So yeah, many of you probably read my headline and thought “duh.” I never had a very favorable impression of the Gateway brand either, but I was in a bind. In January I was starting work on a new project, and I needed to replace a 5 year-old Dell desktop I had been using at home. I’m not sure how I lived with one PC for 5 years, but just as I was getting ready to start my new project, boom, the Dell bit the dust. It needed Windows to be reinstalled badly, and since I wanted a new PC anyways, I figured I might as well do it now.
Normally when I buy a PC, I do my research, find a rig online that fits my specs, and then order it, typically online, so I can get a decent price. But, I needed the PC today, like now. So I headed on over to my local Fry’s to see what they had.
Fry’s had a few Dells, HPs, you name it, but the only one that had the specs I wanted for a reasonable price was a Gateway. So I went home that afternoon with my first Gateway. It has a stylish case, cool little covers over the drive bays, and it looks pretty neat sitting there in my desk.
So I got it home, reinstalled Windows clean, got my basic programs installed, and I was good to go. Pretty smooth so far.
Then I plugged a LaCie 1TB external USB hard drive and tried moving some files from it onto the Gateway. The process started, but then crashed mid-copy. I’m thinking, “Okay, it happens, let’s try again.” I go to find the files on the external hard drive, but now I can’t access them at all. The drive has disappeared. I unplug the USB cable, plug it in again, and wait. And wait. After about 5 minutes, the drive shows up, but I can’t click into it.
I open Windows Disk Manager. It hangs. After a few minutes it comes up and says the drive isn’t formatted. I try to format it, but that fails, too. No other PC can read it either. After email exchanges with LaCie, trying a dozen disk recovery programs, I give up. The LaCie has clearly gone to the big PC in the sky.
So what does this have to do with Gateway, you ask? I’m getting there.
I wrote the whole situation off as a rare, out-of-the-blue hard drive failure, and went on with my life. A few weeks later, I needed to move some big files around again, so I scrounged up an old 200GB Western Digital USB external hard drive to help out. I plugged it in to my old Dell to get the files, and then I pugged it in to the Gateway. Big mistake.
The Gateway proceeded to destroy this hard drive the same way it destroyed the first one. It shows up as unformatted in the Disk Manager, and I can’t even reformat it. It’s toast.
The Gateway had then bricked two external hard drives, so I called Gateway tech support. Their email support said I needed to call their pay-support phone number. I’m thinking that they escalated me, but the support should still be free, right? Wrong. The conversation went something like this:
Me: “My Gateway has corrupted two USB hard drives. Is there something you can do to fix it?”
Dude: “Sure thing, let me just get your credit card information, and we’ll get started. Support is $99.”
Me: “I have a two month-old computer that has destroyed two of my hard drives, and you want me to pay for support?”
Dude: “I think I know what the problem is, let me just get your credit card info, and we’ll get started.”
Me: “If you know what the problem is, can’t you just tell me?”
Dude: “I’ll need to get your credit card information first. I think it’s a setting.”
(This is where I realize he has no idea what he’s talking about, and is trying to bluff me into paying.)
Me: “There’s a setting on my PC that will make it destroy USB hard drives?”
Dude: “It’s probably something you did.”
Me: “It’s brand new. All I did was install software. Installing software can make a computer destroy USB hard drives?”
Dude: “If I could just get your credit card information…”
Me: “Could I talk to your supervisor?”
Dude: “I can help you with this.”
Me: “I’d like to talk to a supervisor.”
Dude: “I don’t really have one. He’s not here, and even if he was, I can handle this. If I could just get your credit card info…”
Me: “No thanks.”
So that didn’t go so well. I went back to the email support, and their stance was this:
Please be informed that we handle only factory default hardware issues. As the issue is not with the computer this issue is out of our scope of support.
I informed them that USB ports are default hardware, but apparently their stance is that once you plug anything into those ports, they aren’t responsible. I wonder if they would have the same stance if the monitors I plugged in didn’t work? If I were to put suitcases in my Miata (suspend disbelief for a minute here), I expect the Miata to carry them without destroying them even though they are not the “default hardware” of the car, and I would certainly hold Mazda responsible if it did.
