Daily Archives: January 25, 2010

Lessons from Steve Jobs has learned from @BillGates’ purchase of NEC Tablets

NEC Tablet PC, 11 mm thick, released in 2003

It has been forgotten already, but there have been sexy tablets out for years. In fact, you might not know, but I used to work at NEC when it released their 11mm-thick tablet back in 2003! This was before I worked at Microsoft (I worked there from 2003 to 2006). I was working the phone lines and I will never forget one call from then Microsoft executive Vic Gundotra (Vic now is an exec at Google). It went something like this “I saw you talking about the new tablet on the newsgroups, I want the first one.” That’s a photo of the NEC device, it really was ground breaking and sexy.

He did indeed get the first one — in the United States. Bill Gates actually beat him by a few hours by flying to Japan and getting one directly off of the factory line there.

But a couple of months later Vic called me back and said “Bill Gates wants 400 to hand out to his CEO summit attendees (hundreds of CEOs from the world’s biggest companies).

One problem.

NEC could only make a couple of thousand of these every month for the entire world.

Which brings me to a list of lessons that Steve Jobs should have learned from by watching Bill Gates’ experiences with the Tablet PCs.

So, that’s the first lesson. If you have a sexy product, you need to be able to make more than a couple of thousand, at least for the first four months which is when most of your demand will come in. That was NEC’s first downfall. Misjudging worldwide demand has caught Apple many times in the past, too, and it’ll be interesting to see if they predict demand properly this time (lately Apple has been pretty good, but go into an Apple store and see if you can buy a 27-inch iMac — there are tons of reports of delays and problems). If you guess wrong on the high side, you can go bankrupt. Nothing like building a warehouse full of expensive machines that don’t sell (NEC had had that problem, which is why they didn’t gear up the lines for the Tablet PC). If you guess wrong on the low side, you leave major money on the table. My guess is Jobs and his teams are spending a LOT of time studying the market to make sure they get pretty close on filling the need.

Second lesson? You can sell a few thousand by doing social media marketing, but for real sales you need to go on TV and give people a reason to buy one. Vic later hired me to work at Microsoft and told me that I was the only OEM factory rep he’d seen in the Microsoft newsgroups talking about new products. Why was I doing that? Because NEC didn’t have much of a marketing budget and I wanted to find a way to keep my job (I knew the small mobile solutions group needed sales to avoid the chopping block — remember, this was during the last Silicon Valley downturn and we were very focused on survival). But, truth is NEC failed to build a global brand because it didn’t spend much energy on marketing and advertising. Which, made sense because they couldn’t have built enough anyway. But this shows the catch-22. They should have planned on making many more than they did, and supporting those with a real marketing budget. Back in 2003 this WAS a breakthrough device that would have been attractive to students and executives, but most never even heard of it because it never got through the noise. Apple has the best TV advertising in the business and can’t wait to see the ads start to appear. Wouldn’t be shocked to see another Super Bowl ad.

Third lesson? If you want to have Apple’s brand you must be near flawless. NEC’s Tablet, unfortunately, did have a couple of flaws that kept it from being used in some key areas like hospitals. First, the battery only lasted about two hours. Second, the wifi antenna was designed to flip up so it got better reception, but that made it look weird and also some people reported they broke off. Both are flaws that doomed the product, and worse, kept NEC from building a good brand where they could launch other products off from and gain traction. If Apple’s Tablet doesn’t have six hours of battery life, so you can use one on a flight across the US, Apple’s Tablet will be doomed too as people rush back to their Kindles (which last twice as long as that, if you turn off the wifi).

Fourth lesson? NEC’s tablet didn’t fit into the rest of its family very well. It was more of an engineering exercise to prove that the Japanese engineers could build a sexy piece of hardware. But they didn’t hire software engineers to design an experience that fit in with its consumer electronics equipment. Steve Jobs won’t make that mistake. Watch Steve demonstrate how you can flick videos from your iSlate or iPad or whatever it’s called to a new Apple TV. He’ll show many experiences that will show how Apple’s family are working together, from iLife to iPhone.

Apple brochure ad I was in at college

Fifth lesson? The young are the ones who will provide the base of support. NEC never figured out how to make its Tablet appeal to college kids, which was unfortunate because they were the ones who could have benefitted the most from a thin Tablet PC that you could write on. Think back to chemistry class. It’s hard to take notes about equations and molecule structures with just a keyboard. NEC could have put a full-court press on college kids by showing up to demonstrate how cool the Tablet was for them. Apple won’t make this mistake. They’ve been doing great marketing to college kids for 20+ years (the picture here is of an Apple ad that I was in back in 1992).

