Sunday, January 16, 2011

You can't beat number one?

A marketing guru once said that "you can't beat number one". So don't even try. You know, Hertz and Avis... "We try harder" (but we know we'll always be number two).

But... In the eighties, Nikon was the unchallenged champion of the pro camera market. Then Canon made better autofocus, and for many years they were the Big Number One. But then in the naughties Nikon made better low-light cameras (the D3), and they took the market back!

On the other hand, nobody, not even the mighty Microsoft, has managed to take a good bite of the MP3 player market. Apple and iPod owns it.

I think that what it boils down to is:
You can beat number one. But you can't do it with marketing. You have to have a product which in some important aspects is clearly, demonstrably better, at least to some people. Or in other words, an important niche at least.

That is how Apple made a good living side-by-side with Windows in the Nineties. Everybody else were killed off, but Apple's Macs had some charm and usability advantages which gave it 5-10% of the market, and they lived well, even if they didn't dominate.

So aaaall those companies (50?) making me-too tablets now (2011), they won't make it. Only those who have a unique feature which will make some people choose it over the iPad, will survive. Heck, it's possible one will beat Apple to the number One spot, but it's unlikely. And frankly, who cares? Do you want to beat everybody else into the dust or do you just want to make good products and have a good business? Personally I think the last one must be much less stressful in the long run. I mean, even as number two, Steve Jobs was a billionaire, and how much more than a billion dollars do you really need?

10 comments:

Andreas Weber said...

Ahem, it may seem like Nikon's D3 was introduced ages ago - but in fact it was only in the second half of 2007. (I remember quite well because I bought mine early 2008, when they finally became available without pre-order.)

eolake said...

Well, it's ages in digital years! :-)

But I do think that's when Nikon really got ahead of Canon though. Thanks.

eolake said...

The D2x, by the way, was awful in terms of noise. It had pretty bad noise even at ISO 800. The D3 was a *huge* step up.

I wonder what the heck they will do for an encore. Hopefully not higher resolution!

Andreas Weber said...

> But I do think that's when Nikon really got ahead of Canon though.

That's definitely correct. Since 2007 Canon's market share dropped rapidly, while Nikon's (and Sony's and Panasonic's) grew.
The best indicator were the sports shooters. Before the D3 the vast majority used Canon gear - but it's said that in Beijing 2008 Nikon already had more than 50% share.

> The D2x, by the way, was awful in terms of noise.

Tell me about it! Before my D3 I had a D200 (supposedly even a tad better than the D2X regarding high ISO noise). It's like night and day.
But remember 400 ISO in 35 mm film? ;-)

> I wonder what the heck they will do for an encore. Hopefully not higher resolution!

If they go for higher resolution, then please add something like Phase One's "Sensor+" technology (patent pending IIRC). Let's say a 48 MP sensor (that's still about the pixel pitch of a Panasonic G1/GF1!) with the option to couple groups of 4 pixels of for a 12 MP high sensitivity sensor. Best of both worlds!

eolake said...

Yes, that sounds good.

Re film: I prefer not to remember.

Miserere said...

Eo, it was called the noughties, not the nineties :-)

eolake said...

Ooops!!
Thanks.

Anonymous said...

On the general issue, I recall stumping the prof. in a good-sized economics 101 section mid-70s. Perhaps the topic was economies of scale where often producing more widgets lowers unit cost.

"What if rather than higher quanity one increased quality?."

At the time Toyota's market share rose while Detroit's products stagnated.

eolake said...

Yes.
I have read the opinion that the Japanese cars won in the seventies simply because Detroit had focused on getting more money for less car, and the Japanese focused on better quality.

Joseph said...

I think you're really onto something. If you interpret "less car" as "less miles and years of service", the Japanese cars of the seventies (and beyond) won on the cost side too. If you wanted to drive a car until it wore out, you'd probably still be driving the Toyota 10 years or 300 km later and going strong, whereas long before that the Ford or Dodge would have needed repairs so expensive, and have lost so much value, that fixing it wasn't worth it. And the Japanese models generally just worked better right off the lot, and cost less to operate in terms of fuel efficiency. Twice or more the utility and enjoyment for slightly more up-front cost? Easy decision. Quality influences the market the same way with computers, cameras, or potentially anything else.