You Don't Kill Incumbents, You Leapfrog Them or You Lose

By Trevor Gilbert , written on June 21, 2012

From The News Desk

“The killer (or be killed) feature of that new Microsoft Surface for Windows RT is its keyboard.” -Mat Honan, Gizmodo
“There can be little question that the Xoom is certainly a contender for the hearts and minds of potential tablet buyers in the market.” -Joshua Topolsky, Engadget
Despite the world’s obsession with having products kill each other like this is some grand gladiatorial display of blood, gore, and splintered silicon chips, the idea that one product will “kill” another is plain wrong. Products very rarely just fall over and “die.”

Sure, there are products like the iPhone that come along once every five years and kill off entire product categories. But that’s the exception to the rule. More common is that a competitor is tasked with killing the market leader, but instead doesn’t even meet the bar. There’s that one feature that people extol as “killer”, but it doesn’t end up killing anything, because there are too many other holes in the product.

Unless a company redefines a market, like the iPhone, or leapfrogs the competition technologically like the 2011 MacBook Air, or Google’s PageRank algorithm, the incumbents will survive. So it is with the “iPad killers” and so it is with the proclamations of impending death for nearly every market leader.

The main reason an entry-level product rarely kills the market leader is that the leader has more resources, has the momentum, has the brand, and has the public’s mind-share. It takes a truly stellar knockout punch to accomplish that. It takes ten killer features, not just one. Anything less, and the threat is more of an inconvenience than anything else.

For example, take push notifications. For years, Apple had horrible, wretched push notifications for iOS, while Google had a seamless and enjoyable notifications experience on Android. Apple didn’t see it as a big deal, though, until people started to choose Android over iOS because of notifications. At that point, Apple buckled down and did something about it. Feature disparity? Resolved.

Looking at Surface, people seem to think that the keyboard/Smart Cover combination is truly revolutionary and will potentially “kill” the tablet competition. It’s too soon to tell if that’s true or not, but if history is any guide, it won’t be.

It’s tedious to say that history repeats itself, but it’s true. If the Surface keyboard becomes too important, Apple will meet Microsoft in the ring and take on the competition. Whether it’s with a new interaction paradigm, or with a Smart Cover Pro that features a keyboard. If it starts to hurt Apple, Apple isn’t going to roll over and die, it’s going to shoot back. I’m not the only one that thinks this either.

That would be bad enough news for an entry level competitor in the market, but worse still is that while Apple is meeting them in the ring of keyboard-induced death, Apple is also pushing the bar even higher. This is the same bar that Microsoft and Google will need to meet every year, without fail. It’s the realities of an established, wealthy, popular incumbent.

This isn’t the first time Microsoft has had a problem meeting Apple in an established market. When Apple released the iPod, Microsoft released the Zune much later to the market. The end result? Microsoft cancelling the Zune project. That’s one example, but the iPad market is already much bigger and much more revolutionary than the iPod market even was.

This isn’t all in favor of Apple, though, because Apple makes the same mistakes. Apple hasn’t met Gmail in terms of usability or features, and so it isn’t the product leader in the email space. Ping is famously a failure, because it didn’t leapfrog any social network.

You see, it is very hard to beat the leader. There are tales of startups taking on giants and winning, but more often than not, they fail. Looking at what Ben Horowitz said at last night’s PandoMonthly event, “The winning product eventually becomes the best product, because you can afford more resources for it.”

Even if the keyboard on the Surface steals sales from Apple, and even if Google releases something amazing at I/O next week to take on the iPad, it takes a knockout punch to make any meaningful progress. That’s not to say people shouldn’t compete, but let’s all temper our expectations a little bit. The iPad isn’t going to be occupying a grave anytime soon.

[Illustration by Hallie Bateman]