Mark Kolier’s Blog

Steve Jobs has ceded his CEO status to Timothy D. Cook. Apple aficionados (I do not count myself among them) were more than eagerly awaiting what they thought would be another watershed event – the unveiling of the iPhone 5. On Wednesday October 4th Mr. Cook introduced….the iPhone 4S. Huh?

Virtually indistinguishable from the iPhone 4 but billed as a ‘new’ version, the iPhone 4S comes with a so called virtual assistant ‘Siri’, that recognizes voice commands. I looked at Siri and thought – Iris spelled backwards. What does that mean? Having voice commands does not seem all that new or revolutionary to me.

Apple says it is packed with better technology, including a more advanced camera. It also includes a more powerful chip known as the A5, the same microprocessor that acts as the brains inside the iPad.
The company also said the new phone would run on two kinds of cell phone networks, GSM and CDMA, allowing it to operate worldwide – which is only something new for Apple since many other smartphones have been able to operate on both networks for years.

Thankfully Mr. Cook did not try to copy the black mock turtleneck and jeans look displayed by Mr. Jobs. The ‘new’ phone will be available on A T & T, Verizon and Sprint. Maybe the bigger news is that the now ‘older’ iPhone 4 will drop in price to $ 99 from $ 199 if customers commit to a two-year contract.

Apple has come out with a new version of the iPhone each year since its initial release in 2007. So Mr. Cook HAD to come out with something to stave off what would be inevitable questions of how different things would be ‘post’ Mr. Jobs. Unfortunately there were many more questions raised by the release than were answered. The iPhone remains the most important product for Apple as it is responsible for nearly half the company’s total sales.

There’s no question Steve Jobs will be sorely missed at the world’s largest company (measured by market capitalization). However, I can’t help but feel a little sorry for Tim Cook’s desultory debut as the lead dog. Mr. Jobs is very sick and his sudden departure no doubt caused a huge ripple effect as well as a change in plans for future releases of Apple products. I cannot imagine Steve Jobs having a press conference to announce such a boring and ho-hum upgrade.

Agree or disagree?

In the 1960’s the phrase ‘Made in Japan’ was not a positive one. At the time Japanese manufactured products such as televisions and transistor radios were known to be cheap and likely to break or break down. The Japanese worked hard to change that perception by making quality goods and imbuing the latest technology in their manufacturing processes.

South Korea’s Hyundai Motor Company http://www.hyundaiusa.com was founded in December of 1967 – a fact that actually surprised me since I only recall hearing of Hyundai when it introduced the Hyundai Excel in 1986 (I was actually also surprised it has been twenty-five years already). The early Hyundai Excels were a slight step up from the horribly rated Yugo which was introduced in 1985, but in my mind they were pretty much lumped together as cars that were cheap, and ones that I would never purchase.

By 1988 the Yugo had virtually ceased being sold in the United States. Today Hyundai is one of the world’s more trusted automobile brands. In my mind it is one of the more impressive brand story turnarounds in history. Hyundai’s Elantra and Sonata are so popular that there are actually backlogs of several months for certain colors of those models.

Hyundai accomplished this by focusing on making reliable, smart looking vehicles that were affordable to the American public. Now people spend more than $ 30,000 for some Hyundai Sonatas and are happy to do so. The expectation is that when purchasing a Hyundai you are getting a reliable near-luxury vehicle at less than luxury car prices. Additionally Hyundai is not falling into the trap by attempting to churn our cars faster and faster to take advantage of its now positive market perception. In fact Hyundai appears to be doing the opposite, holding back production to be sure it maintains its new image for quality while creating an even greater demand for its cars.

To me Hyundai’s restraint is one of the most interesting things. Too often investors in companies once they smell an opportunity to cash in, push their limits, and in so doing create more problems than they solve and actually commoditize their own efforts (think flat screen televisions for example).

I don’t drive a Hyundai but have rented one and would consider it for a future purchase. I hope Hyundai can stick to its current conviction.

It’s difficult for me to recall another brand story turnaround quite like Hyundai. If you have any please share them.

Amazon.com CEO Jeff Bezos presented the new Amazon Kindle – called ‘Fire’ this past Wednesday in New York. I’ve written much about the Kindle in general and had not planned to write about it particularly since yesterday’s unveiling offered few if any surprises. We knew there would be a 7 inch color screen, a touch screen, Wi-Fi internet access and a 30 day free trial for Amazon Prime (which includes unlimited, instant streaming of over 10,000 movies and TV shows and free two day shipping on millions of items) which if consumers do not opt out it will be an additional $ 79 renewable ‘gift’ to Amazon that would keep on giving year after year – Mr. Bezos is a smart guy indeed.

Besides access to Amazon Appstore, the Kindle Fire will include a cloud-accelerated “split browser” called Amazon Silk, free storage for all of the user’s Amazon digital content in the Amazon Cloud, built-in email app that gets webmail (Gmail, Yahoo!, Hotmail, AOL etc.) into a single inbox.

We also knew there would be no cameras (unlike the iPad), and no 3G or 4G network access (iPad’s have 3G and Apple is planning 4G access). The Kindle Fire 1.0 does not seem to me to be the iPad killer. The sale price was a bit of a mystery although most experts predicted $ 249 or less and it came out at $ 199. Amazon also released pricing plans for its entry-level black and white Kindle at $ 79 which makes it the least expensive e-reader on the market.

