Samsung Galaxy Note. First Look
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Spillikins ¹138. Angry Birds and Some Coffee Can Cause Quite a Stir
I spend another week trying to sort the summer news out as there has not been a lot fascinating news recently. The most interesting piece of news is that iPhone 5 will be released October 4. The rest of the news are merely development of the old stories we all know and are rather bored of. But for Angry Birds and their step into the real world we would have very little to talk about. The second part of the Spillikins is traditionally dedicated to the destruction of Nokia with new details. The company won’t survive if it continues likewise – it needs a wizard but no one is coming. I leave the new HP CEO for the dessert.
Every generation has icons and Angry Birds can surely become a symbol of this decade. I have traveled many countries and I have seen people in Angry Birds T-shirts and tons of different memorabilia of the game characters in gift stores, the game sounds come from every corner. This Rovio Entertainment phenomenon has been downloaded over 350 million times making it one of the most popular games of the recent years unmatched by audience coverage. Hollywood even plans to make this game into a movie about birds vs. other animals conflict.
I lost interest for it it after the RIO add-on because I hated getting only three stars for a level though the game barely changed as compared to the original or the Seasons add-on – the game is still simple, it’s got the same rules, the graphics has changed a bit. I still download this game just in case to my phones and tablets and sometimes I spend a few minutes playing it. My kids have also lost most of their interest for this game. By the way, the distribution model of this game is very interesting as compared to cell phones distribution – they are very similar and people get obsessed about different stuff similarly.
At the first stage the game got popular among game enthusiasts who played it as if they were possessed. This made a bit bigger audience interested (the pioneers). Then the game popularity reached the critical mass and crossed over different platforms (to continue my analogy with cell phones - countries). And this is where people who never follow tends, the most massive audience, heard about an interesting game from their friends. It is hard to reach this audience as well as attract it. At this point game enthusiasts don’t play the game anymore – it is too old and mainstream for them. The game also loses most of the “pioneers” audience for the same reasons. But the mass market covers those losses in popularity exceedingly. Moreover, as the audience of the game grows there become more and more possibilities of franchise income. Rovio launched memorabilia sales that further pushed the game into becoming a social phenomenon.
The Angry Birds developers and Starbucks have agreed to put score tables in Starbucks coffee shops so if you live in the US you will be able to compete with other clients in Angry Birds while having your morning coffee and may be if you score in the top it will get you a free coffee the next day. It will be a non-stop open tournament and you will only need to get into a Starbucks. I suppose there will be extra levels available to download only in Starbucks coffee shops – may be they will put download codes on your bill to ensure more cups are sold. This enterprise will be very profitable for Starbucks as well as for Rovio who will raise public interest for Angry Birds and make it into a cult. The tournament system will surely increase the popularity time of Angry Birds. There have not been a lot of cult casual games – I can name the Tetris by Pajitnov, a bit later there were the Lines and a few other simple games. Now Angry Birds joins the cult club overwhelming the popularity of the oldies.
I think Rovio managed to find a good balance between reality and a video game. They added some real world elements like coffee and real rivals to the Angry Birds universe making emotional bonds to the game stronger – that is a rather unique solution. How to make a person start his day with playing your game? You cannot usually control a person’s mood – he plays whenever he wants to. The specificity of casual games is that people play them when they have a spare minute. But if you give him a good cup of coffee he will have a stronger emotional bond (the taste and the aroma imprint into the mind and create more positive emotions like a book would if read in comfortable environment). This Rovio experience is unique and I think other companies might follow their way if they have enough imagination. But the first company to successfully combine a video game and reality is Rovio.
Funny but many people with whom I have discussed Rovio-Starbucks partnership see this as a small marketing trick that won’t last long and generally were not interested to hear about it. The future crawls in unnoticed for most people and only afterwards that all becomes clear and simple.
