In a major innovation in design and engineering, Motorola has created a phone of firsts. Read a 2004 press release that announced the launch of the mobile phone manufacturer’s entry to the ultra competitive mobile phone market. The combination of metals, such as aircraft grade aluminium, with new advances, such as an internal antenna and a chemically etched key pad, led to the formation of a device that measured 13.9 mm thin.
And it worked. Millions rushed to get one. Celebrities flashed their RAZRs on the red carpet. Having sold 50 million units, few could argue that RAZR wasn’t a huge success. By surpassing current mobile expectations, RAZR represents Motorola’s history of delivering evolutionary innovations said former Motorola CEO Ed Zander of his new wonder product, while setting a new bar for future products coming out of the wireless industry. This one product was huge financial success for Motorola. This was truly an innovation of monumental proportions. Or was it?
Less than four years later, Zander was forced out. The stock traded at 50% of its average value since the launch of RAZR, and Motorola’s competitors had easily surpassed the RAZRs features, functionalities with equally innovative new phones. Motorola was once again rendered just another mobile phone manufacturer fighting for its piece of pie.
Like so many before it, the company confused innovation with novelty.
Real innovation changes the course of industries or even society. The light bulb, microwave oven, fax machine. I Tunes. These are truly innovative that changed how we conduct business, altered how will live our lives and in the case of ITunes, it challenged an industry to completely revolutionise its business model. Adding a camera to mobile phone, for example, is not an innovation- a great feature, for sure, but not industry- altering. With this revised definition in mind, Motorola’s own description of its new products becomes just a list of few great features: a metal case, hidden antenna, flat key pad and a thin phone.
Hardly revolutionary innovation – Motorola had successfully designed the latest shiny object for people to get excited about, at least until a new shiny object came out. And that’s the reason these features are more a novelty than innovation. They are added in an attempt to differentiate not reinvent. It’s not a bad thing, but it can’t be counted on to add any long-term value. Novelty can drive sales – RAZR – did it – proved it, but the impact did not last long.
If a company adds too many novel ideas, too often, it can have a similar impact on the product or category as the price game. In an attempt to differentiate – with more features, these products start to look and feel more like commodities.
And, like price the need to add yet another product to the line to compensate for the commoditization, ends in a down ward spiral.
In the 1970s, there were only two types of Colgate toothpaste. But as the competition increased, Colgate sales started to slip. So the company introduced a new product that included a new feature – fluoride. Then another. Then another. Whitening. Tartar control. Sparkles. Stripes. Each innovation certainly helped to boost sales for a while at least. And so the cycle continued.
Guess how many different types of tooth paste Colgate has for you to choose from today – 32 types of Colgate toothpaste excluding the four they make for the kids. And, given how each company responds to the innovations of the other that means that Colgate’s competitors also sell a similar number of variants that offer the same quality, about the same benefits, at about the same price.
There are literally dozens and dozens of toothpastes to choose from, yet there is no data to show that Indians are brushing their teeth more now than they were in 1970’s. Thanks to all this innovation, it has become almost impossible to know which toothpaste is right for you. So much so that now Colgate offers a link to their website called – Need help, deciding. If Colgate needs to help you pick one of their products because they are too many variations, how are we supposed to decide when we go to the super market without Website to help us?
Once again, this is an example go the newest set of shiny objects designed to encourage a trail or a purchase. What companies cleverly disguise as innovation, is in fact novelty. And isn’t only packaged goods that rely on novelty to lure customers, it’s a common practice in other industries too. It works, but rarely if ever does the strategy cement any loyal relationships.
Apple phone has since replaced Motorola RAZR as the popular must have new mobile phone. Removing all the buttons and putting a touch screen is not what makes the phone innovative, however. These are brilliant new features. But others can copy those things and its wouldn’t redefine the category. There is something else that Apple did that is vastly more significant.
Apple is not only leading how mobile phones are designed, but in typical Apple fashion, also how the industry functions. In the mobile phone industry, it’s the service provider, not the phone manufacturer that determines all the features, benefits the phone can offer. T- Mobile Verizon, Wireless, Sprint, AT&T, Vodafone, all dictated to Motorola. Nokia, Ericsson, LG and others what the phones will do.
Then Apple showed up. They announced that they would tell the service provider what the phone would do, and not the other way around. AT&T was the only one that agreed, thus earning the company’s exclusive deal to offer new technology.
That’s the kind of shift that will impact the industry for many years and will extend far beyond a few years of stock boost for the shiny new product.
Your call now, folks!