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In tech, convenience trumps completeness, and good enough is better than great. Just ask Cisco (Nasdaq: CSCO ) , which recently ceased production of the Flip camcorder. The iPhone has rendered the Flip all but irrelevant.
According to Apple's (Nasdaq: AAPL ) published specs, the iPhone shoots high-definition video at 720 pixels at 30 frames per second and includes audio. Specs for the most recent Flip say it would shoot hi-def at 720 pixels at 60 frames per second with video output as MP4 files. Not much difference for casual users, in other words.
Therein lies the problem. Smartphones in general and the iPhone in particular have become this generation's Swiss Army Knife, right up to the point that Flickr says that the iPhone 4 trails only Nikon's D90 SLR as a source for new photos and videos posted to the site, The New York Times reports. Cisco had no choice to but to flush the Flip.
The triumph of mediocrity
Can any of us claim to be surprised by all this? For all of Apple's talk of magical products, what makes the iPhone special is its App Store, price, and form factor. Carrying an iPhone is easier than carrying a separate camera, and easy matters. A lot.
If it didn't, the iPad would have been a disaster. Both Samsung's Galaxy tab and Motorola Mobility's (NYSE: MMI ) Xoom claim additional features, and Google's (Nasdaq: GOOG ) Android operating system is famously customizable.
You know what? For a lot of consumers, "customizable" is just a synonym for "difficult."
Apple isn't the only company to take advantage of this shift to simplicity. Staples (Nasdaq: SPLS ) pitches its office supply services as giving customers an "easy" button. Netflix (Nasdaq: NFLX ) gets away with not having the newest titles by pitching pervasive, all-you-can-watch streaming access.
Green Mountain Coffee Roasters (Nasdaq: GMCR ) may offer the best example of all. Sure, the company makes great organic coffees. But the real growth engine is the Keurig single-cup brewing system. Revenue from sales of brewers and cup refills rose 68% in the December quarter, and that's in spite of known issues with some systems.
Some tips for investing like a simpleton
The shift to simple has profound implications for us as tech investors. For one thing, it means re-evaluating what creates value. What do we look for if not quality? Try asking these questions when assessing the worthiness of new consumer technology:
- Does it solve an obvious, painful problem without creating more pain? Think of how Netflix simplifies streaming with its pricing and delivery model.
- Do substitutes offer more features, or more convenience? Remember, it's about delivering aspirin to those with headaches. Most often it's elegant design and not new features that provides the relief.
- Beware "customizable." Think of universal remotes. How many times have you been befuddled by all the options on these devices? Options are anathema to busy consumers who just want to find and watch a favorite program.
Here again, Apple offers a perfect example. The Mac maker isn't known for offering whiz-bang features in all its gear. Rather, the iPad and iPhone are best known for what they don't offer. The first iPad didn't offer a camera. It didn't offer a USB port. It didn't do a lot. But it did offer a big screen that made using it a lot easier on the eyes than the seven-inch tabs it was competing against.
That's why I'm not surprised to see the iPhone disrupting the camera and camcorder space. Who cares if the video is shaky in some spots? Baby Molly can't stop cracking up at how her dog eats bubbles. The iPhone is just as good any camcorder for capturing moments like these.
What other ways to do you see smartphones disrupting the tech industry? In what ways have you personally chosen convenience over completeness? Please weigh in using the comments box below.
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