Sunday’s episode of 60 Minutes contained this interchange regarding product management at Apple:
Charlie Rose: Is there danger of one product cannibalizing the other product?
Phil Schiller: It's not a danger, it's almost by design. You need each of these products to try to fight for their space, their time with you. The iPhone has to become so great that you don't know why you want an iPad. The iPad has to be so great that you don't know why you why you want a notebook. The notebook has to be so great, you don't know why you want a desktop. Each one's job is to compete with the other ones.
I couldn’t agree more. When you make a range of products that live in the same, similar, or overlapping space, you shouldn’t really care which one the customer buys. You want them to buy the right one for them, which means that these products must be rationalized to the point where they compete at the edges of each other, and even sometimes against one another. May the best product for the customer win, but let the customer choose which one of your products. Get the customer the first time, and you’re likely to get them again when their needs expand or change.
Consider Nikon’s product line of cameras: Coolpix, Nikon 1, DX DSLR, FX DSLR. Nikon carefully does the opposite of Apple: Nikon targets different customers for these devices and then carefully makes sure that the products don’t compete with each other. Really? Isn’t a camera a camera? Wouldn’t I want whatever camera I pick from Nikon to be as good as it can be? Why is it that Coolpix have one design style and feature set, but the Nikon 1 another? Why must I study the manual in detail every time I cross lines in Nikon’s products? Why does Product A feel completely different than Product B, C, D, E, and F? Why is the Nikon 1 the only product with Motion Snapshot if Motion Snapshot is a camera feature that customers might want? Talk about restricted targeting and keeping your products from competing with one another.
Simple: it’s because Nikon first identifies a target customer and then pens them into very narrow and extremely arbitrary product definitions. They don’t design to customer problem solving (not even sure they talk to the customers they target), they design to what they think is a “different" customer, which isn’t the same thing. The customer doesn’t get to decide where they are in the mix of products because of this, and the customer better be careful that they don’t miss when deciding which category is right for them, as important things are missing in some of the categories (I’m looking at you, Nikon 1! And lenses in DX).
Meanwhile, there’s that “great” part of Schiller’s quote. Are Coolpix truly “great”? Great enough that you might not need a Nikon 1? Nikon comes close to this with the DX versus FX DSLRs. I’d argue that the D7200 is a great camera that might make it so you don’t know why you’d want an FX one. If only Nikon would produce a full line of DX lenses, that is. I write often about Nikon’s non-rational product line, and what Schiller points to is a very rationalized product line from bottom to top. Apple doesn’t care where in the line a customer buys, they only care that the product solved the customers problem and became an Apple customer.
What Apple shows in its products is that there is a strong, smart, stable, sophisticated hand at the helm of its entire hardware product line (wish I could say that about their software ;~). Both the external design and internal design teams seem to be living in the same thinking space, and Schiller’s comment is alive in all of them. What Nikon shows in its products is that there are multiple teams of smart people designing individual elements and competing with each other while targeting different customers. The more senior staff tends to be on the higher end products, and guess what, they’re protective of their turf. Moreover, the lens and camera design teams don’t seem to be terribly great at interaction, either, nor was there a clear hand pushing both teams toward the same goals (a great example of that is that all those recent f/1.8 primes are all G, not E lenses, at a time when every lens should be E).
Funny thing is, the latest Flickr study of camera use showed an interesting side of this same question: Nikon image posters had a fairly strong propensity to owning a Canon camera, too. Why? Because Nikon isn’t great at all cameras, silly. So if you wanted a great compact camera and a great DSLR, you might have a Canon G and a Nikon FX (personally I have Panasonic/Sony compacts and Nikon DSLRs, but that’s just a different solution to the same problem: Nikon doesn’t make great cameras from small to large. They do make cameras from small to large, just that they’re not all great.
Moreover, there’s the ecosystem thing. For Apple, this has worked marvelously: because I have an iPhone I’m not likely to buy an Android tablet if I also need a tablet, nor a Windows PC if I need a computer. The ecosystem that Apple’s built around all these great products means I don’t have to relearn (much), can use similar apps, can share across products easily, and so on. While it doesn’t come into my decision making, my iPhone, iPad, and laptop all look like they belong together.
Product management should be just that, management. Nikon is still using an old style of product management, Apple (and others) have moved onto more sophisticated, nuanced, and customer-considered management of products. Apple’s results ought to have a lot of companies reconsidering how they work on products and how they’re managed.
Put simply, Nikon has no Schiller, let alone Ives or Jobs.
This all brings up a bigger issue: marketing. Apple’s marketing is easier to do. While there is wide overlap between their products, there are also some very clear distinctions. An iPad Pro doesn’t solve all the customer problems a MacBook 12” does. Likewise, a MacBook 12” doesn’t solve all the customer problems an iPad Pro does. Marketing simply becomes a lot about identifying those differences to the customer. (One reason why the Pencil is so prominent in the iPad Pro offering, by the way. I let my mom use my iPad Pro and Pencil for the first time last night, and she promptly drew an excellent rendering of something she wants to paint. Try that on a MacBook 12” ;~).
Compare that to the way the Japanese makers tried to do products and marketing recently (and mostly failed): if you’re a woman, buy only this camera (and choose it in your favorite color; well, at least one of the few colors that our consultants said were “hot” this year). Don’t buy the other cameras we’ve been making. I predicted that this would fail, and it mostly did (though in some parts of the world there was enough response to push a bit of volume that wouldn’t have been there, but it was temporal in nature).
We’re a couple of days away from Christmas, and deep into the biggest buying season for cameras. Let’s say you need a great new camera. Does Nikon make one for you? Sure, if you’re in the market for something like a D810, maybe a D7200. Looking for a shirt pocket camera? Sorry, look elsewhere. Looking for an all-in-one compact type camera. Sorry look elsewhere, though if you don’t mind shooting JPEGs, maybe try the P900. Looking for a small interchangeable lens camera? Well, Nikon has one, but is it great? Indeed, is it as great as other choices?
The bad news is that Nikon has dissembled into this very poor product positioning scheme, and now is in a declining market where the not-so-great products just have terrible sales that reinforce the downward trend. The good news is that such a position is easily changed. All it takes is a strong, smart, stable, sophisticated hand at the helm. And the helm has to be connected to the engine and the rudder ;~).