Michael Goodwin, Senior Partner for HTC, displays an HTC First cell phone wit the new Facebook interface at Facebook headquarters in Menlo Park, Calif., Thursday, April 4, 2013. The company says it is not building a phone or an operating system. Rather, Facebook is introducing a new experience for Android phones. The idea behind the new Home service is to bring content right to you, rather than require people to check apps on the device. Marcio Jose Sanchez/AP
It's been a harsh year for a number of the big names in consumer technology. While previous years have seen huge gadget successes such as Samsung’s Galaxy S3 or Apple’s iPad, 2013 seems more notable for fizzles than hits.
When even a company’s own brass refers to a product as an unripened tomato, for example, chances are good it’s a flop. Such was the case when David Eun, one of Samsung’s executive vice-presidents, recently tried to defend the Galaxy Gear smartwatch that reportedly sold fewer than 50,000 units this fall.
“What you want to be sure of is that you don’t pluck the green tomato too early, and you want to make sure that you don’t criticize a small green tomato for not being a big, red ripe tomato,” he told a conference in November.
It was perhaps as good a defense as could be mustered for what is likely to go down as the biggest gadget bust of 2013, a year that was filled with conspicuous flops.
The Gear was savaged by reviewers in just about every respect – it worked only in conjunction with Samsung’s Galaxy Note 3 phone; it didn’t do much beyond supplying notifications and text messages; it was big and bulky; and its $300 price was deemed high.
It wasn’t a green tomato that needed time to ripen, according to Silicon Valley technology analyst Rob Enderle, who favoured a different analogy: “It was a complete train wreck.”
The Gear was supposed to be the spearhead of the new wearable-computing wave, which began the year on a tsunami of hype. In 2013, pundits predicted, computing would flow off desktops and laptops, and even smartphones and tablets, to literally surround us with wearable high-tech gadgets.
Instead, the year saw a large number of lackluster product launches, both in wearables and in other categories. There was a relative dearth of big tech hits, as well as a sales slowdown – or “maturing” – in several established markets, including smartphones and tablets.
The record-breaking gadget adoption rates of the past three years have been replaced by moderate growth or slight declines in most product categories, including Apple’s hugely successful iPhones and iPads, according to Toronto-based consultancy Solutions Research Group. Demand is soft in everything from cameras, e-readers and GPS units, to game consoles and televisions.
Tech flops can often be attributed to three factors, according to SRG president KaanYigit. A new technology can be too far ahead of the curve, where consumers simply aren’t ready for it. It can be behind an alternative offered by competitors, missing its best window of opportunity. Or its timing may be right, but the execution isn’t.
New BlackBerry devices and Microsoft’s Surface tablets, both of which sold poorly this year, are excellent examples of the second two factors.
“Many times I think tech companies see the train wreck coming, but can't help themselves and still put out the product because of corporate ego,” Yigit says. “As well, it's too late to pull the plug by the time it's obvious that they may have a flop on their hands.”
Products also fail because they’re too focused on single functions or because they don’t support a holistic offering of related apps or digital content, which is incredibly important these days in an environment where everything is connected.
“Consumers don't buy gadgets, they buy experiences. They buy access to ecosystems, content and services they desire, they buy brands that deliver status, they buy social acceptance and recognition,” says Krista Napier, manager for mobile and consumer research at IDC Canada.
“If a company develops a device with all of this in mind from the start, I think there is less chance it will flop in the first place.”
Price isn’t always the determining factor, she adds, since premium devices from the likes of Apple and Samsung have indeed sold well. “Customers are willing to pay more for the experiences they are offering.”
All things considered, product flops are a multifaceted phenomenon. Here are some of the year’s biggest tech busts, besides the Galaxy Gear.
Officially released to the public in October 2012, it took some time before the full scope of the operating system’s failure became known. By spring of this year, it was clear that Microsoft’s Windows 8 – which featured a snazzy tile-oriented, touch-enabled interface that was completely different from prior experiences – was a giant turkey.
First-quarter computer shipments dropped 14 per cent from the previous year, according to IDC, which was almost twice as bad as what the tracking firm had expected. Worse still was the fact that the new operating system was originally expected to buoy PC sales, but it instead did the opposite.
The radical changes were simply too much for buyers, to the point where Microsoft was forced to revert to some older features – such as the prominent placement of a “Start” button – with its Windows 8.1 update this past October.
Similarly, Microsoft’s initial foray into tablets landed with a resounding thud. The Surface RT, released in October of last year, managed to sell fewer than a million units by the end of the winter, or a third of what the company had expected. The beefier Surface Pro, intended as a laptop replacement, sold just 400,000 in the month after its release in February. In contrast, Apple sold about 42 million iPads between October 2012 and the end of March 2013.
Microsoft’s tablets were generally criticized for being too big and heavy, with not enough battery life or app capabilities. The RT also didn’t run a full version of Windows, meaning that users couldn’t take advantage of all the programs available for the operating system.
“It had been crippled by the manufacturer, and that’s often the case with a failed product,” Enderle says. “Somebody brings out a product and is afraid it’s going to cannibalize something that’s more expensive, so they cripple it and it doesn’t sell.”