Mark Graham showing off the front page of the Mercury News (local newspaper showing me getting my iPhone)

Sixth lesson? NEC never got the press to support its Tablet. I don’t remember seeing it on many front pages of major computer magazines, much less front pages of newspapers, like the iPhone got on. Apple’s PR machine knows how to get the press to show up, and how to get them hot and bothered enough to put their products in key positions. Here’s a picture of the San Jose Mercury News. Note how it dominated front page. I guarantee that no matter what Apple will get front page coverage on hundreds of newspapers and in key slots on all major TV news, not to mention on tech blogs like Techcrunch.

Seventh lesson? To get people to buy you need to show them and put it in their hands. I sold quite a few of the NEC tablets by going to industry events and letting people hold the device. It WAS sexy back in 2003! But Steve has built something even better than what I had: a series of stores around the world so you will be able to get your hands on and try it yourself.

Eighth lesson? At NEC Vic first learned about the Tablet from me in a newsgroup where I posted some photos and info. Think about that for a second. A low-level employee was first to show off the NEC. While it was fun to break the news about this device, that was pretty lame. Imagine Apple doing the same. I can’t. You’ll first see this device in Steve Jobs’ hands.

Anyway, this is just a fun way to remind you that Bill Gates actually has been pushing Tablets for many years, but his failure in capturing the industry’s imagination has left the door open for Steve Jobs to hit a grand slam home run.

Why I will wait in line again

San Jose Mercury News image of me getting first iPhone

Ahh, it seems so long ago when my son and I waited in line to fork over more than $600 each to buy an iPhone. The image above is from the front page of the San Jose Mercury News (I was cheering to many thousands of people who were waiting to get into the store to buy their iPhones and who had waited for up to 38 hours to do so — my son and I were first in line, which was a lot of fun).

I will do it again for WHATEVER Steve Jobs introduces on Wednesday.

Yes, I am a fanboi.

But for why, you need to go back to the experience I had waiting in line.

Unlike the media spectacle on Wednesday, waiting in line is not a controlled PR event. It is a PR event, for sure, but not a controlled one.

I have never participated in an event before or since than that one.

Tonight I looked back at photos and reports that Thomas Hawk shared and I want to take you back to 2007.

What made it magical?

1. It was a shared experience. Everyone was welcome, from kids to old geeks. From rich to poor (we shared the event with homeless as well as famous venture capitalists and CEOs from companies like Smugmug and teams from many companies like Quicken).
2. No PR control. Katie Cotton wasn’t there and couldn’t control what we reported, when we pulled out cameras, or how unruly things could get.
3. At the end we got to walk into the store and get something that did, indeed, end up changing the industry.
4. It was better than any FooCamp or BarCamp or WhereCamp or whatever. Why? Because we didn’t need an invite and we could talk with Apple’s first software developer, Bill Atkinson, all night long. I bet we’ll never be able to repeat that, and THAT is an even better story to tell my grandchildren than to say I sat at an Apple keynote.

It might sound pretty damn stupid to say I will be waiting in line again, especially since this time I won’t have seen the device or the software or the accessories that are surrounding it.

But I can already tell you that I will wait in line again.

Why?

My brother in law worked at Apple on the iPhone for several years. He kept telling me about a tablet device that Steve Jobs was personally working on.

Since then other Apple execs (both current and former) have told me that something is coming that I’ll definitely want to have.

Now, you might be cynical. But, these people have delivered before and I’m pretty sure they will deliver again.

One thing about Apple: if they don’t have the goods, their PR people will wave you off of the event. I’ve seen past events where this has happened. The hype the past three months for whatever Steve Jobs is announcing on Wednesday is extraordinary but there haven’t been any waveoffs. In fact the hype is intensifying.

Even if this device goes on to be a market failure like the Cube or the Newton or Apple TV I will want to own one, if even for a few weeks so I can try it before selling it on eBay.

Add these two things together and, yes, I will be in line again.

Thomas Hawk, you in?
Don McAskill, you in?
Bill Atkinson, you in?

Plus, this time I bet we get Techcrunch to sponsor the party instead of just covering it.