Rovio have already introduced Angry Birds to Barnes&Nobles and the customers now spend 30 minutes more in these book stores. The profit of the book retailer is apparent though won’t big as big as the profit of Starbucks. You can find Angry Birds for practically any platform and not so long ago Rovio launched a version for Google+. The G+ version can tell us the effect of the social factor on popularity. Now you can see how much people you are subscribed to score in the game and you are driven to score even more and you may find yourself absorbed by the game. This is the world order – the social component is everything.
Nokia’s new CEO made Nokia’s future depend on the future of Windows Phone 7. While other companies try not to put all the eggs in one basket and go for several operating systems Nokia is ditching their own OSs (Symbian, Meego) refusing to have a retreat plan. Victory or Death. So far everything tells us that Nokia is nearing the end of itself. Most Nokia employees do not believe in success of WP7 and many even sabotage their development – it’s hard to see a bright future for Nokia in these circumstances. Naturally, the company press releases never mention the sentiment inside the company but the point of no return was passed by Nokia and the management has lost all credibility among the staff. The destruction of Nokia is becoming inevitable because the employees see no future despite the management’s pompous tirades about a bright one.
We can see only outcries of the management failure issues. A couple of Spillikins issues ago I wrote about the postponement of Nokia N9 and the big ad campaign launched in September.
Over the past weeks several reviewers wrote that Stephen Elop as Nokia’s CEO could not have affected the release date of Nokia N9, moreover, this phone is in his own interest as it will be the foundation of the company’s first WP7 phone. It is just that during the development there were a few unforeseen difficulties that have postponed the release. I cannot say to what extend such speculations are true but it does not sound very reasonable since Nokia has not yet ordered production of their first WP7. I have also written about why they chose Compal.
The history gets interesting when it comes to numbers. At first I learnt that Nokia was going to produce 125000 WP7 handsets. Then several independent sources reported 2 million units to be produced in Q4 starting from September. No production has started so far which leads us to the conclusion that the production rate must be lower as Compal would not be able to deliver that many units. In a numer of interviews Stephen Elop stated that the first WP7 phone would be released in Q4 but not on all the company’s markets. The information I get from the production lines tells me that Nokia’s production order will not exceed a few hundred thousand units. Numbers can be so amusing.
I remind you that the total production rate of Nokia N9 will amount to 92 thousand handsets without the prototypes. This model was released only to fill in the vacuum and kill Meego slowly. We observe the same story with WP7 – the management needs big numbers for the promises they have been making since February 11 2011. We know their means to get those numbers and I think they are going to do the same thing they did with Nokia N8 when it was released in five world capitals on the ;last day of the quarter only to disappear from sale for two weeks. De facto Nokia kept their promise by delivering a few units on time. I expect this story to repeat in Q4 2011 with WP7 phones – just a handful of handsets in a small number of countries.
In terms of PR the company also knows what to do. For example, not so long ago Nokia pompously reported that the number of preorders for Nokia N9 in the company’s biggest store in Finland exceeded all expectations and quickly reached the limit. Nokia now prefers contemplating on future sales than having real ones and they have become exceedingly good at it.
Last week Nokia did another mad thing – the company fired a Microsoft employee who twitted a comment on the future phone. His tweets did not contain any factual info on the phone except for that it actually exists. After Stephen Elop’s leak about Sea Ray everyone knows about this phone except may be for those don’t care about phones at all. And I cannot possibly understand what caused such hysteria in Nokia to fire this Microsoft employee, Joe Marini, and I repeat, he did not divulge any factual information that could harm Nokia’s interests. I suppose it’s just another case of the witch-hunt inside the company.
My general impression of today’s Nokia is a sinking ship being abandoned massively. Inside the company only Stephen Elop and may be a few other guys actually believe that Nokia will soldier on while new products are being denounced by most of the staff. The employees are becoming more apathetic since they see no future for the company. It’s all very sad really…
In the patent war between Apple and Google the first is winning so far at least if you take into account bans on certain Samsung products. At the same time Apple refrains from buying components from Samsung and switches to other suppliers. The conflict is becoming serious indeed. Samsung will not be hard hit by losing Apple as a purchaser of its components as it is moving to another level with new generations of screens, memory, etc. In the short term Samsung will edge forward and Apple will have to return or lose out to Samsung models. This unusual situation will be resolved in the battle of nerves and patience.