Gateway was having none of my “logic” and held their line.
So, I’m not buying Gateway ever again. It’s actually not because of the hardware, although I do think it’s rather odd for a PC to even be able to kill external hard drive to the point where they’re completely unrecoverable. I’m not buying Gateway again because of their support. They clearly are not a customer-focused company. They are selling PCs, and are not interested in keeping people happy and making sure they are enchanted (as Guy Kawasaki would say) with their products.
I recently read The Ultimate Question by Fred Reichheld (which I highly recommend), and it makes the distinction between “good profits” and “bad profits.” Good profits are when you make money by delighting your customers, as Dell has often done for me, and bad profits are when you make money from people who are ambivalent to your brand or worse are detractors. Gateway had a chance to convert me from an ambivalent customer to a promoter through their excellent service, but they went the opposite way so here I am detracting. And this is why Dell won the PC war and Gateway lost.
Gizmodo put out a post last week that gathered quite a bit of attention called Facebook is AOLifying the Internet–and That Sucks. In it, the author concludes that Facebook’s never-ending quest to add features that keep people glued to their site means they are an aggregation of sub-par services that decrease the quality of our online lives.
It wants to be Netflix, it wants to be your Xbox, it wants to be Foursquare, it wants to be Gmail—Facebook wants to be the internet. Will you let it?
His argument is actually very much akin to the argument against “big box” department stores like Walmart and Target. Supposedly the big stores are “evil” and we should be supporting local businesses because they have more heart and are better at specific things than the big box stores that don’t specialize.
However, the author misses the fact that Facebook, unlike AOL, is always looking for ways to go beyond its walls with Like buttons, comment widgets, and the rest of their social plugins. It wants to enable your social interactions on Facebook.com and off of it. They know they won’t control your Internet experience, but if they can make it richer, they can still provide value and give you a reason to keep coming back. How many of us are thankful for Facebook Connect that keeps us from having to create new accounts on every site we go to?
AOL held its customers in a prison of AOL content and community, but Facebook knows that it can’t compete with third-party content, so they don’t even try. They help their users find the third-party content that their friends are sharing, and that’s actually a pretty “open” thing to do.
A more viable comparison to AOL is actually Apple. Even since the release of the iPod, Stevie Jobs has been working hard to lock people in to the iEcosystem. If you have an iPod, you need iTunes and the iTunes Store. You can’t just throw MP3s onto your iPod, you need iTunes. If you want to buy MP3s online and put them on your iPod, it’s much easier through iTunes Store than through Amazon. Ripping a CD you just bought? Better do it with iTunes to make sure it works right. When the iPhone rolled around with its App Store, our dependence on iTunes deepened even further. Have an iPad? All the same restrictions apply.
Apple knows they can’t truly lock down their platform, but if you have an iDevice, life is MUCH easier for you if you use it the way Stevie wants you to use it, that is, with the other iSoftware and iDevices that were designed for it. If you want to play a file that’s in the wrong format or want to use a different music player on your computer or want to organize your media files yourself, suddenly you have to search for workarounds and hacks. If you have an iPod/iPhone/iPad, it just works better if you use iTunes, and actually even if you use a Mac. The Apple ecosystem is (almost) complete. You can look even further at how Apple restricts the apps they allow in their App Store, but perhaps that’s a topic for another day.
You can fully complete your assimilation with the iEcosystem by subscribing to MobileMe, but so far this is where Apple has fallen down. The services MobileMe offers are all available elsewhere on the Internet, for less money, so only the true Apple believers are on the platform. I think Apple knows their offering isn’t strong enough here, but watch out: New reports like this one lead me to believe they are renovating MobileMe to become a tighter piece of the iEcosystem. Once that’s up and running, I wouldn’t be surprised to see a smooth experience with Apple devices require an iPod/Phone/Pad, iTunes, a Mac, AND a MobileMe account. Starting to sound more AOLesque?
So while it’s not a perfect analogy, Apple wants to control your mobile, computing & media consumption experiences just as AOL wanted to control your online experience. Apple’s platforms may not be completely closed, but they are certainly much easier to live with if you work within the iEcosystem.
