Battle For Mobile Market Share and Where Microsoft Went Wrong; A Tough Lesson In Branding

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If you aren’t thinking about how to find and engage customers on mobile devices and tablets yet, time is running out. This morning I saw a discussion about a Microsoft Memo from 1993 predicting… “The power of having the worlds information – and people – on line at any time is too compelling to resist.” The author of this memo, Microsoft;s CTO, Nathan P. Myhrvold, predicted that while desktops will stick around for a long time, eventually mobile and tablet devices will dominate, and the winner of that game will be the people who own the software standards for the Information Highway devices. This was over 19 years ago. So, I guess it begs the question why android controls 52% of the mobile operating system market, and apple is a close second…with Microsoft and others all but ignored. There is a very important lesson here about evolution, branding, and how massive brands let their ego lead them to oblivion (i.e. Kodak). I learned most of what I know about branding from Al and Laura Ries and will probably cite them often on my blog. They have studied thousands of brands that both succeeded, continue to succeed and failed, and have figured out the true secret to branding success. In Al Ries’s words, “To Build a Brand, You Narrow the Focus.” or Laura Ries’s Quote, “Without a Focus, It’s Almost Impossible To Build a Brand.” I highly recommend you read all of their books and take their advice very seriously if you want to build a brand that lasts. After All, Ad Age called Al Ries and Jack Trout’s book positioning one of the most important marketing books every written. I Agree. The short of it is, when it comes to mobile operating systems, the windows brand doesn’t translate. It already stands for computer operating system, and mobile and tablet devices are a diffferent category. Apple was smart about not using their OSX brands for mobile devices, but it still can’t compete with Android, a completely new brand that is associated only with mobile operating systems. If you ask someone what phone they have, they usually say either, “Android or Apple.” Apple however already stands for something, so while they won the device game with Iphone being the most recognized hardware/smartphone..But the operating system is being won by Google with their Android brand.

The truth is, the memo from the Microsoft CTO was nothing new to people who understand evolution and branding. Product Categories diverge into new More Focused categories that branch off of the original category. For example, A desktop diverged into a laptop which basically was a mobile version with MORE FOCUSED functionality. The netbook basically flopped because it was just a laptop but didn’t really meet the needs of the mobile market. The tablet and the Smartphone are both great examples of the laptop diverging into new focused categories, which creates opportunity for new branding opportunities.

Big brand executives typically assume that their brand equity can boost them in any category they approach. What they fail to realize is that every new category they approach with a brand that already stands for something, they are both diluting the messaging of the original brand (the opposite of focusing it.) and they are also entering a category with a brand that can never own it. Kodak invented the digital camera, yet nikon owns the category. Kodak thought their brand stood for Cameras, but it really stood for Film Cameras. Digital Cameras was a new diverging category, and Kodak would probably own the category if they just started a new brand name for the new category.

Just to be clear, you can leverage all your relationships and resources to build the new brand, but don’t use your existing brand if you want to last long term. Just look at Microsoft’s strongest product right now, XBox, a completely unique brand name which no one really associates with Microsoft. Why do they dominate that market? Why doesn’t Nintendo own it, considering they were in the space for long before Microsoft? Because every device they launch, they launch under their Brand Name Nintendo. Even the Sony Playstation is struggling because they tied the name Sony to it, instead of just playstation.

Let’s examine what a brand really is, and you will easily see why this is really common sense. Branding is the battle for mind share. To own a category in peoples minds. We are dealing with Human Beings, and Human perception. The mind quite frankly needs a rack to hang its hat on. When you use a name, it needs to associate that name with a category, using a visual hammer like a logo, but people need something completely unique to associate your brand with, or they cant tie it to a category. People also don’t think in terms of names or brands, but in terms of categories. So, think about a Search Engine, odds are your mind associates Search Engine with Google, to the point of you saying, “Just Google It.” Why did Google win the Search engine game? Because they were the most focused brand on search. Everyone else either used an existing brand, I.E. Microsoft Live or tried to be more than just a search engine, I.e. Yahoo and AOL.

Once your mind associates a brand with a category, it’s like wet cement. It basically is stuck in place, and the only thing that can uproot it is if the brand tries to be more than the super focused message they currently are. So, Google is gambling that the web experience is going to converge (the opposite of evolution) and that social and search are going to be fully integrated. They are using their power and massive user base to force this combined experience called Google+… problem is, when I want social interaction, I go to Facebook. When I want to voice my opinion to the world, I go to Twitter, when I want to express myself with images I go to Instagram… When I want to share photos I Find I go to Pinterest. When I want to find something online, I go to google… Converging Search and Social cannot work for one very simple reason. Human Perception sees two combined categories as a compromise on both sides. We might want a camera on our phones, but if we like taking photos, odds are we also have a Camera? why? because we assume that a camera is Better and that a Camera Phone is just a bandaid for when you don’t have a camera handy. We assume that we are compromising on both quality of the phone and on the quality of the camera.

However, When a Category and Brand is FOCUSED, we can easily associate that brand with that category, and can believe it is better. Ever wonder why the TV DVD or VCR combo didn’t make it, but people have both devices… We assume that a TV that is just a TV is better quality because they can focus on what they do best… making a TV. and the same goes for the DVD player. People see Converging Technology as sub par, not as good as the focused category by itself.

The only exception to this rule is in cases of EXTREME CONVENIENCE, where the convenience is preferable to us over the best quality. So, we will use a camera phone because it’s convenient, but a TV DVD combo is not more convenient that having both a TV and a DVD, so we would rather buy what we PERCEIVE To be better, which is the More Focused Item.

These are laws of nature, laws of evolution, and laws of how people think. No Ego or Dominant Brand can ever change these laws, and like Robert Ringer Says,“Reality Exists, You can obey it’s laws to your benefit or ignore it’s laws to your detriment.”

Like many big brands, they forget their humble beginnings and they think they can win a new category with an old brand. They end up diluting their brand, and opening the market up to a new brand that is prepared to position themselves opposite the incumbent brand. Just look at the Car Rental Market. Hertz Owned it. Than Avis Did, Now Enterprise Does…Owning First Place Does not Give You a Pass on The Laws of Nature… So, I don’t know why Microsoft didn’t heed these messages for 16 years, especially because they have hired branding consultants like Ries and Ries, and have built unique brands… I guess they think Windows Is All Operating Systems… They Are Wrong, and Unless They Launch a Tablet OS under a new brand, they will always trail Android and Apple leading the Pack.

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About David Melamed

David Melamed is the Founder of Tenfold Traffic, a search and content marketing agency with over $50,000,000 of paid search experience and battle tested results in content development, premium content promotion and distribution, Link Profile Analysis, Multinational/Multilingual PPC and SEO, and Direct Response Copywriting.

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