I got back from IBC on Tuesday evening and seem to have been catching up with the news, ever since. There was plenty of news, with the HTC & Google deal taking the front cover of MDM this week.
The deal shows how the world has changed. In the past, markets were inefficient and buyers had very incomplete information about alternative products and prices, but the internet has changed everything. As a result, winners are winning really big and losers are losing very fast. Early mover advantage is getting much more important in more and more markets. In times past, it would have taken HTC a lot longer to build up its brand, but it would have given much more stability in maintaining its business. Happy resellers would have helped to cushion some of the effects of not having the very best version of the latest phone.
The same effect can be seen on eBay. I’m a heavy user of eBay – I love the way I can buy and sell used products and find very obscure items in a minute or two, often with shipment from China for almost nothing. However, if you look at eBay sales on some items, one vendor that is just a few pennies cheaper often have huge volumes of sales, where others have little or none. I suspect the effect is that buyers like me will look at the number of items sold to try to judge the degree of risk in buying. It feels a lot safer to buy from someone that has already sold several hundred units than to buy from someone that has sold none.
Note this advert for a battery for my camera on eBay. Would you buy the cheaper product that nobody has bought yet, or go for the more expensive one that seems popular and ‘safer’?
(I’m sure that vendors have worked this out and probably game the system by buying some of their own products, and paying the eBay fees just to get the ratings)
A second event that happened this week was the failure of Bell Pottinger, a public relations consultancy. A single ill-judged campaign for a single client has put the company into liquidation – a combination of the rapid speed of the internet in spreading the story and the huge impact of social media. A few years ago, the news of a problem in one country would have been very unlikely to have spread and certainly not with this speed.
The change in the rate of success and failure has been an incredible factor in the last few years and there’s no going back. The world of consumer electronics has become a ‘hits’ business, more like the pop music charts of the past, where a new group could appear and rapidly go to the top of the charts. Equally, they could disappear again as a ‘one hit wonder’.
HTC is much more than a one hit wonder, but it certainly is going to have to continue to pivot to prosper. I guess a billion dollars helps!
Bob
