Mobile Telephony and Computing: Moving Down the Product Lifecycle

May 2002 Marketing, Selling

At the Mobile Wednesday event last week, the speakers approached at mobile telephony and computing with distinctly different viewpoints yet both were clearly in the maturity phase of the product lifecycle. AT&T’s Rod Nelson encouraged us to purchase more features that would make our mobile phone our own in his personalization campaign, while FedEX’s Ken Pasley was pressing for the technology providers to make it easier and cheaper to use in his transparent campaign. The tension between these two roles was observable, yet the topics were both concerned bringing the product through the same point in the product life cycle: Maturity.

At the maturity phase, the product management of new technologies must address two different needs of the market and competitive environment. On one hand, there is the need to proliferate the features to address the evolving demands of the current install base and address the competitive requirement to segment the market. This was clearly behind Rod Nelson’s concept of personalization. At the same time, technology laggards have avoided adopting the technology due to its complexity or price. This was echoed in Ken Pasley’s desire for more transparent technology and the need to lower his training and learning costs.

AT&T has long offered buyers unique features at an added cost. One of the great business advances in telephony in the last twenty years was charging customers for three-way calling, *69, and voice mail. These features cost little to produce but bring huge profits for telecom carriers. In the Personalization strategy of AT&T Mobile Telephony, AT&T is partly borrowing upon their own tried and true strategy to improve its business. But AT&T’s current Personalization strategy is also borrowing from Dell’s mass customization. The customization of the product for Dell has allowed it to segment the market more finely and, at the same time, produce its product at a high quality and a low cost. On the personalization front, AT&T was looking to expand its offering to multiple formats of image, text, video, and voice.

On the Transparent Technology front, both AT&T and FedEX were singing the same tune, but for different reasons. By transparent technology , the speakers were referring to an easier to use product and service that addresses specific needs of the market. AT&T sees transparency as a means to bring mobile telephony technology laggards into the fold. This addresses the classic question of what will it take for grandmothers to adopt the new platform. For FedEX, Transparent Technology addresses a significant cost of adoption: training and learning costs. When FedEX rolls out a new technology, they have tens of thousands of users to be trained use.

While these themes appear to be different, they both represent the need to take mobile telephony out of the early adoption phase and into the mainstream and market maturity phase of the industry. Classic issues of the mainstream portion of the technology product lifecycle are market segmentation to address evolving market, and reduced complexity and price to increase the overall size of the market by including the technology laggards. Geoffrey Moore captured this strategy theory well in his text “Crossing the Chasm.”

As an end note, these speakers were representing industry giants and the concerns of their firm. For Chicago new ventures, we have to ask what it will take to sell to these giants. At that question, Ken Pasley indicted the vendor community. He spoke of diminishing returns and claimed that when vendors come to him, they state that they want to do something for him, like migrate from 802.11a or 802.11g to 802.11b, but what he is looking for is a statement of value, what will it do for him? This is a clear issue with our marketing message focus on value and not on features.

The May Report, TECH BUSINESS BRIEFS, May 29, 2002

About the author

Tim J. Smith, PhD is the Managing Principal of Wiglaf Pricing, and an Adjunct Professor at DePaul University of Marketing and Economics. His most recent book is Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures.

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