Friday, March 26, 2010

Vendor lock-in, the quick sell, and the rise of smart phones

Two or three years ago, I wanted to buy a GPS system. I was searching the database in of all of the models of GPS units produced by Garmin. At first I was astounded by the vast array of options available, then I eventually figured out a pattern in the table that Amazon made available. Every model that had a capability of subscribing to a Microsoft-based traffic information service cost about $100 more. I didn't figure I lived in a city big enough to have its own traffic data; I don't like Microsoft; I was happy to save $100. About a year later, Google announced a feature of the Droid phone OS which would provide turn-by-turn navigation. In response, Garmin's shares plummeted in October 2009, according to the Wall Street Journal. Google was giving away for free on a smart phone a feature that you could have easily paid $200 for as a standalone device, plus $100 or more for the right to pay additional subscription fees to Microsoft.

1) I bought a clock from Brookstone that was supposed to never need resetting because it was permanently set with the correct time. Guess what-- it needed resetting out of the box, it didn't have the correct time. I took it back.
2) I bought two wireless weather clocks from Brookstone. It broadcast the correct time and 5-day weather forecast for my city. It was an amazing device. Miraculously, both stopped working after about 4 months (even with replaced batteries). There wasn't any sign in the store informing me it was a limited time service.
Both of these items have features that are duplicated by the smartest of smartphones. Ads for Google's new Nexus One tout its ability to display the correct weather and time when left on its charger stand.
In my humble opinion, there's some cynicism behind both companies' decisions listed above. Not so much how can we serve the customer but how can we get their money. Both problems just want me to rely on an Ipod Touch as my only alarm clock. The problems make me want to get a Google Nexus One. I believe what is radical about these phones is not just the new technology but the empowerment of the consumer. Instead of purchasing a series of single-purpose, barely functioning, electronic devices, we'll just buy another $3.99 app for the multi-purpose device we're already carrying around. As it's probably more fair and green, I hope this model continues to be a business success.

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