Apple was the first to attack, but Samsung is planning to retaliate. South Korean papers claim that according to Samsung top managers the company plans to ban sales of iPhone5 in South Korea. As soon as the model hits the shelves Samsung will go to the court. It is not a futile threat, because Samsung is the main holder of telecommunications patents in the country. Samsung can achieve success with such bans. For example, the sales of Samsung Galaxy S2 in Korea reached 4 million items, which is quite impressive.
Samsung will be aggressive on other markets as well. Due to loopholes in the German legislation temporary bans can affect Apple products too. The patent war will be a goldmine for lawyers and we will have many things to discuss.
According to Wall Street Journal in 2012 Samsung is planning to open codes for Bada. Theoretically it can attract independent developers and push the platform forward. It is not going to happen though. Some people believe that Samsung will ignore Android at the expense of Bada. It is absolutely not true, because no company will upset its own apple cart. Android for Samsung is the key element of strategy.
The main issue with Bada is that the platform is slow to develop. Moreover, Samsung clearly understands its limitations in lacking a strong team of developers and tries to bridge the gap as quickly as they can. They hire new programmers and pour investment into the area. Opening of the Bada code is another element of the strategy. The problem is not only in the lack of apps for Bada, but the entire segment needs improvement. In the past Samsung always fixed their issues within 4 years, but the result was always successful.
After the former CEO of HP decided to get rid of WebOS and leave the PC market even the outsiders understood that the management of the company ran into trouble. Investors wanted to switch the priorities, but Leo Apotheker did not react to their feedback. As a result the CEO had to resign. During the last 10 years HP suffered from an ongoing battle between the CEO and the Board. In this corporate sporting activity the computer giant struggles to understand what it wants and which strategy is the best in the case. Leo Apotheker introduced numerous changes, which were approved by the Board. His departure will not change much. For example, WebOS will have to future in sight. The company has not made firm decisions about its computer department. I think the Board sacrificed its CEO to please the investors. When rumors about the resignation emerged HP shares went up.
Interestingly, Apotheker is the third CEO in a row to be sacked by HP. He spent 11 months in his position, while the destruction of the company went ahead. From November of 2010 the market capitalization of HP decreased by 45%. It is one of the key performance indicators describing the negative market reaction to the strategy of Leo Apotheker and skepticism about HP fortunes. In fact you can have a contest between CEO of HP and Stephen Elop from Nokia to decide who can destroy the company faster. So far Elop is out in front.
HP appointed Meg Whitman as their new CEO. Prior to HP she led eBay and oversaw the purchase of Skype and was heavily criticized for that. Interestingly, both Whitman and Apotheker, who came from SAP, never had any manufacturing experience. They do not have enough insight and have no time to learn. When the ship goes down it has to be saved at all costs and it is not the opportunity to learn how to work. The choice of a CEO who has no manufacturing experience is an ideological mistake for HP. The Board is afraid of rocking the boat, so it was mentioned that the strategy remains the same despite the appointment of Whitman. Following a strategy shows consistency, but if the strategy in question is a losing one? We did not get any answer, because HP tries to create an impression of a stable company.
We live in unusual times when the old world of IT corporations is changing fast and all blunders of CEOs are clearly seen as if through the magnifying glass of online publicity. The transparency of companies is unrivalled now and was impossible a decade ago. More and more often we see that at the helm of huge corporations can be found different people, some are smart, while others are not, some are selfish, but the rare few are dedicated. Now we can distinguish between them easier.
P.S. Have a nice week and take your time to relax!
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Published 02 October 2011
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