For over 20 years I have incorrectly predicted that the Philadelphia Flyers would win hockey’s Stanley Cup championship. I thought “Matlock 2020” would be TV gold in 2001 and just three weeks ago I packed a coat for my trip to a boiling hot Rome. Predictions have never been my forte, but after combing through some past pico-letters, I think that this blind squirrel may have found a nut.
“I saw the future tucked way behind the high definition sets and Atlas plasmas. I saw it in a little 3” LCD screen.”
– “You Had Me at ONE” pico-letter January 2005.
What I saw at CES four years ago was a new camera from Kodak called the EasyShare ONE. The $599 camera was a brave introduction from Kodak and a pioneering product stuffed with features never before offered. The EasyShare ONE was the first camera fitted with a touch-screen display that allowed users to effortlessly flip through pictures and menus by tapping the screen. Kodak’s camera was also the first ever equipped with WiFi connectivity; giving users the ability to email and post their pictures via hotspots across the country.
The “cool” factor of the EasyShare ONE and the camera’s seemingly endless applications were mind blowing. I thought that consumers would salivate for the ONE and that Kodak had finally found a honey pot.
I was wrong.
Sales of Kodak’s EasyShare ONE hardly met expectations. The same ills that killed off the innovative camera were eerily similar to the toxins that took down Apple’s infamous Newton PDA. The EasyShare ONE was given a $699 price tag, far above the costs of similarly performing cameras and, like the Newton, the model was simply ahead of its time.
Two years to be exact:
In January 2007, Apple launched the iPhone and the rest is history as a trendy computer company dumped the cell phone industry on its head. Just as the Palm Pilot plunged into the market that the Newton first found, it was Apple’s iPhone that exploited touch controlled, wireless devices that Kodak first developed in the EasyShare ONE.
While the iPhone on its own has been a historic success, the residual universe that has developed around the device has been Apple’s crowning achievement. Apple’s App Store is the hive where developers create and distribute inexpensive programs that are downloaded for use with the iPhone (and iPod Touch). This hive has grown into its own ecosystem. Thousands of independent and small software developers, drawn by the prospect of quick millions in downloads, have developed over 65,000 applications in two years that have generated over 1.5 billion downloads.
That’s over 65 new applications and 1.5 million downloads per day
Much to Apple’s delight, this community of developers and its amazingly creative applications are now driving iPhone sales. As investment house Piper Jaffray recently shared, Apple has created a self sustaining business model – as more apps are developed, demand for iPhones will increase, therefore creating a larger market for more apps, and the cycle repeats.
In the printing world, HP has developed a product that walks the line between the EasyShare ONE and iPhone. HP’s $399 Photosmart Premium TouchSmart Web All-in-One Printer (or PPTSWAIOP for short) is the industry’s first web connected printer. Driven through the model’s touchscreen interface, the printer can download and operate newly developed applications supported by HP’s Apps Studio.
HP has the potential to grow its PPTSWAIOP and App Studio into a massive hive, bigger than even Apple’s App Store, and in doing so create an astounding competitive advantage over its hardware rivals. However, for HP to grow its App Studio into a dominant go-to-market strategy, the company will have to commit to tactics that counter its religion.
Forget about printing.
The first thing the printing goliath will have to do is forget about printing and trust that ignoring today’s ink profits will bring more hardware sales in the future. To date, printing is still top of mind for HP and the PPTSWAIOP’s first applications have centered on printing. However, having such a narrow focus caps the creativity that developers could apply to future applications for the printer. If Apple, for example, took HP’s approach, early applications would have centered on making phone calls and downloading music, both of which are profit centers. Apple was willing to ignore downloads and phone calls knowing that future applications would drive hardware sales later on (underline that).
With printing amnesia, HP could install its App Store operating platform on every device it makes –notebooks, frames, handhelds, calculators, scanners, printers, monitors, everything. By doing so, HP has a potential installation base of tens of millions of products in less than a year. A larger population would encourage more programmers to develop applications for HP devices, creating the same cyclical business model that Apple has grown.
HP’s second big pill to swallow will be to open source its App Studio platform, a course the company is rumored to take in December. To date, HP has kept its App Studio under wraps and has only announced jointly developed applications from big houses such as Google and Disney. However, if the company wants to generate a groundswell of creative and demand driving applications, it will have to ride the backs of thousands of small development houses using open source code. HP’s future will be the creativity of these independent programmers who will create applications that have nothing to do with the company’s printing business.
An app will be created that can wirelessly throw images from a Kodak brand camera to a HP photo printer. An app will turn a HP scanner into a baseball card reader, instantly organizing a stuffed shoe box into a digitized personal library. Someone will write an app that turns a frame into a television. A kid right now is developing an app that will fax me the exact time and date when my Philadelphia Flyers win the Stanley Cup (sometime next June).
I want that Flyers app and I’ll buy a HP printer to get it.
Hewlett-Packard was founded by two unknown inventors in a backyard garage whose first product was hardly a printer. HP today has the chance to turn every market it competes in completely upside down, but it will take several thousand unknown programmers and applications that have nothing to do with printing to do it.
Palm Pilot or Newton.
iPhone or EasyShare ONE