Change2010_03 Customer-driven innovation

Case study 1 of 3: cross-industry patterns

In this fourth article, patterns within the consumer electronic industry, used as a case study on applying patterns across industries; therefore, it is assumed that you read the previous articles.

Why consumer electronics? Because it seems to take increasing space on our newspapers- as if choosing a mobile phone or netbook were to be a critical issue for our well-being; therefore, a case using to see how patterns delivered through technology are influencing our everyday life.

Since at least late 1980s, replacing is cheaper than repairing: ask to repair your digital camera or the screen of your netbook, and you will be asked amounts often exceeding the replacement cost- with a newer and better model.

And what happens to the old one? It is dumped somewhere- often in developing countries, while all those “recycling” symbol on boxes that make us feel eco-friendly forget to say where and how it will be recycled.

Another interesting shift has been the move from innovative products, such as the late 1980s first portable CDs were, to much faster innovation based on a shared platform (e..g iPhone, Android, PCs).

It is basically a matter of converting physical products into information, while moving the consumer electronics industry from the “heroic” phase, to a maturing industry based on standards, economies of scale, and innovation through product perception more than product content.

If we acknowledge the need to enable raising the global living standard, we need a different model, allowing a more efficient use of resources.

Evolving relationship

Our consumer electronics industry is not driven by need, but by the creation of a social need to conform with innovation, taking a leaf from the fashion industry.

The side-effect of consolidating and converging has been the creation of a consumer awareness built not on “brands”, but on “differentiations”.

If you limit the options, you are focusing on creating consensus, not choice- if you want, something closer to build a “loyal” or “faithful” following, a cult: but a Consumer 3.0 would instead want to take control of the product.

In the 1950s, few people would have “customized” their car- today, anybody tries to “differentiate” the product that (s)he buys, to make it unique.

Consolidating on few basic “platforms”, where the difference is the brand+services, created a certain hubris (e.g. the mismanagement of the iPhone antenna and privacy issues), balanced by the re-emergence of “common man” historical tool: doubt.

Another puzzling divergence is the concept of “ownership”: consumer electronics companies such as Apple as constantly trying to force a model coming from the software industry, and they can “improve” your product without your consent (nowadays phones and computers, but, with IPv6, also “intelligent” fridges or ovens).

There are still pockets of loyal buyers, who buy anything that comes out of a certain brand (a walking advertisement), but the arrogance of the suppliers generated an healthy skepticism also between their number: witness the eventual “push” from Consumers 3.0 that forced Apple to change some rules concerning the iPhone.

Two visions, walking wallets

The consumer electronics industry adopted standardization: also if you usually do not see it, companies are building their products using off-the-shelf components, from memory chips to the humble standardized screw: and when you move to Lego-style bricks, you enable anybody to innovate.

Diverging patterns: between the control-freak approach adopted by dominant suppliers, enabled by software (i.e. the willingness to know not only what you buy, but constantly be updated on how you use it), and the consumers’ request to take control, now that they can make their mass-produced products a unique blend of product and services.

Also the century-old radio is shifting toward a platform and a “software”- and why adopting patterns from the software industry should be reserved only to the consumer electronics producers?

Both consumers and regulators could ask the same access, e.g. by asking the definition of standards that would allow eventually a free interconnection of components (“interoperability”), as larger consumers (companies, institutions) already do with software.

While their suppliers dream of replicating the old days when you bought everything from one suppliers (say, IBM), this is not the case- and why, in a platform-oriented world, should the new, evolved consumers, accept anything less?

A last pattern that converting products into services could introduce: any new product could be composed by modules that the consumer can replace without involving the supplier- also enabling a more civilized way of disposing and recycling old products, a way involving following the life of the product, maybe with world-wide disposal rules.

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