he not only recognizes the product but can also recite
the attributes of the product or service being offered. Effective
positioning makes the customer a part of the sales team while reinforcing
your positioning efforts. Positioning is dynamic and fluid. Yesterday’s
unique position is today’s commodity provider. Useful positioning
statements should describe who the company is AND who it wants to
be. Inherent in any successful positioning exercise is the continuous
assessment and analysis of targeted customers. For many high technology
companies, the customer is an engineer, a network administrator or
at least someone proficient in computers and technology. Brand is
irrelevant and value, articulated through positioning, rules. These
folks require information on how to use your product and why it best
serves their purposes. This is best achieved through positioning,
not branding.
Many companies think that leadership is the same as positioning. But
leadership and value do not always equate. If a start up, you cannot
be new and a leader at the same time. Claiming leadership too early
in the game removes you from leveraging a key competitive advantage.
Being new to the market space allows you to attack the leader and
forces them to acknowledge you as a player, which gives you instant
credibility. In high technology, there are only a few leaders--Sun
Microsystems in workstations, Oracle in database software, Microsoft
in desktop software, and Intel in microprocessors to name some of
the most prominent. Revenues and market share support their claims
to leadership. Their customers are calling them leaders. While they
probably do have brand in their respective markets, their position
is well understood. Today, the key to a successful marketing campaign
is to demonstrate value. Our argument is that this is best done through
positioning. Focusing on positioning rather than brand will get you
to your objectives much faster. Brand is nice but positioning is better.
Gelphman Associates is an integrated marketing communications agency
serving companies in high technology. We offer public relations, advertising,
web design, collateral development and tradeshow management for development
of a single, efficient and effective message platform. robert@gelphman.com.
(top
of page)
|
TDN is a full-service, turn-key organization dedicated to establishing
new or existing computer software companies into the retail and
mass distribution marketplace. The Distribution Network (TDN) was
founded in 1988, and became the first national manufacturer's rep
company handling sales for software publishers and hardware manufacturers
in the United States and Canada. We would love to be of service
to you - call us now at 1-888-744-6949!
|
|
