Pre-announcing Too Early Costly?

With the exception of Apple, most technology companies have continued to pre-announce product months, in some cases nearly a year, in advance. The only exception Apple seems to make is for operating systems: those get announced up to 6 months in advance of their actual release. But when it comes to hardware and core product, Apple generally takes pre-orders within days of the announcement, and starts shipping within a week or two. Sometimes they take pre-orders immediately after the announcement, and on some occasions, make the product available for purchase that same day. So why do others like Microsoft, Nokia and RIM announce products many months in advance?

Supply Chain Management Well Understood

For all of the plaudits showed on Apple for supply chain management, they aren’t the only company out there that can manage a supply chain well. In fact, Apple really isn’t breaking any new ground here. Their approach is based on decades of “just-in-time” concepts going back to Japanese manufacturing techniques pioneered in the late 1970’s and early 1980’s. Getting costs down, pushing for aggressive and continuous delivery of parts (rather than buying large single-lots and warehousing them) is a well-understood problem. Dell was doing it long before Apple, as was Gateway. HP has been (slowly) moving to this for their retail product.

So it isn’t that Microsoft, RIM and Nokia don’t understand manufacturing. All of them have been hardware manufacturers for a long time, going back multiple decades for Microsoft and Nokia. It isn’t that they couldn’t prime their pipeline to allow rapid shipment of product after announcement. For whatever reason, they seemed determined to not do it. It is as if they just don’t seem to see what effect this has on Apple and the success of their products.

Granted, near-immediate availability isn’t the primary reason for Apple’s success. But the fact that they go from announcement to “here it is”, providing near-instant gratification for customers is certainly a contributing factor. It also makes Apple look like heroes and geniuses, because “they can ship right way, why can’t other guys?”.

Are Some Companies Stuck In The Past?

Part of me wonders if Microsoft et. al. are stuck in the “announce early to forestall their competitors” mindset that worked so well in the 1980’s and 1990’s. It was a pretty effective tactic, although done improperly could kill your own product. Remember Osbourne? They had a pretty successful business, selling on of the first portal CP/M computers. They pre-announced the next model, and sales tanked: everyone wanted the new machine, so they stopped buying the old one.

But done correctly, big companies like IBM or Microsoft could forestall a competing product because most enterprises were more comfortable buying from one of the established players. Remember that up until the mid-1990’s, a lot of computing technology (PC’s, mobile phones) was largely the purview of the corporation and not the individual. Home PC ownership was comparatively rare (that changed largely because of Windows 95), and mobile phones were essentially a corporate tool until the cost of the plans started to drop. Smartphones started the same way, with the first devices (appearing in the late 1990’s) largely being corporate devices.

Internal Process vs. Instant Gratification

Enterprise buyers in the past weren’t as driven by “gotta have it now” as consumers. Corporations are a different animal. They are (usually) willing to wait, in part because it gives them time to figure out how to either incorporate something new into their world, or plan for an upgraded version (testing, roll-out, support). In the past, they were also more likely to wait to see what the “big boys” would do when something new came out. Would IBM, Microsoft, HP, etc. respond? Would  they have their own offering? By pre-announcing months (or even years) in advance, it created a steep barrier for a new entrant. They had to compete with vapourware, something they couldn’t attack directly (because it didn’t exist) but had to defend against.

Consumers aren’t that way, and a lot of technology (particularly mobile technology) is now driven by the consumer and not the enterprise. Sure, servers and PC’s/notebooks are still heavily influenced by enterprise trends. But mobile computing (smartphones and tablets) is far more driven by consumers than corporations. And consumers want it now. They don’t want to have to wait, and most won’t wait. There are exceptions and there are holdouts. But for the bulk of the purchasing public, when they see a new shiny toy, they want it now. Being able to get it “now” reinforces a positive impression of the company.

Shipping shortly or immediately after announcement also makes it harder for competitors. They don’t have any meaningful time to react with their own product. Yes, it gives them something tangible to go up against, allowing them to trump some features. But since consumers generally don’t buy tech specs, what it means for a consumer is “I can get this one now, or I can wait for something that might be better later”. Something I can buy today is far more compelling that a potential product with an uncertain ship date.

Lessons To Help Recovery?

I still feel that RIM and Nokia are likely irretrievably broken. For RIM, it won’t matter how sophisticated or advanced Blackberry 10 is. Without apps and content, it has little appeal or utility for mobile users today. The same can be said of Nokia and Windows Phone. WP8 could be the most amazing piece of technology available. But WP7 was pretty impressive, too, and people have stayed away from it in droves.

As always, there is always a slim chance for survival. Never say never. But that survival depends entirely on doing “better”, and part of that is to stop following a 1990’s-style “announce now and release in a few months or a year”. If you announce a product, the damn thing had better be ready for pre-order that day, by the end of that week at the latest. Better yet, announce it and ship it that same day. Surprise people.

A pre-announcement from RIM, Nokia, Microsoft, etc. is basically just a way to get something new on the front page of a blog or news site for a day. The announcement will be old news within a day or two, sometimes within hours. When you only have a brief period of time to catch the media’s, industry’s and consumer’s attention, make it count. People don’t care what you are going to do 3 months, 6 months or a year from now. They want to know what you can do for them (or sell them) today.

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