Also released in late 2012, Nintendo’s newest video game console spent this year plumbing new depths of failure. The Japanese company chose to focus on casual gamers rather than the hard-core market and has been paying the price ever since, with non-core gamers proving to be fickle buyers.
Not only did the hardware contribute to big losses at the company, it was also outsold during portions of the year by its older cousin, the Wii, which launched in 2006.
Third-party developers abandoned the new console – designers at EA Canada, for example, proclaimed the Wii U to be “crap” and Nintendo to be “walking dead.”
As if that wasn’t bad enough, the Wii U is now facing additional competition from new Sony and Microsoft consoles, the recently released PlayStation 4 and Xbox One, respectively. There simply wasn’t any good news for Nintendo in 2013, and it’s not looking like it will get better any time soon.
Speaking of game consoles, San Francisco-based startup Ouya tried to shake things up with its inexpensive Android-based machine, which launched in June.
The initial idea – where all games would be free, with gamers paying only if they liked something – struck a chord with the public, raising more than $8 million through crowd-funding site Kickstarter. But the Ouya’s execution left reviewers with much to be desired.
From a controller that lagged to a dearth of games – especially ones that couldn’t be found already on other consoles or mobile devices – the slim, $100 system failed to live up to its intention of setting the gaming world on fire. Tracking firm NPD Group said sales of the device itself were “relatively light,” while game developers reported poor returns for products sold through the console. So far, Ouya’s promised revolution has fizzled.
Not even mighty Apple, riding several years of record-breaking products, could withstand the forces of flop in 2013. Comparisons by several news outlets of the iPhone 5C, one of the two new phones launched by the company this fall, to Microsoft’s Surface RT were certainly ignominious.
Moreover, analysts pegged sales of the 5C – which was essentially last year’s iPhone 5 repackaged in a colourful shell – as lagging considerably behind the 5S, the other, more advanced phone launched at the same time.
Apple hasn’t disclosed sales figures for the 5C, but with several prominent retailers including Best Buy and Target cutting the device’s price in half after just a few weeks of availability, the signs of struggle were certainly there.
Facebook Home/HTC First
Remember the Facebook phone? It’s okay if you don’t – it’s one of those artifacts of 2013 that is sure to be quickly forgotten.
Unveiled in April, Facebook Home was a downloadable interface for Android phones that would overlay on the basic operating system. It essentially inserted Facebook as the core function of the phone, with everything else riding adjunct to it.
Not surprisingly, that freaked a lot of people out. While many Facebook users like the website for keeping in touch with friends and relatives and for sharing news and photos, there’s also a palpable fear of its pervasiveness, developed and cultivated through years of questionable privacy policies.
The first optimized Facebook Home phone, the HTC First, was quickly pulled by AT&T in the United States after selling poorly.
While it has yet to escape its beta-testing stage to become a full commercial product, few gadgets have turned the public off like the greatly hyped Google Glass.
As a pair of eyeglasses equipped with a camera, it’s another entry in the wearables category, which promises a future where everything its wearer sees can be turned into data that can then be crunched and used – and in Google’s likely case, sold. But there’s the question of whether it’s a solution in search of a problem.
“It creates more problems than it solves,” says Enderle.
Indeed, with bars and restaurants and even transport regulators pre-emptively banning Google Glass because of its privacy and safety implications, it’s a technology that looks to be a long way away from mainstream acceptance. “Plus, it makes you look like a giant nerd,” Enderle adds.
Wireless new entrants
It’s not just gadgets themselves that flop, sometimes their purveyors do too. In Canada, that's been the fate of several of the smaller wireless providers that were once the federal government’s best hope for more competition in the sector.
Mobilicity filed for credit and bankruptcy protection after Ottawa rejected a proposal by Telus to buy the struggling startup, and its future is now uncertain. Telus did receive the green light from the Competition Bureau to buy Public Mobile, another new entrant.
Wind, the third member of the independent trio, is on the block with its Russian-based owner Vimplecom looking to get out of Canada. While noises were made this summer about U.S. cellphone giant Verizon coming in to buy the company and perhaps some of the other startups, that possibility has since fizzled.
All this leaves the government’s plans for more competition – and therefore lower prices for consumers – on the brink of flopping.
They were supposed to be the saviors of the company, not to mention Canada’s technology sector. But the long-awaited and repeatedly delayed BlackBerry 10 devices may be among the final nails in the company’s coffin.
The all-touch-screen Z10 arrived in February, with the keyboard-equipped Q10 following in April. Despite relatively positive reviews, the poor sales that followed made it clear that smartphone users – once fiercely loyal to the Waterloo, Ont.-based market pioneer – had moved on.
BlackBerry, it turns out, suffered from all the elements of a flop. As SRG’s Yigit points out, the company’s devices lagged behind the advances made by competitors. And, as IDC’s Napier suggests, BlackBerry’s inability to match Apple and Android in apps and overall features made it tough for consumers to consider the new devices.
The company, which is now in limbo as it searches for a buyer, also forgot its core market and tried to be too much like competitors.
“They came out with an iPhone that wasn’t. It was just too similar to what they were trying to replace,” Enderle says. “They were so focused on going after Apple that they forget they have to be a better BlackBerry.”
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