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.

Published by

Robert Scoble

As Startup Liaison for Rackspace, the Open Cloud Computing Company, Scoble travels the world looking for what's happening on the bleeding edge of technology for Rackspace's startup program. He's interviewed thousands of executives and technology innovators and reports what he learns in books ("The Age of Context," a book coauthored with Forbes author Shel Israel, has been released at http://amzn.to/AgeOfContext ), YouTube, and many social media sites where he's followed by millions of people. Best place to watch me is on Facebook at http://www.facebook.com/RobertScoble

Comments

  1. Non sense — It is Go corporation founded by Vinod Khosla which did first tablet PC in late 80’s with lot of fan fare. Went belly up because there was no demand at the time. Bill Joy wrote most of the OS for the Go

  2. Interesting… nearly all of your points revolve around marketing which is Apple's bread-and-butter. We have tablets already and I'm not about to change platforms for the privilege of paying the Apple Tax ™.

  3. But, my dear Scobleizer, will he beat Gates and hit a homerun? I am an avid tablet user and have always said that the day he makes up for the Newton, I will switch to Apple in a heartbeat… Martijn @martijnsjoorda on Twitter (DISQUS doesn't work)

  4. No matter who the vendor is, I am simply unwilling to pay additional fees for connectivity for a device of this nature. This is one of the gifts of the Kindle, the built in access. Add to that a potentially low battery life? I am not willing to keep on paying and paying for shiny new things with that sort of performance.

    I am really interested to see what Apple actually produces, are they truly learning the lesson of listening to the consumer?

  5. No matter who the vendor is, I am simply unwilling to pay additional fees for connectivity for a device of this nature. This is one of the gifts of the Kindle, the built in access. Add to that a potentially low battery life? I am not willing to keep on paying and paying for shiny new things with that sort of performance.

    I am really interested to see what Apple actually produces, are they truly learning the lesson of listening to the consumer?

  6. Pricing is a +huge+ variable here. If I have to pay AT&T another $60 a month to use it I will be pretty pissed. I'll still buy one, because, well, I need to keep up on everything that moves in gadgets and tech, but I won't be able to convince my friends to buy one if that's the case. I bet this will rely heavily on Wifi, though, and that they'll get a carrier to provide a low-cost dataplan for it.

  7. I wonder how a tablet could affect the way I consume information? Now I use my phone very often. I use the desktop for development work and more comfortable reading/browsing.

    Loved the length and rationale in your post Robert. Looking forward to a June meetup! (you get the emails?)

  8. Robert. Here is a question for you: When Apple introduced the ipod, they compare it to the old style MP3 players. When they introduced the iphone, they compared it to the blackberry and other “smart phones”. Who do you think they are going to compare the ipad to? Kindle? Netbooks? Both?

  9. I really do think it is insane of you guys to get pent up about something that at this moment in time does not exist! Please, please get real and save your comments both pro and against for when the product has been launched on Wednesday! It may be nothing like all the excellently arranged hype, it may be some thing completely unexpected! I for one don't need to consider anything Apple, for as long as Apple keeps on charging us UK people upto a 25% extra I will never consider Apple products no matter how good they are.

  10. Took Apple long enough, but its more eReader/bigger iPod than Tablet technically, at least going by the long ago Elk Grove prototypes. iPod touchisms, music, eReading, WiFi, Apps….actually pure Tablet is last on the list. It will succeed, in the limited cult way, as Tablet be not really central to it, Macbook-Lite Touch more than tablet. But I guess the paint app will out rage, ArtRage.

    The marketing mistakes per Microsoft in terms of Tablet could fill a book (I was there I saw all the drops and the missed opportunities) but even so, the real culprit was a lack of any sort of compelling need, outside of difficult to integrate verticals and some gimmickery Educational apps.

    NEC? Whatever. No one took them seriously anyways, more a please-Bill-Gates-prototype. The Motion and HP Slates got all the attention, until pure Slates bubbled-out and everything went convertible. NEC was thin and light, but that was it, battery life was in real world use around 45 mins, 2 hours was not doing squat with it, off WiFi. And the stupid Wifi attenuator was weak and broke off all the time. I really wanted to like the NEC, but obvious it wasn't any more real than Dukakis was a candidate. So no matter all your newsgrouping and trade show harping, no biggies even bothered a look. The richie Redmondites and curiously insane early-adopters were the only ones that showed any interest.

    The Problems…

    1. Poor Ink integration, Windows 7 fared better, but it's still not a pleasant environment, and XP and Vista were trainwrecks. Office is still an Ink no-man's-land.
    2. Price, Resolution and over-expensive Vertical market third party software mainly.
    3. They abandonwared MS Reader and and sort of eReadering, too early, too expensive, way too DRMish, Steve Stone stubbornness de jour.
    4. The typical insular inside-baseball MVP Microsoft community mode, Pocket PC redux.
    5. OEMs pushed all to Microsoft, Mircosoft pushed all back. Nothing ever got done. Even a simple lunch at CES was an earth-moving task requiring the Heinys to go 24/7 for weeks.
    6. 11 Agency retail trade tours and etc. were horridly handled. Trainwrecks wouldn't even cover it.
    7. Bill Gates dream hard-sell had skeptics everywhere. Marched in like it would set the world on fire, instead of letting it bubble-up. Press blowback was monumental. Apple does hype in reverse, which tends to succeed more, but then kills the markets by not letting OEMs in, and being cultic expensive.
    8. No touch. In spite of all the active digitizer talking points, people still wanted to touch it. Microsoft later reversed course, about when everyone had quit paying attention.
    8. Third parties looked, sniffed and avoided. And most became gee-whiz Educational tricks.

    Microsoft really can't market to consumers, never have, never will. And where they “succeed” they have to waste 8 billion or more to get there. Count them up….Zune, Wifi hardware, SPOT watches, WebTV, Ultimate TV/MSN TV, eReaders, Tablets, Origami, Phones, PDA/WM/CE, Red Ring of Death. Mouse and Keyboards for awhile, but even that bright spot hovers and dips.

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