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Will Peek's Simplicity Pay Off?

9:58 AM Tuesday September 16, 2008

Tags:Disruptive innovation, Product development

You want to surprise people in your office? Ask them to estimate the percent of U.S. mobile phone subscribers who use email on their phones. Depending on who's doing the estimating, the figure ranges from seven to 13 percent .

A startup company called Peek looked at those figures and saw disruptive opportunity. After all, one of the most powerful ways to create new growth is to expand markets by making consumption simpler, more affordable, or more convenient.

Peek_Red_small.JPG
This week, Peek's first product appeared in Target stores. The simple device, designed by product design powerhouse IDEO, costs $99. It allows users to send and receive email using T-Mobile's wireless network for $19.95 a month. And that's it. No phone, no wireless Internet connectivity, no attachments. Just email.

Will Peek follow the Apple iPod or Pure Digital Flip video camera--both elegant devices that have grown markets through simplicity--on the road to disruptive success?

Reviewers suggest it delivers on its promise of making mobile email simple. David Pogue from the New York Times wrote, "If you get lost on this machine, heaven help your encounters with an A.T.M."

The critical question is why so many people don't send email messages on their mobile phone. If they are truly scared off by complexity, hard-to-use keyboards, or overpriced data plans, Peek has a chance of success.

There's another explanation, however. Perhaps the need to send email away from the office or home actually isn't that important to the mainstream consumer. In other words, they reason why they aren't consuming is not because existing solutions don't get the job done; it is because the job simply isn't that important to them.

My hunch is that much of the non-consumption in the market actually results from disinterest, inhibiting Peek's chances of success.

Even if it turns out that there is a huge pool of hungry non-consumers, however, Peek might be in trouble.

The company is following a business model--device plus monthly subscription fees--that looks very familiar to mobile handset manufacturers and wireless operators. If Peek's handset were significantly cheaper or if Peek featured no monthly charges, the company would increase its chances of success.

Perhaps Peek is already working on a second-generation device encased in a truly disruptive business model. If not, even if Peek does pioneer a market, expect growth hungry handset manufacturers and operators to figure out ways to mimic Peek's approach. While that would be a good result for consumers looking for simpler, cheaper devices, it would be bad news for Peek's chances of long-term prosperity--unless of course a market incumbent decides to pay a hefty premium to buy Peek!

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Comments

Device divergence instead of device convergence, and interesting idea...

Good point about the business model: following the same device cost + monthly fee leads people toward directly comparing it against mobile phones, Wifi laptop access and other comparable "remote data access plan". But the greater opportunity is to think of access to mobile data as something completely different, perhaps a a true "peek" into what is out there?

Perhaps a better business model is to scrap (or reduce even further) the monthly fee and just make it pay-per-use, with a very cheap device price to get it into people's hands.

I understand that one of the lessons from mobile data is that it is difficult for people to understand the prices of KB and data delivered over the network, but what if the price was simply per-email? Or per-email read? Provide a "peek at the in-box to see what is there, then pay extra to actually read the messages?

Perhaps the greatest lesson from the low adoption of mobile email is that people use email differently while mobile, and thus the entire model (device + service + pricing) needs to be different to fit the use.

Price the service using terms that easily convert to the way people use it.

- Posted by Taylor Davidson 
September 16, 2008 3:34 PM

Three examples come to mind:

1. Blackberry's first model(s). No phone, only e-mail. At some point they realized that if you are carrying this device with you, you might as well be getting your phone calls on it. The first voice-enabled blackberries didn't work that well. Current ones do. People will not carry two devices.

2. Simplify to e-mail only with no attachment? This reminds me of the network computer. How about a simple device that can only connect to the Internet, and nothing else? Huge promise--great disappointment... Instead of paying $200 for a network-only device, you might as well pay $300 for a full PC (albeit entry level one) and get everything else.

3. At least they didn't follow the Metricom/Ricochet model, using a proprietary protocol and network, but rather used an existing network and protocol set.

Conclusion: not going to happen.

Yoram.

- Posted by Yoram Solomon 
September 30, 2008 4:24 PM

I'm not sure I understand the value that this product is offering to consumers. In fact, it seems like a step backward from the perspective of service offering. I can't think of a good reason why one would buy an email-only device, and then carry a separate device for phone, and another for music. I am a big fan of IDEO, and I am sure they brought design features to the product, but probably not to the service! I think this will not fly.

- Posted by Prasanna Govindankutty 
September 30, 2008 9:45 PM

The device seems to follow Don Norman's "Information Appliances" approach, where instead of convergence that leads to unusuable products (Phone+email+digital camera+WAP), you have separate devices designed explicitly for the task at hand leading to greater usability.

I have no doubts that the Peek will work like a charm (and I like the design too!), but I agree with Scott Anthony that it needs a disruptive business model to succeed (like dropping the monthly rate). Otherwise the target group is too narrow - serial emailers are mostly technologically literate enough to use a Blackberry.

- Posted by Bill Papantoniou 
October 1, 2008 2:02 AM

Poor strategy - the use of email will soon die out! How many 15-25 year olds use email? not many. Most use internet based services to communicate with friends / colleagues.

How important is email for consumers in their personal lives? not very.

What about work email? Well, we are are the cusp of a revolution in the workplace where email will soon become less and less important.
The mobile phone is becoming our central information hub, people want more information, but only when they need it, and they need the experience to be simple, not the capabilities.

This is a bit like introducing a new fax service in the late 90's, when email was about to take off.

- Posted by Rob Gray 
October 1, 2008 3:42 AM

The idea is GREAT and the business model steps into OLD THINKING.

I guess what is needed are the same kind of innovative ideas to generate business as IDEO has given the design of the device.

My ideas (a few out of many) would be:

1. arrange add-on service with national mobile phone service providers

2. Sell together with "normal" phones (as only about 10% are using e-mail)) that could be down-designed (also considering the price)

3. Give it away to early adopters for free (checking out the behavior and spreading-the-word)

4. Promote the use of it through celebrity promotion

5. Sell it with the proposition of saving valuable time (as the email handling as fairly easy and fast)

6. Free wireless use at T-Mobile hotspots through buying service (eg. in a café) that pays off the bill

......lot's of more ideas come to mind while writing.

Love to conduct a workshop on Skype to find more innovative ways to get to a win-win-situation that suits the customer and the company (and other stakeholders, as well).

What do you think?

Cheers,

Ralf

PS.: Just send me a private message-

- Posted by Ralf Lippold 
October 1, 2008 5:06 AM

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Scott Anthony

Scott D. Anthony is the president of Innosight, an innovation consulting and investing company with offices in Massachusetts, Singapore, and India. He has consulted to Fortune 500 and start-up companies in a wide range of industries. During 2005–2006 he spearheaded a yearlong project to help the newspaper industry grapple with industry transformation (Newspaper Next).

Anthony is the lead author on The Innovator’s Guide to Growth: Putting Disruptive Innovation to Work (Harvard Business School Press, 2008). He previously coauthored (with Harvard professor Clayton Christensen) Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change (Harvard Business School Press, 2004).

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