In my opinion, spinning off HP's PC business as a separate company is bad for 3 reasons:
1. Brand Equity Loss. "HP" means technology and innovation to many people. This iconic company has been contributing to American' technology growth since it was founded in the silicon valley. Consumers and business "dig" HP's PC because the brand means quality and performance. Should HP spins off their PC business, the new company will no longer be recognized as the same as "HP". If brand equity is lost, so does business. Good luck for hoping a Best Buy customer associate explaining to the customers that this X-brand PC is just the same as a HP product.
2. Reduced Cost Efficiency. "HP" as a whole has very high efficiency of leveraging their supply and manufacturing in cost control. When HP negotiates with their suppliers, from component vendors to system integrators (a.k.a. ODM), their suppliers see their business potential in the entire "HP pie". Not only HP has PC business, they also make printers, servers and other system infrastructure equipment. For a lot of their vendors, many of them apply the business strategies of losing money or breaking even at the PC division, and hope for making money from HP's other divisions after "getting their foot in the door". Similar situation exists for HP's manufacturing facilities. However, if HP spins off their PC business, I think HP would keep their high end Server business associated with their software IT solutions (think of Oracle, they bought Sun for their hardware). The result is that the new spin-off company no longer has the same bargaining power in front the vendors and ODMs. They can no longer enjoy extremely low manufacturing costs because the ODMs, like Inventec, Pegatron, Quanta, etc., will now have to deal with HP separately for the high-margin business. Without world-class cost control and manufacturing efficiency, the new spin-off company is deemed for failure competing against Dell.
3. Ever Shrinking Business Potentials. PC is at its middle age. Sad to say, but its market size is shrinking. The once glory days of personal computer are long gone. Spinning off a business with the intention of winning in the PC market is boring and risky at the best. Knowing that the business's future is shrinking, no investor will even dream for the new company to grow, let along fast. The PC industry is highly consolidated due to severe price erosion, and most OEM players are in Asia - Lenovo, Fang Zheng, Tong Fang, Asus, Acer, Toshiba, Sony, Pansonic, NEC, Fujitsu, etc. The last two standing American companies are Dell and HP, while HP has one of its knee on the ground.
HP successfully made the spin-off Agilent. Agilent successfully made the spin-off Avago. But I highly doubt HP will be successful spinning of their PC business. Or if they're successful (i.e. cashing out), the new company may not be successful.
Here is my proposal, should HP's board finally decides to spin-off their PC business, please rename the company Compaq.
Tuesday, August 30, 2011
Monday, August 29, 2011
Angry Birds' Score Rules - Is It Fair?
"Angry Birds" is arguably the most successful game to date based on a mobile platform. People love to play Angry Birds, from young to old. The game's rules are fairly simple, and it serves well as a time-wasting entertainment.
Here is an interesting question/thought I have, solely based on my experiences with the game - are Angry Birds' score rules fair? I think not.
Well, for one, in order to judge something "fair" or "not fair", one needs to know the contents of the rules. Unfortunately, I didn't have the time and celebrity-significance of getting that information from Angry Bird's developers. Let me summarize the "rules of principles" (read NOT the entire ruling algorithm), based on my experiences, as the following:
- All Angry Birds players should know that the game has two related scoring systems. One is the actual "score", which is mathematically calculated based on how the game is played - how many pigs are killed, how many blocks are destroyed, and how many birds are used, etc. Once the level is completed (i.e. all pigs are killed), the 2nd system rates the player's overall performance and assigns a Star level out of three. Three Stars (3-Star) is the best.
- I claimed the above two systems are related because I think people would generally agree that, playing in the same episode at the same level, the higher the final score, the higher the Star level.
- The game awards a "Total Destruction" achievement if a player achieves 3-Star in all levels in each episode. In order to achieve 3-Star for all levels, players are addicted of coming back and improving their performances or scores for each level.
So far, I think most readers would agree with what I said above. But I think there are two additional ruling conditions that make the game's score rules "unfair". Based on my guess, they are the following:
- In order to achieve 3-Star for a particular level, the player must get a score higher than the previous record. For example, if the player got 160,000 points and 2-Star at a particular level, the player must get higher than 160,000 points for the possibility of winning a 3-Star when the level is played. In addition,
- the level has to be "played" in a particular way, (possibly) pre-defined by Angry Birds developers.
