I read an article in Red Herring about how Cingular Wireless (AT&T) made an agreement with several banks to allow bank customers "to manage their accounts and pay bills electronically by using an application on their cell phone." The article states that this new feature is taking "a step toward the long-promised notion of phones replacing credit cards, checks, and cash." As I read this, I couldn't help but think about what the future will hold. It seems that many products we use today are already a combination of older products. In many instances, the key to innovation is not to create a new idea, but to simplify or combine other tasks into one simple step. We have seen how cell phones have already begun to take on more uses as they are now used for phones, music, videos, internet, email, cameras, games, and many other features. By adding these extra features, do you think that it is taking away from other products? For example, I can play the game Monopoly on my cell phone. Because of this, I currently have no desire to go out and buy the board game. In conclusion, it seems to me that products today are enabling consumers to accomplish many tasks with a simple device. Again, we could consider video game systems and DVD players. If this trend keeps on going, we will have no need for many of the products we use today. They will be combined with other products. However, there may always be competition to see who can come out with the best or the fastest device. It will be interesting to see what the future has in store for us.
8 comments:
I agree with Sebastian. The new and exciting products we use today are the same old products varied slightly or with new features and capabilities added. Look at cars. They started out as wagons or carriages and have evolved over the years, giving us the many makes, styles and options we have today. Product creation and innovation is most often about meeting a need better than the old product did. Producers in these industries, take Monopoly for example, need to be forwardlooking and see themselves as competitors in the entertainment industry rather than just the board game industry, or they surely will get left behind.
Yes, I agree that technology has made it possible to integrate products and find better product solutions. The question however always remains: Does this new feature actually make things easier? From the very beginning the producers of mobile phones have been adding feature after feature to their products. Not every new feature however was a success and cell phones still have a tendency to brake down. Today’s credit cards are very durable and as long as cell phones don’t share the same characteristic, credit cards will remain in our wallets.
It is very exciting to see what is in store for the future. When I identify new technology and trends I like to see how they will help me accomplish tasks. If they serve me better then past technology’s or enable me to serve more ends with less means then I am all for it.
If my purpose for playing monopoly was to interact with other individuals and throw fake money when I lost, a monopoly game on my cell phone would not meet my end. If the cell phone served the purpose of paying for items in the same capacity as a credit card, it serves my end. There are many more examples, but I see technology and innovation as means to an end, the question is whether it meets it for each individual.
I agree with Kate in that there will always be separated products. I would not be interested in playing monopoly on my cell phone. I would rather spend the time with friends and interacting with them. On the other hand I love the technological advances. What a wonderful time to live in which it is getting easier and easier to communicate all types of information. I believe our economy is based on technology whether we like it or not. It fuels us and allows our productivity to remain as high as it is.
This is all platitudes. You missed the ManEc: 1) product differentiation, 2) product bundling, and 3) sustaining competitive advantage.
1) They constantly add features as a form of differentiation.
2) Not all bundles are guaranteed to work - it depends on the price and value of each combination.
3) Competitive advantage isn't sustainable, in this arena, on the basis of a single thing. So the firms have to be serial innovators.
Dr. Tufte,
I agree with you and think that what is going on is basic bundling. With the cell phones they are able to bundle certain products together to create a new market (differentiate). I think in the future we will see a lot more of bundling because consumers like to have things quick, easy, and all together in the same unit. Of course the bundling must be something that the consumer sees as valuable to them. If the extra products offered bring little to no value to the consumer then they will not spend the extra money for the additional products. It all comes down to marginal benefit and costs. If it brings more value than it costs then the consumer will purchase the item.
-1 on William because both comments have already been counted.
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