None of this is to say that Apple’s products don’t deserve the success that they’ve seen. They are excellent, forward-looking products, and for people who live within the iEcosystem, they perform admirably. For those of us who have needs that go beyond the iEcosystem, life becomes difficult quickly.
And this is where I believe Apple’s strategy diverges from Facebook’s. Facebook knows you’re going to consume content anywhere you find it, and they want to enable that and find ways to make it a richer experience for you. Apple wants you to find content (media) in the places they recommend, and they want you to consume it using their devices. Facebook wants to enable your online life, while Apple wants to BE your computing life. This is by far the more AOLish strategy.
There’s a great article at the Equity Kicker about how Android is a Classic Disruptive Play vs. iPhone, in reference to the Innovator’s Dilemma. I’d argue that Android will disrupt the iPad as well, and before long both the iPhone and the iPad will get pushed to the side as Macs were by Windows and PCs oh so many years ago.
Mind you, I’m not saying they are bad products, but if people can get something almost as good for significantly less money, they’ll generally take it, even if it doesn’t carry the brand status and mystique that a glossier Apple product does. In particular, I think Apple’s insular ecosystem that relies on iTunes and forces users to buy overpriced, proprietary accessories will hurt them in the long run as phones and tablets find more and more uses in our everyday lives.
As smartphones and tablets become commoditized, Apple’s pricing will become increasingly out of whack, and cheaper competitors are sure to steal a large chunk of their marketshare.
PaidContent features an article from our friend Ben Elowitz proclaiming the death of SEO in favor of Social Media Optimization, or SMO, and it’s worth a read (his blog is here.) As I discussed in my blog post on the rise of social search, I think he’s dead on in this prediction. We’ve seen Google’s search add more and more social features, offering tweets and other social media content for some searches, and as we predicted Bing is now integrating Facebook Likes into its search, so clearly marketers will have to start optimizing those channels to get the best placement in social search tools.
If you’ve read my blog at all over the past couple of years, you know how unenthusiastic I am about e-readers in general, and the Kindle specifically. Today, Barnes and Noble introduced their new reader, the NookColor, and it’s a huge leap forward that should help them gain significant market share.
The NookColor is, of course, full color, but also important, it features:
- A web browser
- Support for digital music files
- Support for MP4 video files (I’d like to see more codecs supported, but it’s a start)
- Android OS
- Its own app store, so presumably most Android apps will work with it, although B&N will curate the offerings
- 8GB of internal memory, with a Micro-SD slot that can support up to another 32GB
- A mini-USB port
All that, for the low, low price of…$249. You read that right.
James McQuivey of Forrester Research talked a little today about how this new Nook will affect the Sony and Amazon offerings, but what I want to know is how it will affect the iPad. If you read through that feature list above, it matches the iPad almost feature-for-feature, although it surely has a slower processor, and of course wouldn’t sync with iTunes. (Personally I find iTunes bloated and slow, and can’t stand using it anyways, so no loss there.)
So the question is will people keep shelling out $600+ for Apple’s iPad? If so, why? The prestige? The “cool factor”? Because they’ll only buy Apple products?
The NookColor really hits the sweet spot, and is a sign of things to come. It caters to those of us to don’t read enough to justify a dedicated e-reader (most Americans, I’m guessing), and to those of us who think the iPad just isn’t useful enough to justify the price (I don’t think I’m alone there, either.) The NookColor is actually the first e-reader or tablet that has piqued my interest as having sufficient functionality at a reasonable price point. And it doesn’t look half-bad, either.
I don’t think B&N has the marketing chops to take on Apple, but I think the NookColor is the first in a string of low-end tablet/readers we’ll see come out in the next year or two that will turn tablets into a commodity product, like netbooks. At their current pace, Apple may see the iPad get Mac’ed in the not-too-distant future. Its cost and closed nature will relegate the iPad to a niche market of customers who will spend significantly more for the sense of style and status that Apple products bring with them, but the mass market will yet again pass Apple by. Incidentally, Android phones are selling faster than iPhones these days, too…