Cheap PLM and iPhone 5C thoughts…

Brands are important. Especially when it comes to market differentiation. Examples of brand differentiations are around us. Some car manufacturers created luxury brand cars, most of electronic product lines have special product lines, consumer product brands are also using brand differentiation strategies.

My attention was caught by seekingalpha publication – Can Apple Succeed Balancing Cheap With Premium? Have a read and make your opinion. iPhone 5C (Cheap?) is coming. Apple is thinking how to compete with other mobile device alternatives and seeking how to to create brand differentiation. The challenge is how to find a valuable configuration to sell in parallel to current premium iPhone device. I picked up an interesting passage:

Even mobile phone design seems to have stopped. If I told my grandfather to take his spectacles off and tell the difference between an S4, a Z10, an iPhone 4, iPhone 5, Moto X, HTC 1, Xperia, Ascend … he would not be able to find one!

As I mentioned earlier in the article, the pace of technology has slowed and OEM’s are continually pipping each other in aspects that don’t matter that much to a consumer. Take the screen, LCD, AMOLED, PMOLED, SUPER AMOLED, SUPER DUPER AMOLED, EXTREME SCREEN SUPER DUPER ULTRA LED…..I stopped caring past the iPhone 4. The screen was crisp and brilliant and to be honest, I really can’t see much difference when looking at the screens of different phones. As long as I can watch an HD movie on it, this seems to be the benchmark.

It made me think about PLM vendors trying to create brand differentiation and sell PLM to both largest OEMs (Airbus, Boeing, Toyota, etc.) as well as to zillions of small and medium size companies. The last group of customers created significant challenge practically to all PLM vendors. These group of customers are experiencing similar type of problems as large OEMs – cost pressure, high complexity of products, quality and regulation issues. At the same time, these companies are not ready to implement (and pay) for complex PLM systems. The solution provided by PLM vendors these days are in range of ignoring small companies to provide “boxed” pre-packaged PLM configuration.

What is my conclusion? PLM is failing to create scalable brand differentiation with solutions scaled from small manufacturing firms up to large enterprises and OEMs. Most of functionality required by smaller companies is similar to what you would provide to large companies. It is hard to differentiate, it is hard to price and it is hard to afford selling it as cheap PLM. On the other side, consumerization of IT and emerging startups can create a pressure on PLM vendors to find alternatives for ‘cheap PLM’ sooner than later. Just my thoughts…

Best, Oleg