Marketing 2.0

Google's big test

Google's recent acquisition of Motorola Mobile will be a major test for the company going forward. While they have more than adequate financial resources to absorb the new business and invest in it for growth, success in the mobile handset market is certainly not guaranteed. Why? Quite simply because Google is not a device company.

Google's expertise lies in software. They've parlayed an innovative search algorithm into a large and profitable Internet media company. One thing they have never done successfully is design and produce devices. What's the big deal with this? It's a lot harder than you might believe. Most companies have one core competency. When they step outside of that comfort zone, they often fail. Consider Apple. Their core competency is developing a simple and elegant user experience with technology devices. In the beginning, it was their graphical user interface for PC's. When Microsoft copied this with their Windows operating system, Apple fell on lean times for many years and became a niche player in the PC market. Still, they persisted and when Steve Jobs returned to the company, he led the development of OSX, a big leap forward in the personal computing experience.

Apple later expanded into the MP3 market and more recently, the mobile phone and tablet markets. The iPod, iPhone and iPad products have produced unprecedented growth in both sales and profits. While entering new markets is always risky, Apple simply applied its core competency in all of these cases. Great design, innovative features, and an intuitive user experience are hallmarks of all their wonderful gadgets. The one real risk they took outside of their core competency was opening their retail stores. Despite predictions of failure from retail experts and investors, the Apple stores have fueled much of their growth by providing a channel to deliver products and outstanding customer service.

Google will need to become adept at product design, component sourcing, contract manufacturing, retail marketing, and customer service. That's a tall order for any organization without the experience and expertise. It will be interesting to see how this unfolds. 

 

Google buys Motorola: What it means

By now you've probably read that Google is paying $12.5 billion to buy Motorola's mobile phone division. What does this major acquisition mean? Here are my initial thoughts:

Vertical integration - is clearly the best business model in the mobile device market. Apple has demonstrated that with their incredible growth numbers since releasing the iPhone and then the iPad. It's a bit ironic since this model was a failure in the computer market. Microsoft focused on selling operating systems and became the dominant platform. Apple integrated hardware with the operating system and became a niche player. It's all so different in the mobile market, however, and Google realized they were not going to generate nearly as much revenue selling the Android operating system to device manufacturers.

Market growth - in the mobile sector is really outstanding. Growth is running around 20% this year and smart phones are rapidly becoming the most common computing device on the planet. Major companies cannot afford to ignore this market and Google's investment clearly signals where they see much of their growth coming from.

Microsoft's next move - will be to buy a device company in my opinion. I think they will realize that to compete with Google and Apple in the long term, they will have to market devices. This means that Nokia and RIM are potential takeover targets. As an investor who's lost 50% on my RIM stock, I hope this comes sooner rather than later. 

Market consolidation - is rapidly proceeding with early leaders like Nokia, Motorola (remember the Razr?), and RIM (remember the Crackberry?) falling to the wayside in favor of Apple, Google and Microsoft.

 

 

Coll mobile app of the day:BMW's DriveNow

The mobile space continues to get marketer's attention. especially when they can utilize location-aware technology that's built into many smartphones these days. Here's an innovative program for short-term car rentals that BMW launched in Munich. Wouldn't that be nice over here?

BMW's DriveNow App Outsmarts Zipcar | Co.Design.

Savvy Scan - Very cool mobile app!

Take a look at this mobile application. It allows you to scan the barcode of a product in a retail store and then get comparison pricing from other local retailers on the same item. 

Mobile Marketing: Is Channel More Important Than The Product Itself?Thoughts from Ogilvy’s Rory Sutherland

Here's an interview with Ogilvy's Rory Sutherland on mobile marketing. I posted it here because I think there's one great insight to consider - is the channel more important than the product itself. Read and decide for yourself.

MobiAD » Mobile Advertising News » Mobile Marketing: Is Channel More Important Than The Product Itself?Thoughts from Ogilvy’s Rory Sutherland.

Prank your friends with Captain Morgan

Here's the latest in mobile marketing. Captain Morgan allows you to prank a friend by sending a customized voice-mail message. My favorite is the secret female admirer who spotted you in a bar. OK, I'll admit that I sampled that. You can also select the angry boyfriend. Just put some basic info in on your friend and he/she will receive a voice message on his/her cell. It's a pretty neat way to spread the brand message virally. Try it yourself on the What Really Happened Last Night microsite.