The last point above makes me drawing the conclusion that Angry Birds score rules are not necessarily "fair". Let me explain.
First, I don't believe the game assigns Star based on the final score in a level. I said the score and the Star are related, but the Star levels are not assigned by score ranges. For example, if the score is below 120,000, 1-Star; if the score is between 120,001 and 150,000, 2-Star; and if the score is higher than 150,000, 3-Star. This is NOT the case. I have not compared my scores with my friends for a particular level. However, I think it's possible that the game gives 2-Star to me and 3-Star to another person for a particular level, even if my highest score for that level is higher than the other person's. If I play the same level over and over again, and if I had achieved 2-Star for that level before, there is no guarantee that I would get a 3-Star no matter how much higher my new score is compared to my previous record. Getting a higher score than the previous record is one of the required conditions for getting a 3-Star, but it's not the only condition.
For the second condition, I think the game assigns Star level based on play patterns - how well the player executes the physics of the birds, and at what sequences the birds are used. In my experience, it is much easier to achieve 3-Star for some levels, even at the 1st attempt. I believe I can improve the scores for these levels (e.g. destroy more blocks, etc.) should I spend more time. However, I think I was given 3-Star because I "did it correctly" at the first attempts. In the opposite scenarios, the game simply refuses of giving 3-Star no matter how much "destruction" is made in a level, or how high the score is. In one particular example, Episode 1, Level 2, I attempted but failed many times for the 3-Star. My score record kept growing, but I always received 2-Star. When I finally "got it", I realized that I must over-shoot the red bird and let it kill a pig after bouncing from the wall. The game finally gave me the 3-Star because I think I followed "the right way". In another example, Episode 17, Level 7, I was able to kill all pigs using only two birds (many attempts and a little luck), with a total destruction of most concrete and wood blocks. I got bonus for the yellow bird and red bird I didn't use (10,000 each), and I scored 122,580 as a record for that level. I thought that was pretty high and pretty good, but I was given 2-Star (maybe the game thinks I was too lucky?). And I have not figured out how to achieve 3-Star for that level yet.
The above is perhaps read as boring and random. I wonder if there is any die-hard Angry Birds players ever paid attentions to these details. Too me, Angry Birds' Star-assignment is like a little black magic. The game rules are simple, but the scoring rules are not. When a product is defined, it is always important to strategize how the customers will perceive the final product. Some times, some perspectives of a product is designed to be "confusing" to customers (e.g. is there a correlation between the material cost of a skincare product and its retail price). In this case, I wonder if Angry Birds developers purposely made the Star levels difficult and relatively random, so that people would keep coming back and spend more time on the game.
Either way though, whether its score rules are fair, Angry Birds is still an excellent, entertaining, well designed mobile game.
Here is an interesting question/thought I have, solely based on my experiences with the game - are Angry Birds' score rules fair? I think not.
Well, for one, in order to judge something "fair" or "not fair", one needs to know the contents of the rules. Unfortunately, I didn't have the time and celebrity-significance of getting that information from Angry Bird's developers. Let me summarize the "rules of principles" (read NOT the entire ruling algorithm), based on my experiences, as the following:
- All Angry Birds players should know that the game has two related scoring systems. One is the actual "score", which is mathematically calculated based on how the game is played - how many pigs are killed, how many blocks are destroyed, and how many birds are used, etc. Once the level is completed (i.e. all pigs are killed), the 2nd system rates the player's overall performance and assigns a Star level out of three. Three Stars (3-Star) is the best.
- I claimed the above two systems are related because I think people would generally agree that, playing in the same episode at the same level, the higher the final score, the higher the Star level.
- The game awards a "Total Destruction" achievement if a player achieves 3-Star in all levels in each episode. In order to achieve 3-Star for all levels, players are addicted of coming back and improving their performances or scores for each level.
