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The Power of Tying Services to Products

Consumer marketers speak of “Moments of Truth”. I had one last night. I walked the dog in the evening and, later, when I went to put my iPhone on the charger, the phone and its holster were gone. The phone was set to silent. Merde! I retraced my steps with another phone and a flashlight, calling mine, but no joy, and finally went to bed worried that my iPhone would be toast by morning.

At 3am I woke, remembering that Apple’s MobileMe service has a “find my iPhone” button. I fired up my laptop, poked the link, and found two functions: you can tap the phone’s location awareness and see it on a map, and you can make your phone ring for 2 minutes, over-riding silent mode. I did the latter and headed back out with flashlight. In 30 seconds I found the phone, lying in the street, invisible on black pavement I’d searched before, placed just right to be crushed by my neighbor’s car the next morning. $600 and an hour of set-up saved.

My car has a link with Google Maps. I can find an address on Google on my PC, and then send it to the car with 3 clicks. It comes via satellite and loads into the nav system. I just tell the car to “go there” and navigation starts, by-passing the worst part of car nav systems: entering the address. For me this adds a lot value to the car.

You might be thinking: “this guy likes gadgets”. That would be fair. But, there’s a good business selling to people like me, and in 3-4 years products trickle from early adopters to big markets.

Cross-ruffing products and services is a big force in the consumer tech mainstream. The combination of iTunes and iPod gave Apple the lion’s share of the MP3 player market. The Apple App Store may reprise this success. Google gets this and is coupling an App Delivery service with its modern, open Android OS to challenge for leadership of the smart phone market. These services typically don’t make much money, but they leverage the volume and competitiveness of other products (iPods and iPhones for Apple) or services (search and related ads for Google) that make big money.

And these arrangements are subtle and complicated, hence hard to copy. No one has been able to compete with Apple in on-line music (Microsoft failed badly). It takes a Google to effectively attack the app store; RIM is trying and looks to be way off the pace.

Service/product ties create new and powerful ways to win. Every company with a relevant service, or product, should be asking how they take advantage of this, via development, or, more likely, partnerships. Ford announced at CES this week that it is partnering with Pandora and Stitcher to integrate their mobile web entertainment services into most 2011 Fords. This is smart, and a sign of many things to come.