Home > Technology, Telecom > Technology strategy for mature systems

Technology strategy for mature systems

February 5, 2011 Leave a comment Go to comments

Two separate news items caught my eye today:

  • Apple announced that it wanted apps on its vaunted iTunes AppStore to “behave” – i.e. any sales made via the app also need to be cleared through iTunes and not sold through other outlets.
  • Verizon who is introducing a much anticipated CDMA version of the iPhone-4 on their network announced it would be “throttling” data connections – i.e. anybody hogging bandwidth in a network node would see their data throughput limited so as to not impact performance for others on the same node.

Both moves are bold, controversial and (to many) outright offensive as it places limits on how the technology is used.   However, I take the view that as a market matures technology businesses need to respond to serve most of their customers.  Consider any technology product which is well into its adoption cycle (digital cameras, smart phones, computers, iPods, are all good examples).     The adoption curve among users follows a normal distribution with roughly five segments.

Nearly 68% of mature technology users are what I would call “mainstream” – folks like my father who can use a computer, a digital camera, etc., fairly well but would rather have a simple and seamless experience.   “Savvy” and “power users” are folks like myself who are early adopters and are constantly stressing the technology to new limits: e.g. over-clocking their computer chips, jail breaking iPhones, surfing the web on their Nintendo Wii, etc.

About 16%  of users (savvy + power) would complain about how Apple is trying to wrest control of all their content purchases and funnel them through the iTunes store.   But the other 84% would probably prefer to have Apple take care of their billing and downloading needs in one place rather than be entering their payment credentials all over the web.  iTunes handles purchases rather well!

Similarly, 84% users of Verizon’s data services will probably never be “throttled” and will likely appreciate their mobile data experience even better because of their new policy.   So those of us (including myself) who like to complain had better find the next big thing that is not a mature technology yet:   Anybots perhaps?  Meanwhile, both Apple and Verizon are focusing on the needs of a majority of their customers and hence doing well by their shareholders.

Categories: Technology, Telecom
  1. Swaroop Krishnamurthy
    February 5, 2011 at 12:45 pm

    Steve Jobs talked about open vs. closed systems on Apple’s last earnings call and argued that open systems don’t necessarily “win” in the marketplace. It is pretty clear that mainstream users don’ care much about closed source / closed platforms approach of either Microsoft or Apple; no wonder they are among the two highest market cap tech companies in the world.

    For other user segments in the aforementioned adoption curve, there will be opportunities to “curate” software and content on platforms such as Android; Red Hat is analogous example in the Linux world.

  2. Shyam Kamadolli
    February 5, 2011 at 8:38 pm

    Well said Swaroop. Agree completely that the power users will migrate to other platforms that allow them the flexbility they need. But they will still expect the open platforms to perform acceptably well along the dimensions where the closed systems excel.

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