So far, I think most readers would agree with what I said above. But I think there are two additional ruling conditions that make the game's score rules "unfair". Based on my guess, they are the following:
- In order to achieve 3-Star for a particular level, the player must get a score higher than the previous record. For example, if the player got 160,000 points and 2-Star at a particular level, the player must get higher than 160,000 points for the possibility of winning a 3-Star when the level is played. In addition,
- the level has to be "played" in a particular way, (possibly) pre-defined by Angry Birds developers.
The last point above makes me drawing the conclusion that Angry Birds score rules are not necessarily "fair". Let me explain.
First, I don't believe the game assigns Star based on the final score in a level. I said the score and the Star are related, but the Star levels are not assigned by score ranges. For example, if the score is below 120,000, 1-Star; if the score is between 120,001 and 150,000, 2-Star; and if the score is higher than 150,000, 3-Star. This is NOT the case. I have not compared my scores with my friends for a particular level. However, I think it's possible that the game gives 2-Star to me and 3-Star to another person for a particular level, even if my highest score for that level is higher than the other person's. If I play the same level over and over again, and if I had achieved 2-Star for that level before, there is no guarantee that I would get a 3-Star no matter how much higher my new score is compared to my previous record. Getting a higher score than the previous record is one of the required conditions for getting a 3-Star, but it's not the only condition.
For the second condition, I think the game assigns Star level based on play patterns - how well the player executes the physics of the birds, and at what sequences the birds are used. In my experience, it is much easier to achieve 3-Star for some levels, even at the 1st attempt. I believe I can improve the scores for these levels (e.g. destroy more blocks, etc.) should I spend more time. However, I think I was given 3-Star because I "did it correctly" at the first attempts. In the opposite scenarios, the game simply refuses of giving 3-Star no matter how much "destruction" is made in a level, or how high the score is. In one particular example, Episode 1, Level 2, I attempted but failed many times for the 3-Star. My score record kept growing, but I always received 2-Star. When I finally "got it", I realized that I must over-shoot the red bird and let it kill a pig after bouncing from the wall. The game finally gave me the 3-Star because I think I followed "the right way". In another example, Episode 17, Level 7, I was able to kill all pigs using only two birds (many attempts and a little luck), with a total destruction of most concrete and wood blocks. I got bonus for the yellow bird and red bird I didn't use (10,000 each), and I scored 122,580 as a record for that level. I thought that was pretty high and pretty good, but I was given 2-Star (maybe the game thinks I was too lucky?). And I have not figured out how to achieve 3-Star for that level yet.
The above is perhaps read as boring and random. I wonder if there is any die-hard Angry Birds players ever paid attentions to these details. Too me, Angry Birds' Star-assignment is like a little black magic. The game rules are simple, but the scoring rules are not. When a product is defined, it is always important to strategize how the customers will perceive the final product. Some times, some perspectives of a product is designed to be "confusing" to customers (e.g. is there a correlation between the material cost of a skincare product and its retail price). In this case, I wonder if Angry Birds developers purposely made the Star levels difficult and relatively random, so that people would keep coming back and spend more time on the game.
Either way though, whether its score rules are fair, Angry Birds is still an excellent, entertaining, well designed mobile game.
Thursday, August 25, 2011
Acer Chairman is Wrong - Tablet is Here to Stay and Prosper
According to DigiTimes, Acer chairman JT Wang believes "tablet PC fever" is "cool down". When this story was reported by Slashdot, it was called "Acer CEO Declares a Tablets Bubble". I think Acer's chairman is dead wrong.
I talked that HP made a fatal mistake when the company decided to enter the tablet market. The situation is perhaps better in the Android world because most of other tablet OEMs adapt Google's tablet OS. The combined mass creates a comparable Apps developer community to Apple's. However, just because HP decided to quit the tablet market, it does not imply that the consumer no longer need tablets. And certainly, there is no "tablet bubble"!
Looking at Apple's iPad sales in quantity, the numbers grew quarter by quarter and year by year. Apple is projected to sell 30Mu iPad in 2H'11. There are many out there waiting for the iPad 3 coming with higher resolution, from existing iPad and iPad 2 owners, as well as those "I don't have an iPad" consumers. I believe consumers love and want to buy tablets, at the right price and with iPad-comparable performances. The reason I say so is because in the tablet market, there is only one player dominating with huge profits, Apple. That says market demand is larger than supply, and competitions cannot keep up.
