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Posted by savio   April 17, 2014   3106 views
I found this wonderful article online that seems to have been abandoned for some time now (source below), it's called:

Timing of Entry from PDAs to Smart Phones: The Evolution of an Industry

Despite having innovative and sophisticated product designs, most of the early PDA companies failed. This was mainly because the success of PDAs was dependent on several aspects of enabling technology that had not been fully developed at the time a flurry of companies ventured into this sector. The success of PDAs was dependent on the invention of enabling technologies such as handwriting recognition software, modems, and power and memory miniaturization.


Several enabling technologies had no capacity to support PDA manufacture. Handwriting recognition was a formidable challenge. This pen-based input technology had an estimated accuracy of 95 percent, but the 5 percent inaccuracy level was disturbing for users of the devices. Moreover, many users had envisioned wireless connectivity to be a key feature of PDAs. Disappointingly, PDAs had to use large and heavy modems that users found to be cumbersome. Achieving wireless connectivity would significantly increase the size of the device, and that was not an option for users. The devices were also unpopular because of their low processing power and battery life (Zheng & Ni, 2006). Replicating unsophisticated versions of office software products required more memory and storage than a typical electronic organizer. Additional memory and storage capacity translated large, heavy and expensive devices; a complete turn off to users.

Apart from technological problems there was market confusion about the devices. Potential customers were not aware of the PDAs functionality. In the early 90s, the market was still incredibly immature. PDAs were more expensive than desktop systems. The development cost for PDAs was high and companies were compelled to sell large volumes of the devices to benefit from economies of scale and make any profits, but this was not possible. Potential customers were not sure of the availability of software for the devices, their compatibility with existent computer systems and their performance. These factors hindered their willingness to purchase PDAs. Demand for the device was low because it poorly addressed consumer needs. Companies also failed because they were not clear about their target market. Some companies positioned it as a mass-market, personal, electronic device, others targeted mobile executives, while others targeted vertical markets. In 1993, Microsoft’s announcement of launching WinPad affected many companies because their customers withdrew orders in anticipation for Microsoft’s PDA. Ultimately, companies failed because they ran out of capital. Revenues from the sale of PDAs could not match the immense development costs for these devices.

Early PDA companies could have survived if they had focused on technological inventions and product positioning. Early PDA companies did not venture into the market at the right time. It was vital to develop enabling technologies before designing PDAs. It was crucial to invest in research and development to come up with affordable ways of maximizing efficiency, performance, battery life, storage capacity and speed of processing, before entering the market. Sleek, light and affordable PDAs would intrigue consumers and achieve market dominance. Moreover, a different marketing mix could have assisted early PDA companies to survive. There was need to focus on promotion to create consumer awareness of the capabilities and functionalities of PDAs. Consumers would be ready to purchase PDAs if they had no doubts about the devices’ compatibility with existent computer systems, software availability and other pertinent issues. Effective product positioning could have been instrumental in financial success. PDA companies could have survived if they focused on a distinctive group of consumers and customize the devices to meet their needs. Companies should have delayed their entry into the market so as to avoid running out of capital. They also could have benefited from joint ventures with financially stable organizations.

Palm Computing succeeded where other companies had failed because Palm designed a product that was affordable, fast and unsophisticated. The product sold for less than $300, and this attracted numerous customers as the company managed to sell 350,000 units within a year, and a whopping million units within 18 months of the product’s release. Palm Computing had the support of numerous developers and this enhanced their product innovation and efficiency. Palm’s marketing mix was apt. Product pricing attracted numerous customers. The product was fast and simple, making it a reliable, mass-market electronic device. Palm Computing did not release the PalmPilot into the market until 1996. Contrary to the early 90s, when enabling technologies lacked vital capabilities, there were some inventions that had been made by 1996, creating a solid foundation for Palm’s PDA designs (Ainamo & Korhonen, 2003).

Apple did not suffer any disadvantages from its late entry into the smart phone market. In fact, Apple’s timing was apt because the iPhone became an immense success. In merely 74 days of its release, the iPhone achieved a record sale of 1 million units. The company’s exclusive arrangement with AT&T revolutionized the smart phone market, leading other companies to scramble for a phone anchored on the touch screen mode to compete with the emergent giant. There were several factors that enabled Apple to successfully enter the smart phone market when it did. Apple capitalized on the mature enabling technologies that were in existence at that time. By 2007, there was significant technological advancement in battery, memory and storage capabilities. Complementary technologies such as wireless internet and GPS were continually evolving. Apple’s iPhone also became a splashy commercial success because of its streamlined, exceptional and stylish range of features. Apple’s key competence was the ability to develop an incredibly attractive and intuitive interface. This interface created more value with a sophisticated, fully-fledged smart phone than with a simple device such as the PalmPilot. The iPhone capitalized on the success and popularity of the iPod, enhancing the music capabilities of the iPod with the ability to play both music and videos.

Apple benefited from its late entrant because customer needs in this sector had not been fully understood yet. Apple’s innovation provided a dramatic improvement over previous smart phone solutions, especially through its touch screen technology. This enabled the device to achieve enormous commercial success. The company also avoided the risk of losses that early entrants incur through research and development expenses, and apple did not have to endure significant periods without revenues because Nokia, Motorola, Samsung, and HTC amongst others, had prepared the consumer market for smart phones (Boone & Kurtz, 2009).

As different marketing papers show, there are increasing returns in the smart phone market but is highly unlikely that it will end up in a single dominant operating system for design. Smart phone sales are expected to rise to over $90 billion in 2013 (Ilyas & Ahson, 2006). In 2008, the largest operating systems were Apple’s IOS, Microsoft’s Windows Mobile and Blackberry’s OS. However, Google’s Android, Nokia’s Symbian and the Linux Mobile platforms have taken mobile devices by a storm. Each platform continues to develop numerous, incredible apps and features to have a competitive advantage and attract consumers. This fierce competition is a win situation for the consumer.

Summary
           
There are a plethora of factors that determine the optimal timing of entry into a business venture. Certainty of customer preferences is critical. If consumer needs are well defined and established, it is prudent to enter the market early. If their needs are not well understood, it is vital to lay back and examine them critically. It is also essential to evaluate the extent to which a new innovation improves existent solutions. An innovation that provides a dramatic improvement of the status quo accrues instant consumer acceptance (Boone & Kurtz, 2009).
           
Yet another vital consideration relates to enabling technologies. If the innovation of a product requires the support of enabling technologies, it is essential for the technologies to be mature before releasing the product into the market. In some instances, the threat of competitive entry may be incredibly tremendous. In such cases, companies do not need to rush to the market in an effort to make increasing returns ahead of competitors. However, when increasing returns to adoption exist, it could be risky to allow competitors to have a head start because it could translate into a competitive advantage for them (Evans, 2002).

Early entrants have to evaluate their ability to weather early losses. First movers into a market bear the bulk of Research and Development expenses, and may have to endure significant periods without substantial revenue. As such, immense capital resources are a key ingredient. Capital resources are also crucial in accelerating market acceptance of products through aggressive marketing and supply chain development. Ultimately, a firm must be able to innovate early or quickly in order to have more options in timing of entry. Through essayswritinghub.com, one is able to attain best technology essays such as this due to their quality essay writing services.

Source: http://techessa.blogspot.ca/

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When I was in university, I really wanted this. It was popular for about a year (2007), then faded real quick in popularity with the students once the iPhone came out.
Posted on Jun 18, 2014 by savio
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