The CMB Technology Pulse Blog

CMB Tech Pulse: Netbooks Will See New life in the B2B Market

 

The mobile computing market is abuzz with Apple announcing yesterday they have sold 3 million iPads in just 80 days, Google's press conference today on Droid X and the shipment of the iPhone 4. With each release devices are getting smaller (well maybe not the Droid X), faster and smarter.  Prices are also dropping as the competition continues to heat up.  Smartphones, which were once just used by the business traveler are much more mainstream and now marketed to consumers thanks to the iPhone and Verizon's buy one get one free promotions.

So with all these changes to the mobile landscape we thought we would ask both consumers and our own IT decision maker panel to find out if they plan to swap one device for another. (See today's press release on the findings)

What we found was that businesses were more open to swapping out one computing platform for another than consumers.  The biggest drivers for making the switch were not surprisingly cost and form factor, but what was a bit surprising was that close to twice as many IT decision makers than consumers are willing to ditch the notebook for a netbook the next time around. The netbook, which started out as a low cost computer targeted at consumers is seeing new life and new opportunity in the B2B market. 

There has been a lot of hype around the iPad killing the netbook, but netbooks will see new life in the B2B market as long as manufactures research, recognize and capitalize on these shifts in the mobile market.

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels.

The iPad Will Kill the Netbook, Media Hype or Real Threat?

There is a lot of hype around the iPad, as with any new Apple product entering the market. There are some that say the iPad will kill the netbook market. Recent articles in InfoWorld and PC World both make the case that netbooks have just been given their death sentence or as Galen Gruman says in his article, "Apple has just fired the death shot at the netbook".  I say not so fast....

Our recent CMB tech Pulse research paints a very different picture.  In April we asked over 1200 consumers about their device preferences, which we will be talking more about in a press release next week. But it is worth noting that we saw 23% of netbooks users will replace their netbook with a tablet and 22% of tablet users will replace their tablet with a netbook. So at this point I say that's more hype, the reality of the entire netbook market going away is just not happening.  Yet the iPad is threat, something to be careful of something to take note of in the consumer market.  After all, netbooks entered the market as a consumer product and the iPad has certainly put a damper on the consumer netbook hype, but netbooks are making inroads to the B2B market. So I don't think the iPad or any tablet for that matter will kill the netbook market all together, but maybe it's time for netbook manufacturers to shift their focus the B2B market.

Personally, I think the iPad is more likely to kill the Kindle and other eBook readers and smartphones will have more of an impact on netbooks than the iPad. There's no doubt that the mobile computing landscape is changing, and we can always count on Apple to drive innovation and to shake things up.

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels.

Netbook Summit Round Up- Lots of Changes on the Horizon

CMB was a sponsor of the First Annual Netbook Summit conference held in Burlingame, CA last week. As part of the conference I was on three panels covering future device directions, platform substitution and competitive developments. In listening to the panel discussions and talking with other industry insiders there was unanimous consensus that there is a future for netbooks, but that their dimensions, uses and features will evolve.  Netbooks will also have to share the spotlight with tablets and smartphones for a share of wallet for both business and consumer users.

Indeed more than one analyst predicted the availability of the $100 tablet in the next year ushering in a whole new pricing threshold for client devices.

One thing everyone agreed on was that there will be greater fragmentation of the client device market. Intel will slowly lose its monopoly on netbook processors to Nvidia and AMD and alternatives to Windows 7 will drive new paradigms for the user experience. In a nutshell, look for more choice, lower prices and expanded use as devices, applications and operating systems are matched more precisely to specific user needs.

Download Don's presentation on Netbooks in the B2B Market

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels.

Consumerization of IT, 18-24 Year Olds Lead the Charge

Last week I blogged about what consumers had to say about their electronics spending and looked specifically at netbooks. This week I want to share some other interesting findings- consumer perceptions and usage of technology and how this plays into the growing trend of the consumerization of IT.