Apple basically caught their competitions by surprise. No one knew Apple worked on the product for several years. After iPad was released, Apple's competitors scramble to follow, but they had much less time for both the hardware and software development. In combination, the final products are offered at comparable prices to the iPad, but with sluggish software performance. Just because the PC OEMs cannot compete, it doesn't mean there is a "bubble". Nobody is throwing money away like crazy as in a true "bubble" situation. And for those who can deliver a tablet fitting consumer needs, there is still plenty of money to be made.
I believe in the next a couple of years, we should see strong contenders to Apple's iPad (3?). I think that pack would be led by a Nokia-made tablet running Windows 8 and a Motorola Mobile-made tablet running Android. For the rest, Samsung, hTC, LG, Asus and even Acer, they should either quit tablet and stay with PC, or become much better in their designs. Just don't call it a "bubble".
I talked that HP made a fatal mistake when the company decided to enter the tablet market. The situation is perhaps better in the Android world because most of other tablet OEMs adapt Google's tablet OS. The combined mass creates a comparable Apps developer community to Apple's. However, just because HP decided to quit the tablet market, it does not imply that the consumer no longer need tablets. And certainly, there is no "tablet bubble"!
Looking at Apple's iPad sales in quantity, the numbers grew quarter by quarter and year by year. Apple is projected to sell 30Mu iPad in 2H'11. There are many out there waiting for the iPad 3 coming with higher resolution, from existing iPad and iPad 2 owners, as well as those "I don't have an iPad" consumers. I believe consumers love and want to buy tablets, at the right price and with iPad-comparable performances. The reason I say so is because in the tablet market, there is only one player dominating with huge profits, Apple. That says market demand is larger than supply, and competitions cannot keep up.
Apple basically caught their competitions by surprise. No one knew Apple worked on the product for several years. After iPad was released, Apple's competitors scramble to follow, but they had much less time for both the hardware and software development. In combination, the final products are offered at comparable prices to the iPad, but with sluggish software performance. Just because the PC OEMs cannot compete, it doesn't mean there is a "bubble". Nobody is throwing money away like crazy as in a true "bubble" situation. And for those who can deliver a tablet fitting consumer needs, there is still plenty of money to be made.
I believe in the next a couple of years, we should see strong contenders to Apple's iPad (3?). I think that pack would be led by a Nokia-made tablet running Windows 8 and a Motorola Mobile-made tablet running Android. For the rest, Samsung, hTC, LG, Asus and even Acer, they should either quit tablet and stay with PC, or become much better in their designs. Just don't call it a "bubble".
How I Convinced a Colleague to Join Weibo
Some people might heard of Weibo. It literary means "micro blog" in Chinese, which is basically, you know, Twitter! Although there are many Chinese social media companies try to replicate the Twitter's success, they were luckily blessed because Twitter is blocked out from the majority of Chinese Internet users. Sina.com was the first to introduce "Wei Bo" in China, and since then the word "Weibo" is recognized among the users and became widely popular.
At a business dinner with one of my colleagues in Shenzhen, I asked the question whether they use Weibo. And I was stunned to hear a quick "no" from a colleague at similar age. With over 100 Million subscribers at that time, Sina's Weibo by itself is already a white-hot topic among many Chinese citizens and is especially among the 20-40 years old. I asked my colleague why, and his answers was that he was too busy to "waste" time on tracking and listening strangers online.
I then put my "techie" hat on and tried tried to convince him that Weibo is about sharing information with more transparency and efficiency. My colleague argued how busy his life is. He travels often as a marketing person. He visits customers during the day and answers emails in the evening. He has a new born baby that cries at night, and he has to spend most of his weekend helping his wife with housework. Where is the time and energy left for Weibo?! The arguments flied back and forth, and I even dragged another lady at the dinner table who's also a Weibo activist. He could not be convinced.
