Tuesday, September 18, 2012

No one has ever had to sleep on the couch for buying an iPhone

Despite a general lack of awe and surprise (and in some cases disappointment) after the announcement, Apple sold a record number of iPhone 5 devices on the first day they were generally available. My impression was that this iPhone announcement had the least "bang" to it when compared to ones past. Competitors are seizing on this sentiment and publishing advertisements mocking the device and its feature set.

Apple does appear to have a solid, marketable device in the iPhone 5; so, why the disconnect between the post-announcement sentiments and the record sales? The old sales axiom comes to mind: "No one ever gets fired for hiring IBM". Here's what I mean.

When the iPhone first came out, it was seen as a smartphone with a high-quality "it just works" web browser. That, combined with its nice build and touch-first story led many enthusiasts to jump on it, even though the base price was $499. That's expensive for a phone that was kind of slow, lacked 3G, and didn't even have an app store at launch. As Apple revved its iPhone offering annually, they improved the build quality, lightened the phone, made it lighter and sleeker, and most importantly brought the price down.

In addition, Apple launched the app store in mid-2008 (around the time of the iPhone 3G launch) and pushed its platform to developers. Devs initially responded with the fart apps and simple games, but soon higher-quality apps and games began to show up on iPhone screens.

It took a while, but other phone manufacturers did pivot and did revise their hardware designs and software platforms. Recent offerings from Samsung and Nokia show that you can get a nice, sleek, quality phone outside of Apple. And, browsing the Android and Windows Phone app marketplaces shows that a lot of the popular apps are available today across multiple platforms.

So where does that leave Apple and their loyal customer base? Besides brand loyalty and inertia keeping people on their platform, we have the axiom above. Or, adjusted to fit the situation: "No one has ever had to sleep on the couch for buying an iPhone". 

Customers are not buying iPhones just for the hardware quality or the current apps. They are also buying them for the future apps that will be released on the device (often first available on iOS). Apple boasts having sold 400M iOS devices, is projected to have sold 1B by 2015, and has over 700,000 apps available for purchase and/or download. These numbers draw more and more developers into the fold.

As a result, Apple has is this aura of safety. "Buy us," they imply, "and you'll get all the apps your friends have." Or don't, and risk your significant other complaining that his or her phone can't get the cool app that everyone else has.

Sure, other platforms have differentiated app experiences that are not available on iOS, but given the install base that Apple has, some level of iOS integration with competing applications is inevitable.

For competitors to succeed, they'll not only have to match or exceed Apple's hardware designs, build quality, dev platform, and app library. They'll also have to shake this notion that iOS == future proof and other platforms == app envy. Until then, the fear of sleeping on the couch will remain.

Wednesday, September 05, 2012

How Dollar Shave Club Is Ripping You Off

I'm a man. Like many men, I shave my face on a fairly regular basis. And, like many men, I purchase disposable safety razor cartridges that attach to handles for shaving. Now, these cartridges don't come cheap, especially the newer, multi-blade, aloe enhanced, buzzing kind.

One day, thanks to the power of social media and a viral video, I discovered Dollar Shave Club. What a snarky company! What a funny video! And they send you cheap razor cartridges every month for way less than what the big names charge! What's there not to like?

Plenty, it turns out.

You see, Dollar Shave Club resells cartridges* made by a South Korean company by the name of Dorco. Dorco also sells cheap cartridges directly to consumers. And they do so at way better prices than Dollar Shave Club.

Here's an analysis of Dollar Shave Club's pricing.
Option Package price Price per blade
The 4X $6.00 $1.50
The Executive $9.00 $3.00


The Dollar Shave Club cartridge prices includes shipping, handling, and a free handle.

Here's an analysis of Dorco's pricing.

Option Package price Price per blade
The 4 blade system $24.74$0.95
The 6 blade system $25.00 $0.96

The 4 blade system is a combo of a 4 blade razor handle and a multi-pack of blades plus basic shipping. The 6 blade system is a combo of a 6 blade razor handle and a multi-pack of blades plus free shipping (minimum $25). The 4 blade system cost goes down if you buy a bit more to bring the total above $25 to earn free shipping.

What bothers me about this is that Dorco and Dollar Shave Club are selling the exact same thing. It would be one thing if Dollar Shave Club were selling a product direct to consumers that consumers couldn't otherwise get at retail. But Dorco is selling the exact same product directly to consumers that Dollar Shave Club is selling. Dollar Shave Club is taking that product, slapping a little marketing snazziness on top, and charging way more. The only difference I can see is that Dollar Shave Club makes it easy to purchase a small amount of blades and get a free handle (with the hope you'll stick to your subscription), whereas Dorco encourages (but doesn't require) you to purchase $25 to get free shipping. Not a significant difference in my book.

You may be doubting that Dollar Shave Club sells Dorco blades. But they are the same as far as I can tell. Here's a picture that I took recently. On the top is Dollar Shave Club's "4X" handle and blades. On the bottom is Dorco's equivalent. The only reason Dollar Shave Club's lubrication strip is a different color is that I used the blade once right before taking the picture.



So, if you're interested in Dollar Shave Club, my advice would have been to save yourself some money and buy Dorco blades. But my advice is actually to save your face and avoid these blades completely. They're not that sharp, they drew blood every time I used them, and they're just not worth it. Go with something tried and true that's still fairly cheap (like those classic Sensor blades) and your face will thank you.

*Dollar Shave Club sources their 4- and 6-blade cartridges from Dorco. I'm not sure where they get their 2-blade cartridges.

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