Appealing to vanity instead of needs
Last week I read an article on PC World that explained how Moore’s Law had pushed computers past the point of being “good enough” for the average user, thereby rendering it pointless for them to upgrade. Sure, a new fast machine is always nice, but for the average person using a PC to access the Internet and do some light typing, a solid machine bought in 2005 probably does the job just fine. But beyond PCs, I started to wonder if all microprocessor powered hardware was doomed to reaching almost immediate market maturity.Think about the difference between a 1978 Apple II versus a 1982 Apple II Plus and compare that to the difference between a 2008 Google G1 and a 2012 Galaxy S3. The improvement between the G1 and the S3 is much greater than the improvement between the Apple II and II Plus. By comparison, the current rate of hardware development is almost vertical.
Furthermore, assuming 1978 was the start of the home PC era, it took the PC over 25 years to reach the point of being “good enough.” If we mark the 1999 launch of the Blackberry as the start of the smart phone era, and the iPhone 4 as the point where smart phones were good enough for the average user, we see it only took smart phones 11 years. If we look at the progression since the 2007 launch of the original iPhone, we see that the recent rate of performance improvements for both iOS and Android devices have accelerated and a new Galaxy S3/S4 or iPhone 5 has already far exceeded the needs of the average user.
This rate of advancement has put hardware companies in a situation where their products reach a point of maximum usefulness within a matter of years instead of decades. Instead of enjoying a long run where people see a significant useful improvement every time they buy the latest version, people will likely find their existing hardware quite serviceable for their requirements. The end result is hardware manufacturers are then stuck in a position where average customers don’t see any need to upgrade.
The solution to this problem lies with appealing to our vanity instead of our needs. Consider the automobile industry as an example. Most car magazines agree that we’ve reached a point where there really aren’t anymore bad cars. There are better or worse cars in relation to each other of course, but you’d be hard pressed to buy a car today that isn’t reasonably comfortable and won’t last 15 years with proper maintenance. This puts the auto industry between a rock and a hard place. They need you to buy a new car more often, but the entire industry is making cars that last 15 years, thereby rendering the practical reasons for upgrading sooner unnecessary.
The answer of course is obvious. Car companies regularly roll out new models that make us want to upgrade for vanity reasons. The auto industry is lucky in that their product is public facing. We essentially use our cars as an identifier of who we are and, despite there being no actual need to upgrade after 3 to 5 years, many people do so simply because they don’t want to be seen driving an old car.
The challenge for hardware manufacturers is to position their products as a public facing identifier. Smart phone makers are fortunate in this regard. Our phones are by far our most public technology device and they have evolved into being a fashion statement. Think about how we make fun of people who still use Blackberries. On the other hand, PCs are largely kept at home or in the office. The average person doesn’t display their PC in public and as long as it works okay at home, people will see little reason to upgrade.
Most industries enjoy a long period of steady improvement where people buy upgrades because it provides them tangible differences in performance. Returning to the auto industry as an example, cars were unreliable well into the 1970s -- lumbering, un-air conditioned, gas guzzling beasts. When you drove a model that was five years newer, the differences were clear. Even ignoring the fashion and status symbol elements of automobiles, the car industry was able to sell new models based on practical, necessary improvements for at least 75 years.
But for microprocessor powered hardware makers today, Moore’s Law has ensured that even new developments like the smart phone will exceed the average customer’s needs in a short period of time. Instead of looking forward to 75 years, or even 25 years, of improvements that can be sold to customers, hardware companies subject to Moore’s Law are doomed to reach maximum utility within 5 to 10 years of a new product category.
After that, they better figure out how to sell to our vanity.
[Illustration by Kyle Pellet for PandoDaily]