In releasing the Kindle Fire in front of the 2011 Christmas season at what appears to be close to its manufacturing cost, clearly Amazon is banking on increased sales of digital music, videos and books as well as other content if it is to make the new Kindle platform a winning one. The iPad (at more than twice the price) will continue to appeal to those that have the ability to afford it, and are desirous of the larger screen (a pain in the neck to carry around as far as I am concerned) and Apple App Store.

Other tablet makers as well as the Barnes & Noble Nook have great reasons to be concerned. The RIM (Blackberry) Playbook tablet is already gasping for air and the Kindle Fire will likely snuff it out completely. I believe sales of other popular Android based tablets (Galaxy, Xoom etc) will be impacted since there truly is another non-Apple alternative. If the Kindle Fire is not the iPad killer it may turn out to be the killer of many other tablets.

It’s also possible that the market for tablets could be split into two – a premium market headed by the Apple iPad and the everyday (lower end) tablet that is affordable to so many more people. It makes me wonder how many people will decide to own both devices. After all – does owning an iPad preclude one from buying and using an Amazon Kindle Fire?

As a serial early adopter I likely will pick up an Amazon Kindle Fire – 1.0. I still don’t have an iPad although I’ve used one several times and it is a great and cool piece of technology. I have and actually use my original Kindle and it still works fine. But many times since I bought the original Kindle I have wished that I waited for the 2.0 version which has been out for quite some time now.

Amazon would never tell but my burning question is how long will it be until the improved version of the Kindle Fire comes out? I can hardly wait. And that’s the problem.

I attended the OMMA http://bit.ly/q9cZ36 (Online media and marketing association) conference in New York City yesterday. While it is a two-day event I could only steal away for the opening sessions on Monday morning. I’m glad I went since the opening keynote was delivered by Jimmy Wales – Chairman Emeritus and founder of Wikipedia.com. Mr. Wales did a really good job in his short fifteen minute keynote (which by the way seems to me to be an ideal amount of time), and I gained an ever greater appreciation for Wikipedia.com and its mission.

If you spend any time on the internet you are no doubt aware of Wikipedia.com. Touted as the world’s free encyclopedia Wikipedia is available in 282 languages. There are more than 3.7 million articles in English, 19.7 million articles in all with more than 90,000 regularly active contributors. Of course there are reports of errors and vandalism that most of the time are corrected – and corrected quickly. And yes my source is – Wikipedia.com.

The content on Wikipedia.com is all user-generated and contributors are not paid. The crowd acts as its own police force when it comes to what is accepted as content and what is not. The accuracy (as of 2005) as reported in Nature showed that the science articles they compared came close to the accuracy of Encyclopedia Britannica. Personally I have come to rely on the accuracy and concise and easy to digest information contained on Wikipedia.com. I may never buy another set of encyclopedias again.

When Wikipedia.com founders Mr. Wales and Angela Beesley determined that there were topics that did not fit a traditional encyclopedia model, they then started Wikia.com. Wikia’s user-generated wikis range from video games and movies to food and environmental issues – it is considered a collaborative publishing platform for pop-culture. Wikia, Inc. attracts more than 45 million unique visitors per month to its 275,000+ enthusiast communities. Particularly popular with the gaming community, Mr. Wales noted that some Wikis are started and then simply die-off due to lack of interest. It would have to be that way when you really think about user-generated content and the areas of interest in which people would feel compelled to start a Wiki.

What I like best about this ten-year old platform is that at its core it is all about making the world a better place.

I wonder if and how much Julian Assange’s Wikileaks.org (unaffiliated with Wikipeida.com) has damaged Wikipedia.com’s brand?

Netflix CEO Reed Hastings has made a number of really good moves over the past ten years. From knocking out Blockbuster (and nearly every other brick and mortar video store) to becoming THE default source for movie rentals, Netflix parlayed it all into a high flying stock offering and has continued to be a consistent performer. In fact the business even remained solid through the recent (since 2008) seemingly endless economic downturns.

And even more suddenly it all is coming crashing down. The rise in pricing for Netflix subscribers was more than eyebrow-raising but even more so was the creation of something Mr. Hastings is calling ‘Qwikster’. The plan was to have ‘customers’ have both a Netflix account as well as a Qwikster account. I cannot think of a single person that would want to operate two accounts when they only had to have one account before.

The result was that more than one million Netflix account holders cancelled their accounts. That’s a stunning number. A company known for being customer-friendly and really understanding their customers apparently does not have a clue at all.

Supposedly Netflix had 25 million customers paying $ 10 per month before the move, so by losing 1 million customers it would follow that there are now 24 million customers paying $ 16/month. Doing the math would make you think Mr. Hastings remains a genius. In fact there are reports that Netflix had figured in a certain amount of customer attrition in raising their prices.

I am not sure how many people have signed up for Qwikster. I can assure you that I am not one of them. In fact we had cancelled our Netflix account before Netflix made the changes as we were not watching enough to make it worth the expense.

Netflix has made it better for…. Netflix. They did not solve a customer problem at all and may have created some in the process.

But I cannot keep from wondering – was Mr. Hastings really that stupid for making the move? They now have fewer but more profitable customers.

What do you think?