I decided to give a last try and took a different approach. Knowing that Chinese parents constantly search for safe milk powder after the "contamination-gate" took place in China, I asked my colleague if he would be interested in finding where he could buy imported, safe milk powder quickly and easily. "Of course" was the quick and easy answer I expected. Thereafter, I really didn't have to sell much once I realized my customer's "needs". I told him that he could easily find out from Weibo by searching the key phrases. There are people on Weibo want to promote and sell their milk powder. There are also many groups of Chinese parents on Weibo that share their milk powder shopping experiences. Although I've never tried myself for none of these, I was pretty certain of my assumption at the time.
The story goes that after a couple of month, I visited Shenzhen again and had another lunch with the same guy. He told me he joined Weibo that night when I told him about Weibo would help him find good milk powder quicker, and he later found it was indeed very interesting to "play with". He followed a few celebrities and told me that he saw different personalities of the celebrities from his previous perceptions.
I am not a sales person for Weibo or Sina, but since I believe the product's value in life, I wanted to share it with people who also can use it in better ways. I convinced him of its value by understanding his needs, and I called that a home-run for marketing!
At a business dinner with one of my colleagues in Shenzhen, I asked the question whether they use Weibo. And I was stunned to hear a quick "no" from a colleague at similar age. With over 100 Million subscribers at that time, Sina's Weibo by itself is already a white-hot topic among many Chinese citizens and is especially among the 20-40 years old. I asked my colleague why, and his answers was that he was too busy to "waste" time on tracking and listening strangers online.
I then put my "techie" hat on and tried tried to convince him that Weibo is about sharing information with more transparency and efficiency. My colleague argued how busy his life is. He travels often as a marketing person. He visits customers during the day and answers emails in the evening. He has a new born baby that cries at night, and he has to spend most of his weekend helping his wife with housework. Where is the time and energy left for Weibo?! The arguments flied back and forth, and I even dragged another lady at the dinner table who's also a Weibo activist. He could not be convinced.
I decided to give a last try and took a different approach. Knowing that Chinese parents constantly search for safe milk powder after the "contamination-gate" took place in China, I asked my colleague if he would be interested in finding where he could buy imported, safe milk powder quickly and easily. "Of course" was the quick and easy answer I expected. Thereafter, I really didn't have to sell much once I realized my customer's "needs". I told him that he could easily find out from Weibo by searching the key phrases. There are people on Weibo want to promote and sell their milk powder. There are also many groups of Chinese parents on Weibo that share their milk powder shopping experiences. Although I've never tried myself for none of these, I was pretty certain of my assumption at the time.
The story goes that after a couple of month, I visited Shenzhen again and had another lunch with the same guy. He told me he joined Weibo that night when I told him about Weibo would help him find good milk powder quicker, and he later found it was indeed very interesting to "play with". He followed a few celebrities and told me that he saw different personalities of the celebrities from his previous perceptions.
I am not a sales person for Weibo or Sina, but since I believe the product's value in life, I wanted to share it with people who also can use it in better ways. I convinced him of its value by understanding his needs, and I called that a home-run for marketing!
Wednesday, August 24, 2011
HP did what others not dare
The story of HP quitting the tablet market is no longer news. Tech world has a much faster clock rate than many other industries. Things happened a week ago can be obsolete, but I think this story will remain as a marketing textbook classic.
The truth is HP made a fatal mistake. Just because almost every other competitor attempts to take a slice from the "iPie", it does not mean HP can win a feasible business out of the competitions. The TouchPad was poorly designed from an industrial standpoint. Its WebOS does not have the critical mass compared to iOS and Android. Thus, there is much less commitment from the developer community to contribute 3rd party Apps. And Apps is what makes Apple iPad stands out among the competitions. Releasing the TouchPad and fighting the battle against Motorola, Samsung, hTC and many others simply means HP would have to continue pouring money into the business for the sake of keep its gambling seat.
There of course is a blame war ongoing. Many would say HP should have not purchased Palm in the first place. Arguably, Palm's later mobile phones are not that great also, let alone the TouchPad. And the general manger whoever decided to enter the table competition should get fired. Many would also say that HP's board should also take responsibilities. All true, but it does not matter anymore. In business, this is considered as sunk cost. Mistakes were made, resources and capitals were spent, and nobody can reverse it. The key is what To do now. I think HP's board made a plausible decision that they have the guts of calling for a quit without further wasting of company's resource.