We continue to see the lines between consumer technology and business technology become more and more blended.  Of the 1200+ US consumers we surveyed, 29% believed that innovation in business will be led by consumer technologies. This underscores the rapid pace at which consumer technology is progressing and the increasing rate at which people bring it into all aspects of their lives to increase productivity.  We have been watching the trend of consumerization of IT gain more momentum over the last few years. More and more consumers are using technology to increase productivity in their personal lives and have increased expectations for technology to do the same in their professional lives.  This is especially true for 18-24 year olds who tend to be more excited about technology in general.

Even in a down economy 36% of 18 to 24 year olds say they are spending the same amount or more on technology over the last 12 months and are about 10 percentage points higher on excitement for almost all categories (4G adoption, 3DTV, etc).  While this is not shocking, their impact as they join the workforce could have significant implications for technology providers and employers in general.  Expectations and requirements for company supplied devices will likely be higher and the ability for young people to use their own devices may turn into a competitive advantage.   

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels.

 

CMB Research Takes a Closer Look at Electronics Spending

Next week I am speaking on several panels at the Netbook Summit in San Francisco. To prepare for the event I wanted to take another look at how consumer spending has changed in recent months and the impact of those changes on the purchase of electronics, specifically netbooks. We launched a CMB Consumer Pulse study and looked at the responses of 1200 US consumers ages 18-65.

Consumers say they have permanently changed their spending habits and are looking for lower cost alternatives. They also report they may never go back to their old spending habits; this will be an interesting trend to watch.  Roughly 50% of consumers are continuing to spend on electronics, but spending less and 19% have moved to lower cost alternatives.

Netbooks have achieved fast penetration in the consumer market. The question now is do they get stuck at 10% penetration and be overtaken by tablets as the next big device. Widespread device penetration is usually measured in the 40% to 50% range. Price and cost considerations are still drivers of the netbook market, however, 23% of netbook users say they will substitute for tablets and another 24% for notebooks for their next purchase.  Indeed, netbooks have the lowest repurchase rate of all devices.  Expect netbook sales to remain strong, but do not expect to see the historical year over year growth rates. An improving economy may work against their value proposition, given that price and generic capability like connectivity options are driving adoption.

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels.

Market Research Shows Most Consumers Won't Make The Switch

Once again my hopes and dreams for an iPhone have been squashed right along with the rumor that Verizon was getting the iPhone by the end of the year.  Mashable reported this week that AT&T has the iPhone exclusively until 2012. This isn't the first time my hopes have been dashed and I am debating joining the Android camp, which Marketing Daily reports is taking a bite out of Apple .

The NPD Group reports Google's Android OS edged out Apple's OS for the number-two position behind RIM in the first quarter of 2010. So I'm not the only one getting tired of the wait, and quite honestly I'm not sure what I'm waiting for anyway. After all, Droid Does have a lot of apps.

So, are consumers willing to switch carriers to get the mobile device they want? Recently, in our online Consumer Pulse we asked over 1500 consumers "How likely is it that you will switch carriers to access a device that your current carrier does not offer?"  While 72% said a switch is not likely, 28% reported they are either moderately or very likely to switch carriers for a specific device. Personally, I think I fall into the 72% camp. And in a different set of research we conducted in March using Toluna's phone-based omnibus we found only 13% of the 1004 US consumers surveyed said they would pay the fees related to switching carriers to get a specific mobile device. 

I don't think I'm willing to switch carriers. Maybe all the Droid Does marketing is working. I'm becoming convinced that I can do everything I want with a Droid that I could have done with an iPhone.

What do you think? Would you switch carriers for a specific mobile device?

Posted by Kristen Garvey.  Kristen is CMB's Director of Communications, a mother of two, and loves mobile technology.

HP's Acquisition Of Palm Isn't About Depth But Breadth

Not only does HP continue to acquire companies whose time is running out, but they are also extending their product lines to offer their customers more. 3Com may not have been the first networking company one would choose to acquire, but it did fill in gaps from HP's Procurve business. Similarly, Palm complements HP's iPaq phone line (new OS, touch screen technology, etc). What HP is showing is that an acquisition does not have to be the best, but rather it needs to provide more scope within a growing market and new technology platforms from which they can build new products.

