Diminished revenues, lost market share, and increased R&D spend make being late to market hard on the bottom line. Companies playing catchup to market leaders have little room for error, and a product launch delay is most often a King Kong sized error. History shows us the downfall of this mistake over and over again yet seemingly smart companies keep mismanaging the clock and ultimately, their opportunity. Let’s look at three examples of companies who made the same mistake at the worst possible time – when they were struggling to find relevance in their market.
Cypress Semiconductor Exits the CPLD Business
In the late 90’s, the programmable logic business (FPGAs and CPLDs) was dominated by Altera, Xylinx, and Lattice. Cypress had a precarious 2%-3% market share and were banking on their newest offering, the Delta39K, to gain ground on the market leaders. Announced in 1999, the opportunity was there with the right product at the right price point.
Unfortunately, the Delta39K was delayed by several months due to “feature creep” – a fatal mistake that contributed to Cypress exiting the CPLD business altogether in 2003. The irony was that when I visited Cypress in 1999, I listened to a guest lecturer present “the perils of being late to market” to their development organization. That lecture did not go over particularly well for some reason.
Microsoft Enters the Tablet Market Late
It is hard to call a giant like Microsoft an underdog, but in the context of the tablet market the description fits. We all know the story of how Apple defined the tablet market and sold about 100 million iPads through 2012. In early 2010, about the same time the iPad entered the market, Microsoft made the decision to shut down its very bold Courier tablet project.
The Courier could have been a very fast answer to the iPad and helped Microsoft get some significant early market traction. The downside was that it got in the way of the long-term Windows strategy laid out by the head of its Windows division, Steven Sinofsky. Steve Ballmer made the decision to pull the plug on Courier knowing they were two years away from a competitive Windows tablet. Ballmer underestimated the potential of the tablet market and overestimated the future of netbooks.
While Microsoft patiently executed their strategy, the world bought up billions of dollars worth of iOS and Android tablets. Today, the uphill climb to tablet relevance is steep for Microsoft, and Ballmer admits that they were late to the tablet party. There are plenty of companies who find success being a fast-follower in a new market, but few companies succeed being a slow-follower.
Research in Motion’s Habit of Being Late
In 2009, life was good for RIM who enjoyed a comfy 44% market share for smartphones. RIM helped define the smartphone market, a market that saw more than 1.7 billion units shipped in 2012. Unfortunately for RIM, their market share in 2012 slid to around 5%.
As a market leader back in the day, RIM lived in a world of denial and complacency best exemplified by their former CEO’s quote that “The iPhone was great for the Blackberry! People came in looking for an iPhone and walked out with a Blackberry.” When the tailspin became undeniable around 2011, RIM had no room for error if it was to remain relevant in the smartphone market. RIM needed a fast response to Android and iOS devices. The Blackberry 10 was RIM’s answer and, possibly, their last hope.
Alas, RIM delayed the Blackberry 10 product launch by several months, missing Xmas 2012 before launching in Q1 2013. While the fate of RIM has yet to be written, history tells us that RIM did not have the luxury of time on their side.