In many business opportunities I saw, some companies do not have the dare to admit their marketing mistakes. The marketing people didn't do the job properly (e.g. draw a "big pie") or didn't dare to stop their management from madly chasing competitions. They kept fighting the war even though they knew there would be no money made no matter how long it lasts. Companies do not easily quit for many reasons. Beyond the internal politics (a money-losing business is always a trap topic in the board room), companies are typically hesitate because quitting early often leads to credibility damage at the customers. However, sometimes, admitting a mistake and re-strategize the company can save huge amount of resources and set things right once for all. That's what I believe HP did. For an innovation driven company like HP, living with 20-30% gross margin for a product is not acceptable. HP has to "up sale" itself as a technology provider, a solution vendor, and a business partner for their customers. Killing the TouchPad and easing out the PC marketing marks a transition point for the company.
No one knows if HP's new CEO and the board can pull this off. For a company that's worth $60 Billion (before the 20% stock price drop), steering this gigantic ship is no easy job. There are the two obvious possibilities in ten years. If HP succeed of transitioning itself and become another IBM-like company, quitting the consumer electronics market would be marked as a classic business success story. Else, this move will be considered as a self-sabotage action that severally damages HP's business future.
Either way, I believe HP did what many others not dare.
The truth is HP made a fatal mistake. Just because almost every other competitor attempts to take a slice from the "iPie", it does not mean HP can win a feasible business out of the competitions. The TouchPad was poorly designed from an industrial standpoint. Its WebOS does not have the critical mass compared to iOS and Android. Thus, there is much less commitment from the developer community to contribute 3rd party Apps. And Apps is what makes Apple iPad stands out among the competitions. Releasing the TouchPad and fighting the battle against Motorola, Samsung, hTC and many others simply means HP would have to continue pouring money into the business for the sake of keep its gambling seat.
There of course is a blame war ongoing. Many would say HP should have not purchased Palm in the first place. Arguably, Palm's later mobile phones are not that great also, let alone the TouchPad. And the general manger whoever decided to enter the table competition should get fired. Many would also say that HP's board should also take responsibilities. All true, but it does not matter anymore. In business, this is considered as sunk cost. Mistakes were made, resources and capitals were spent, and nobody can reverse it. The key is what To do now. I think HP's board made a plausible decision that they have the guts of calling for a quit without further wasting of company's resource.
In many business opportunities I saw, some companies do not have the dare to admit their marketing mistakes. The marketing people didn't do the job properly (e.g. draw a "big pie") or didn't dare to stop their management from madly chasing competitions. They kept fighting the war even though they knew there would be no money made no matter how long it lasts. Companies do not easily quit for many reasons. Beyond the internal politics (a money-losing business is always a trap topic in the board room), companies are typically hesitate because quitting early often leads to credibility damage at the customers. However, sometimes, admitting a mistake and re-strategize the company can save huge amount of resources and set things right once for all. That's what I believe HP did. For an innovation driven company like HP, living with 20-30% gross margin for a product is not acceptable. HP has to "up sale" itself as a technology provider, a solution vendor, and a business partner for their customers. Killing the TouchPad and easing out the PC marketing marks a transition point for the company.
No one knows if HP's new CEO and the board can pull this off. For a company that's worth $60 Billion (before the 20% stock price drop), steering this gigantic ship is no easy job. There are the two obvious possibilities in ten years. If HP succeed of transitioning itself and become another IBM-like company, quitting the consumer electronics market would be marked as a classic business success story. Else, this move will be considered as a self-sabotage action that severally damages HP's business future.
Either way, I believe HP did what many others not dare.
Monday, August 22, 2011
惠普与WebOS
惠普一年半前花12亿买PALM, 为的就是WebOS. 如今惠普宣布退出个人电脑和平板电脑市场, 停产WebOS, 就说明那12亿全都打水漂了. 最惨的是Jonathan Rubinstein, 他被称为iPod之父, 曾经是苹果的顶尖人物. 他离开乔布斯去PALM, 结果兵败惠普. 大将领兵, 才能重要, 兵力和军资更重要. 侍明主为俊杰也!
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