In fact, the HP acquisition may not be as much about the smartphone business as it is about other mobile devices like netbooks and tablets.  There's no question about the importance of developing Web OS applications for all mobile devices. (See WSJ article for acquisition analysis). 

In a recent Bloomberg News interview with Michael Cuggino, portfolio manager for The Permanent Portfolio based in San Francisco, he talks about the Palm acquisition being about much more than the smartphone business and thinks maybe HP can "unlock the real value of the Web OS and fill a hole in their product line." Cuggino also talks about the importance becoming an integrated entity and the breadth of product lines...

In the mobile device space it is becoming table stakes to have a full product line that spans device types, user interfaces and operating systems. The importance of having a robust product line is consistent with technology research CMB recently conducted on consumer electronic device preference and usage. One of the things we asked among a group of approximately 700 US consumers was which device would you replace your current device with when you make a new purchase.

What we found is that there is a fair amount of substitution especially between netbooks and notebooks and tablets and netbooks. Not surprisingly, most smartphone users would likely replace their existing smartphones with a new smartphone, but we did see that 15% will say they will replace their smartphone with either a tablet or netbook.

These shifts underscore the importance of a vendor having a full line of products to maintain overall device market share as consumers switch from one device to another. What HP has recognized is that it is not as critical what the brand is that they acquired, but rather having a new brand in the first place that offers consumers a viable choice when they do decide to switch.

I will presenting more of these findings at the Netbook Summit taking place May 24^th- 25^th in San Francisco. We hope to see you there!

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels.

Using Mobile Technology to Better Serve and Connect with Customers

Posted originally on our CMB Research Rants blog

In this week's issue of Marketing News, Lightspeed Research released a really interesting study on Americans' usage and attitude towards mobile phones and mobile phone marketing. The study of close to 1200 US consumers shows 54% of smartphone owners say they have downloaded a mobile app in the last 6 months. And over 40% say they access the internet at least once per day.

The fact is consumers are using mobile devices for so much more we ever imagined and in a wider array of both functional and mindless ways. Open up Shazam and you can identify and buy the song you are listening on the radio on your Blackberry or iPhone.  Scan the bar code at Target and see if you can get a better deal somewhere else.  Apple (and now Droid) got it right when they said "there's an app for that". Just like we are now "trained" to turn to the internet for information, we are not far from regularly turning to our phone to do the same.

As mobile devices change consumer behaviors and expectations, more and more businesses are tapping into this marketing opportunity and connecting with customers to provide a better service experience and the convenience mobile technology offers.

Along with retail/e-commerce, banking has been one of the most affected industries that we serve. Jim Garrity, CMB's managing director of our financial practice, just wrote a fantastic article in the May issue of ABA Bank Marketing that talks about how smaller regional banks are using mobile apps like ATM locators to better serve their customers and better compete with the big guys. It used to be the larger banks had the competitive advantage because of the sheer convenience their vast ATM networks offered.

Smaller community banks then joined larger ATM networks to better compete by offering more ATM's in more locations, but customers often could not find them or could not easily identify which ATMS were in their network. Now smaller community banks are using mobile technology to help customers find ATM's in their network all from the convenience of their mobile device. Good examples are MyATM and Allpoint's mobile app called Go-Everywhere which helps customers find over 37,000 surcharge-free ATMs.

Using mobile apps has leveled the playing field and allows the community banks to better compete and requires bigger banks to respect their smaller competitors. Read more of Jim's article ATM Locators: Your Lead-in To Full Mobile in the May issue of ABA Bank Marketing. 

Where is your opportunity in the mobile market? Surely "there's an app for that"!

Also, check out Josh Mendelsohn's post 1 Topic, 5 Blogs: Mobile Surveys in Market Research to read more about using mobile technology as a research tool.

