3 Reasons why In-House Technology may be Inhibiting Product Innovation

3 Reasons why In-House Technology may be Inhibiting Product Innovation
Product Innovation

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Remember when Google was just a search engine, Apple only made computers, and Amazon just specialized in e-commerce? Lately, it seems that every large tech company is trying to be the “jack of all trades,” but by dabbling in so much, perhaps they are becoming a “master of none.”

Google has evolved from search to other online offerings like Gmail, Google+, and eventually hardware: tablets, smartphones, Google TV. Content grew too with mobile apps, operating systems and so much more. Apple was first famous for computers and operating systems and now popularly offer things like smartphones, tablets, mp3 players, Apple TV, iTunes and let’s not forget mobile apps – some proving to be less successful than others. Samsung now has its own app store while rumors of an Amazon smartphone continue to exist.

These companies are starting to silo themselves more and more hoping that consumers will use their suite of products and services exclusively for what is arguably a seamless and easy user experience (and very profitable). And while that seamless experience is one of the benefits in sticking to one company’s products, this growing trend also has the potential to leave me stuck in an ecosystem of mediocre products and hinder the product innovation we expect from these organizations.

How so?

1. As a Consumer, High Switching Costs May Have me Settling

Product Innovation

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How often do you really switch your cell phone plan? Odds are, the effort to switch to a different plan or different provider, even if you’re out of contract, is too much of a hassle or you don’t think you’ll find anything better since you don’t have the tenure with a new provider like you do with your current one.

Even if I want expandable storage on my iPhone or iTunes on my Android, am I really going to switch to a whole new operating system for it? Probably not…and for a company, that’s comforting. But for me, it can be frustrating. The effort to switch is probably not worth it even if you’re unhappy with a particular offer.

2. Doing it all Means it’s all Sub-Par

Have you ever seen restaurants that advertise “tacos, pizza and burgers?” It’s unlikely that the chef excels in all three so you end up with ok food. You would have been better off just going to a Mexican place, Italian restaurant or Burger joint.

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For companies, going in-house potentially has the same risks. You don’t have to share your profits with external vendors but it can become difficult to stretch your resources to be the best across multiple lines. In an effort to do it all and give your consumers what they want in one convenient place, you may not be fully optimizing each product or feature. The biggest place I see this is often in the user interface of each of these new devices…Google TV received lackluster reviews and even while TVs are starting to come with voice, gesture and personalized recommendations, usage for these extra services is very low often due to poor user experiences.

3. Businesses Make Tweaks Instead of Transformations

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Remember when the auto industry used to be the leader in product innovation? ABS brakes, airbags, radios, GPS systems…the list goes on and on. These days I can’t seem to remember what car commercial told me it has the highest fuel efficiency rating even if I saw it 10 seconds ago. When cars became widely adopted and companies felt like they had locked in strong user bases, they focused less on product innovation and more on just keeping what they made in good working order. That was fine for a while but as we know in the last few years, bankruptcies and bailouts have challenged these companies to rethink their current products. Only now are we starting to see higher MPGs, hybrids, and cars that will park themselves.

Sometimes I see signs that the technology space may be headed down the same path. We get excited for big product announcements but see minor changes. We either commit to one company to be able to use the same products/apps across devices or we frustrate ourselves to learn multiple interfaces so we can have everything we want. And these companies in turn start to focus on tweaks just to keep their customers content rather than challenge the status quo. Are we headed to a point where, like I keep my car because it still runs, I’ll start doing the same with my tablet?

As someone who works at a company specializing in testing product innovation, I don’t think we’re there yet. I’m still getting excited for what announcements will come out of CES and anxiously awaiting my Galaxy S3 to update to the Premium Suite. But as these ecosystems become more prevalent and I feel like I’m forced to choose one, it’s important to remember that old content must be easily accessible, user interfaces must be easy to learn and new and innovative features still have to be introduced. The company that manages that, will not only retain its customers and acquire new ones, it will be the company that wins.

- Svetlana Gitelzon

Senior Project Director, Vantis

svetlana.gitelzon@ipsos.com

646.313.7653

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Written by Sveta

Product/service that changed my life...My Kindle! No more heavy books in my bag on the NYC Subway! - I’m one of those people that read’s the owners manual to learn every feature of new gadgets - Three words to describe me: organized, detailed, bubbly - Research suits me because the analytical side of me gets to play with numbers while the marketer in me can wordsmith and craft the right phrasing to bring products to life! Majored in finance and marketing at the University of Minnesota

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