Technology company buyouts are usually triumphant moments of validation, but this week’s announcement that Blackberry is considering a $4.7 billion offer actually shows how far the company has fallen. It’s hard to recall the time when then-candidate Barack Obama’s avid Blackberry use was a sign of his hipness, and this week’s news heralds not the company’s bright future, but its imminent demise.
But it’s not just Blackberry. Like the maker of the ur-smartphone, several other big bearers of the innovation flag have announced “good” news this September that actually feels bad, and the world’s innovation enthusiasts and investors are feeling droopy. What’s weighing us down?
- Samsung’s sluggish smart watch. As we noted previously, Samsung’s highly-anticipated “Gear” smart watch came out expensive ($300) and weak (315 mAh battery), with at best 25 hours of battery life, less than a full day with normal use – maybe it keeps bankers’ hours. Geek blogs Mashable and Engadget found it “not as fast as we’d expected” and “noticeably sluggish”, and Forbes said the device “offers little upside” for the company stock. Others opined that the locked, expensive device was unworthy of a leading global devicemaker, when crowdfunded upstarts were already making open, cheaper devices like the Pebble and Omate TrueSmart.
- Apple’s boring iPhones. Rather than offering more value for less money, Apple simply degraded its flagship product, poorly. A cheap plastic case is meant to lower costs and appeal to emerging market consumers, but Wall Street thinks it’s still too expensive and hammered the stock 4%. The improvements Apple did offer – new colors and fingerprint-based security – were decorative touches that didn’t significantly improve function or user experience and even caused privacy fretting. Influential technology site CNET groaned that “we live in boring times,” and The Guardian asked if Apple has “given up on innovation”.
- Nokia’s final, fatal fail. After a protracted bout of declining market share (from 35% in 2003 to 14% today), revenue, and profit, the 150-year old company sold its mobile phone business to Microsoft (another company struggling to self-reinvent). Ironically, Nokia did invent the first smartphone (Nokia Communicator) but lost the market battle by stubbornly sticking to its lame Symbian OS as a defense against Microsoft’s equally lame Windows Mobile, distracting both companies from the threat of Apple’s iOS and Google-backed Android (which now have about 20% and 70% smartphone market share, respectively).
- Hewlett-Packard’s drop from the Dow. The original garage startup, 75-year-old legend HP sat at the pinnacle of hardware innovation as recently as 2010. But after four CEOs and losing some $68 billion in value since then, its stock has fallen so far that it was just dropped from the Dow Jones Industrial Average. The company was so busy selling PCs and printers that it failed to notice that no one was buying them – HP’s growing market share literally blinded it to the fact that competitors exiting, not consumers entering, was driving its success. Arguably, HP’s decline actually began when it sold off its innovation engine, Agilent. Without a culture and pipeline of R&D, a company that had survived massive shifts, like that from desktop calculators to desktop computers – both of which HP invented – has nothing to replace a declining line for the first time ever. Meanwhile, Agilent is doing so well it will soon be able to buy its old parent.
What do these failures have in common? Certainly not a lack of resources; each of the companies has been the top of its field immediately prior to its fall (Apple’s iPhone launch was a commercial recordbreaker, and Samsung’s profit is up too, even as mobile revenue shrinks). Not a lack of technology – each has been early to market with the next-generation technology. It’s a lack of foresight, desire, curiosity, courage, passion, mojo… Leading firms turn to failures when they focus too much on staying atop the current wave and stop worrying about winning the next one – making products that make a big difference makes all the difference. And. Everybody. Knows. This.
Ironically, pleasing the near-term focus of greedy, twitchy institutional investors is often the excuse claimed by CEOs who put quarterly profit ahead of planning for decade-long growth. But as the examples above show, investors scorn small, short-term thinking, too. To get their innovation groove back, these tech stalwarts need to put their sights back out to the horizon with insanely great, mind-blowing products like:
- Apple Robotics. Has a nice ring, doesn’t it? Even Steve Jobs had to reinvent himself more than once, and Apple doesn’t need a Google-esque moon shot to build R2-D2. It could just hire a dozen Arduino-loving Makers and Dragon Innovation, or buy Romotive or Double Robotics, both of which are already selling ‘droids’ with obsolete Apple products for brains so it can’t be that hard. Just don’t let them navigate with Apple Maps. And TV is yesteryear’s innovation – abandon your high-tech bricks and collaborate with Lego on Mindstorm robots, another legend in corporate reinvention.
- Samsung’s Seriously Smart Home. Dear Samsung, please save us from an Internet of Pointless Things like Olly (“the web-connected smelly robot”) – strike partnerships to give us an IOT ecosystem across and beyond the home that we can get excited about. Swap your struggling tablet strategy for a deal to build Amazon’s on-fire Kindles, and use them to replace your smartfridge’s screen. Then integrate it with Amazon’s strategy to disrupt the $500 billion (just in the U.S.!) grocery industry. Buy Ambient Devices (client registration required) to expand your home energy management offering beyond the inductive charger for our smartphones and smartwatches; make a jumbo version with Fulton Innovation (client registration required) to power up the Tesla in our garage and the buses rolling down the street (as they already do in Gumi, South Korea).
- Microsoft Morph. Motorola’s legendary StarTac was inspired by Star Trek’s tricorder, which had been everyone’s futuristic vision of personal communication for thirty years. The science fiction vision of future phones today is Morph, Nokia’s 2008 concept. So make it! Outlook is your iTunes, and the current brouhaha about cloud-based security is your chance to unseat snooping email competitors like Gmail, and win back the ticked-off Presidents in emerging markets like Brazil and China where Nokia’s strategy faltered so badly. Maybe with a secure connection, Brazil’s President Rousseff will re-friend Obama, who was an early adopter of mobile device security back in 2009.
- HP Magic Materials. Telecommunications satellite visionary and author Arthur C. Clarke famously said, “Any sufficiently advanced technology is indistinguishable from magic,” and HP could use a little of both. British authors and magic conjure up images of that other HP, the boy wizard Harry Potter – so why doesn’t the company use its graphene metamaterials research to make an invisibility cloak (client registration required)? Or HP’s printer division acquire the 3Doodler 3D printer, which is clearly a magic wand (client registration required), or Blueprinter (client registration required) or Shapeways (client registration required), which sound like magic spells? Or accelerate post-silicon substrates for nanoelectronics and quantum computing, by beating or buying D-Wave out from under Google and Amazon? If it fails to innovate, HP may need to learn the trick of Dumbledore’s phoenix, rising from its own ashes.
September should have been a banner month, not a bummer month (and there were a few glimmers of recklessly bold vision, like Google aiming to solve Death and rapper Kanye announcing his foray into architecture). If these giants were startups, they could have breakthrough strategies in place by September’s end. Given their girth, they can show customers and investors that they are serious about innovation by getting going now. “Seizing the Innovation Initiative” is the theme of the next Lux Executive Summit, so we look to see bold thinkers from Apple, Samsung, Nokia, and HP – or any company looking to avoid their mistakes – there if they haven’t shaped up by next spring.