by Carlo Longino

Is The Best Way To Ensure Success To Lock In Your Customers?

from the never-knew-dear-abby-gave-advice-to-tech-companies dept

The downslide of Palm is a long-running tale, and the latest development is another round of rumors that the company is up for sale. Nokia has been mentioned as a possible buyer, even though such a deal wouldn't make a lot of sense, with Motorola and a private-equity buyout also mentioned. A story from BreakingViews in the WSJ laments the fall of Palm, saying it happened because the company "failed to build competitive barriers around its devices, so consumers weren't locked into its products." In short, it says the ability for Palm users to easily export their contact data from the devices made it too easy for them to switch to devices made by its rivals. Palm's made plenty of missteps along the way, but this really isn't one of them. Companies that can't compete any other way rely on barriers like this to force customers to stay. The article cites the example of the iPod, but badly misses on the lock-in part, not citing the role music bought from iTunes plays, but rather the bizarre idea that if users got a different brand of music player, they'd have to re-rip all their CDs. It falls further off the track when it cites the Motorola RAZR, saying it offered "insufficiently sticky features" to keep users from switching away. The RAZR didn't sell on features, it sold on design, and playing to fashion means playing to a clearly fickle market. In any case, it also ignores the realities of the handset market, where many users switch devices on a fairly regular basis. Locking in your customers isn't the way to keep them. Perhaps instead, companies should spend their energies on creating the best and most innovative products they can, making customers want to use their products, rather than simply feeling forced to.

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  1. identicon
    DentalChicken, 6 Mar 2007 @ 10:46am

    lockin schmockin

    I have been a palm user from Palm II until the Treo 650. I have hacked the snot out of each unit I have owned and have absolutely loved the product for its massive collection of nerds making the strangest little apps and hacks. 2 months ago, with great heaviness in my heart I bought an HTC Dash Smartphone and have not looked back since. (you can edit the registry for G-Ds sake!) Palm, so smug in its market domination, was not ever ready for the juggernaut that is Microsoft Pocket PC. It was fat and slow to respond to an eventually, legitimate, determined, well funded competitor in the market. Eventually through its own mismanagement and poor market response, shat on itself for so long that it became obsolete. Period. Capitalism and competition in action. This article in the WSJ saddens me. Did this guy ever even own either product? So strange.

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