Posted by Kristen Garvey.  Kristen is CMB's Director of Communications, a mother of two, and loves mobile technology

Using Primary Market Research to Evaluate B2B Social Media Strategies

We recently conducted research on social media to look at why people become fans and followers of certain brands. We wanted to get a high level view of why people become a fan/follower. Our gut (and some of our own personal experience) told us that many people that become a fan or follower do so because they are already customers of that brand. For the most part our instinct was right. Our research found 49% of people who become Facebook fans do so because they are already a customer.  The really interesting part is we found over half of those people who are engaged stated that they are more likely to buy and recommend that brand since becoming a fan/follower.   It's clear that using social media as an engagement strategy helps cut through the online clutter and keeps brands "top of mind".

This makes a lot of sense for consumer companies, but is a social media engagement strategy right for harder to reach B2B audiences? The short answer is yes, but not without digging deeper to learn more about who you are trying to reach and where they "live" online.  There are so many social media outlets available today and they are not all created equal and they're not a "one size fits all" answer. Truly using social media as an engagement strategy may not take a lot of money, but it does take a lot of time. So the best place to start is prioritizing who you want to engage with and then look for the best places to find them and figure out how they want to be engaged in the various social media outlets available.

Recently we worked with AMD, a leading processor company to re-evaluate their social media effectiveness and develop a more optimized and targeted strategy to reach their widely disparate target audiences. It was important to start by looking at each of those targets and then systematically evaluate the true extent and impact of social media usage on each of those audiences.

Audience: We used separate research modules for each unique target audience, spanning from extreme B2B to consumer segments

Recruiting: We did not use social media to recruit research participants as to prevent sampling bias

Techniques: Both qualitative/open-ended and quantitative research

This approach really allowed AMD to refine and optimize their social media content and tactics based on the different behaviors of each target audience. Learn more about this AMD case study at the Social Media and Community 2.0 Strategies event coming to Boston May 3-5.

Understanding B2B Social Media:  An AMD Case Study

CMB's Chris Neal and AMD's Georgeanna Liu will presenting a case study of how CMB helped AMD better understand and capitalize on social media to drive their business. In this session, we'll explain the steps that AMD took to review and refine their social media strategy focusing on very specific target audiences. 

 

Read more about social media
by downloading our report: 
"Why Social Media Matters for Your Business."

 

 

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Tech Pulse: Are Enterprise Software Companies a Thing of the Past?

 

An article recently in Information Week caught my interest. Titled Global CIO: Oracle, SAP, And The End Of Enterprise Software Companies, it underscores the shift in thinking from the enterprise line of business and from IT executives on all enterprise applications. I would argue that heavy lift application implementation is increasingly becoming an anomaly due to difficult implementation and high investment cost.  To quote Bob Evans from Information Week in the article:  "It also means the days of big, blunt, mega-purchases of software are for the most part behind us--and for SAP and Oracle to continue to grow, they therefore need to step aggressively into new revenue streams other than software to keep investors happy." 

The recession has fundamentally and forever changed the way enterprises will acquire applications and for that matter many other parts of their IT infrastructure. What has saved the server business in the near term is the dramatic ten-fold increase in cost per processing unit productivity due to lower server prices, virtualization and improved processing power.  Although, I think the long term outlook holds marginal upside for on premise servers given the rapid deployment of in-house and cloud computing.  

No cost savings breakthroughs in delivery have taken place or are foreseen for legacy enterprise applications.  Conversely, web based, cloud delivered applications have a strong value proposition based on cost savings and administration efficiencies. The following chart summarizes the relative position of specific vendors based on recent research which CMB did with enterprise IT managers.  Not surprisingly, some of the newer entrants like Google and Salesforce.com have a place in the more favorable quadrant.

This shift to applications through a services delivery model and the increasingly important role of implementation and management services through integrators, managed service providers and VARs will take place faster not slower than people think. A sea change among IT executives has already happened on acquisition and management of applications. The great news for application providers is that their core business benefit and functionality can be provided through these new delivery platforms and the vendors can still profit and thrive by adopting these new variable cost business models. The only question is which legacy companies can take the lead to acquire first mover status? In my mind the jury is still out.

To learn more download the full CMB Tech Pulse Report: Shifts are Starting in the Applications Status Quo

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels.