Tech product buyers in the United States looking for hot items are always open to identifying the items they want to purchase with “high tech” or “advanced technology” brand labels. This openness borders on gullibility. Savvy marketers can use it to their advantage.
In 2013, Small, Smart Mobile Devices (SSMDs) are hot items. Several computing concepts, including cloud, Software as a Service (SaaS), Bring Your Own Device (BYOD) and Elastic Infrastructure depend directly on market interest in SSMDs.
Industry pundits usually refer to the market leaders in the SSMD space (Apple, Google Android, and Samsung) as “high tech” businesses with “advanced technology”. But we think these industry players are really good at building products for commodity markets. Their manufacturing methods may be innovative and advanced, but the market for SSMDs is pure commodity.
On Thursday, May 9, 2013, the All Things Digital blog published an article by Arik Hesseldahl, Samsung Galaxy S4 Costs $237 to Build, Teardown Analysis Shows. The techniques Samsung has implemented to control the cost of manufacturing its “leading edge” “smart phone”, as Mr. Hesseldahl details in the post, are all designed to bolster the competitive position of the product in the market. With manufacturing cost kept as low as possible, Samsung is better able to deal with each of the five forces Michael Porter covers in his classic article on the topic of competition, The Five Competitive Forces That Shape Strategy. Reading Mr. Porter’s article, most people will acknowledge the scenarios he depicts, for example, competition in the airline travel market, the photo snap shot market, etc. are all commodity driven.
Product marketers thoroughly familiar with commodity markets are highly likely to do a better job hitting revenue targets at tech companies embroiled in the SSMD market, or the market for applications dependent upon SSMDs, than their “leading edge” peers. Why else did Steve Jobs roll the dice on John Sculley from Pepsi?
If your software, or hardware business can use a different perspective on the market factors actually impacting your bottom line, please contact us. We can bring nearly 30 years experience to your challenge, which may be just what you need.
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