To watch TV over the past couple of months, one would think that the wireless phone and data providers in the US have undertaken a massive effort to improve their coverage and data speeds across the country. The four largest American providers; Verizon, AT&T, Sprint, and T-Mobile have saturated the market recently with advertising claiming “blazingly fast” speeds on the nation’s first/fastest/most reliable/most advanced 4G networks.
Whether through Verizon’s copious use of lighting bolts and Hans Zimmer-esque music…
AT&T’s belief that depressed-looking cubicle workers with obnoxious laughs are amusingly convincing…
Sprint’s surreal, text-driven landscapes (replete with funky, get-stuck-in-your-head music)…
Or T-Mobile’s slanderous, Apple-derivative, hot chick vs. nerd ads…
…they all seem hell-bent on convincing anyone trying to watch four whole quarters of a football game that their dumb old iPhone, Blackberry, or Droid is horribly outdated and must be replaced immediately.
It took 12 years from 1991 to 2003, and billions of dollars spent during an economic boom to upgrade from 2G (20 Kbit/sec) to the very first 3G network (a more than 100x speed increase to 3.84Mbit/sec or more). 3G itself did not receive widespread adoption until 2007-08 when the development of new handsets with larger screens made the speed usable. And now we are being told that over about 2 years, during a severe recession, the same carriers have upgraded their networks to a place that is worthy of being called ‘4G’.
The reality is that not one of these carriers is actually offering a 4G network. In fact, not one provider in the world is offering one. 4G (officially a ‘4th Generation’ network) is described by the ITU (International Telecommunication Union) as a network that allows mobile devices to exchange data at or over 100Mbit/sec, and this technology does not exist yet for the public. In comparison, an 802.11G wifi network, which many people still have in their homes if they haven’t updated their wireless routers in a couple of years, runs at 54Mbit/sec; barely half the speed of a true 4G network.
Verizon currently boasts the ‘fastest’ 4G network available in the US. It’s average speed? 8 to 9 Mbit/sec, a paltry 2.3x increase over minimum 3G speeds and less than 1/10 the officially required speed.
What do all of those numbers really mean? Basically it means that wireless providers have rediscovered the best marketing tactic since ‘buy one get one free’. Namely that 4 is better than 3, and soon, 5 will be better than 4. It doesn’t matter if the data substantiates their claims or not. If Verizon says they have a 4G network, and are willing to put more than $3 Billion (their projected 2011 ad budget) into convincing the public that its true, reality is of little consequence. And soon, Sprint or T-Mobile, or one of the smaller providers will decide that they can win more customers if they have a 5G network, and the battle will start all over again on a new playing field. This idea, as a marketing strategy, has been around forever, but it was proven successful in its modern iteration by a somewhat unlikely source; razors.
The modern safety razor was invented in 1904 by King C. Gillette, and consisted of a single disposable blade set against a steel plate that exposed a very slim portion of the edge. MIT graduate William Nickerson perfected the production technique for thin, cheap blades and sales grew steadily before the US Army issued a Gillette razor to every soldier in WWI, essentially cementing the company as the premier shaving brand in the US.
Companies entered and left the market without dramatically altering the design of the system until 1965, when Gillette itself introduced the first replaceable cartridge razor, the Techmatic, followed by the first 2-blade cartridge razor, the Trac II, in 1971. Anyone who has paid any attention since is aware of what has happened… Two blades became standard, so a third was introduced. Schick responded with a 4th blade, which Gillette countered by adding a 5th and placing a 6th on the reverse side for ‘precision trimming’, whatever that means.
The escalating race for blades was so insane that a parody commercial for a 3-blade razor on Saturday Night Live in 1975 turned into a strangely accurate prediction of what was to come. And the situation got so ludicrously predictable, that a February 2010 press release was big news because it announced that Gillette’s newest razor system DID NOT have any more blades. Of course the official argument from all the parties involved was that more blades produced a cleaner, closer shave with less irritation (a non-scientific assessment that is often disputed, like here and here) but the reality is that marketing executives made the leap that 3 must be better than 2, 4 better than 3, and so on, and as usual, bigger meant better and American consumers validated their assumption.
However now, Gillette and Schick have been left high and dry. For decades, their customers have been groomed to believe that another blade meant a better product until we suddenly became aware that we were waiting for a razor with 6 blades and we began to call them on their bluff. They are still the only two major players in the game, but neither have any idea where to go next because the product cycle has to start all over again and they have to convince us that a new, currently unknown, set of criteria is what separates the good from the bad.
Both cell phones and razors bring us the core of the issue; creating products for good marketing strategies vs. creating marketing strategies for good products.
In both the examples above, the genesis of the idea was a good product. A razor with blades that did not need to be manually sharpened and provided a safe, clean shave, and a mobile communication device that allowed the user to do far more than simply make phone calls were both industry revelations that provided new experiences for consumers.
Over time however, a lack of innovation, or simply a lack of patience to allow for innovation, shifted corporate power from the hands of the product developer to the hands of the marketing team. Billions were spent on the assumption that C had to be better than B since B was better than A. With regard to the razor market, we are finally seeing a tempering of corporate enthusiasm for ‘bigger = better’, but only after they had exhausted nearly every derivative possibility and came dangerously close to becoming a joke to their own customers.
True innovation, whether in the creation of new products or the freshening of old ones, is the only way to capture and hold the attention of consumers. When a proposed marketing tactic dictates the development of new products, it can only be a matter of time before the bottom drops out, and the customer becomes aware that they are being deceived. In all honesty, this 4G, 5G, 6G strategy will work in the short term. Profits will continue to rise, someone will get promoted, a CEO will get a ridiculous severance package, and the battle for wireless supremacy will elevate to another level. But somewhere along the way, customers will realize that their 7G network really isn’t all that much better than their 6G, or for that matter their 4G, and the wireless providers too, will be left high and dry, searching for the next innovative product to build a marketing strategy around.
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