Airbus deletes A380 from product line

Some product decisions have long time frames and extremely costly consequences. Aircraft manufacturers therefore spend considerable time studying the marketing environment to project future trends in travel and demand, before they develop and introduce a new jet.

Airbus spent billions to develop its double-decker A380 jumbo jet, betting that airlines would be ferrying large numbers of passengers from major hub to major hub. It was test-flown in 2007, receiving much publicity for its spacious interior and the amenities that could be added (such as on-board showers and luxurious first-class suites).

Airbus received some big orders from Emirates, among other airlines. In fact, Emirates is by far the largest buyer of A380s. But when Emirates cut the number of A380s in its latest order, and other orders slowed down, Airbus decided to discontinue this product after 2021. In fact, the 2020 coronavirus pandemic that brought international air travel to record-low levels seems to be accelerating the move away from A380s.

Competitor Boeing based its product decisions on a different forecast for the travel environment, believing that passengers would want to travel from point to point rather than hub to hub. It put the emphasis on nimbleness and fuel efficiency, rather than on having a high number of passengers being carried per flight. And that's attracted more buyers than the Airbus A380.

Now Boeing's original 747 jumbo jet is transitioning to a cargo carrier, extending the life cycle of this aging product. In addition, Boeing is still marketing its 777 and 787 jets to airline customers--and looking ahead with forecasts for the future of travel as it plans future product introductions.

Hello smart phone, goodbye camera, music player, sat nav . . .

The smart phone has become the go-to gadget for so many functions that it is pushing some established products into the decline stage of the product life cycle.

An article in today's Guardian lists a number of products and technologies that are in decline, thanks to the smart phone, including:

• Mobiles. Plain vanilla mobiles are increasingly uncommon. Within six months, 80% of the UK market will be using a smart phone, rather than an ordinary mobile. A fraction of UK consumers will resist smart phones and retain their mobiles, but this type of phone is clearly in decline.
• Landlines and pay phones. Who needs them? Landlines are more common than pay phones, of course. But even landlines are in decline as text takes over. As for the absence of pay phones, let's just say the Tardis will stand out in modern-day cities.
• Cameras. Sales of inexpensive, stand-alone cameras are really in decline as consumers point and shoot with their smart phones. However, upmarket, feature-rich cameras (such as the new smart cameras and specialty 3D cameras) may attract photo enthusiasts, even those with a smart phone.
• Music players. The Walkman is long gone, and sales of iPods are down, down, down. Apple's most recent results definitely show fewer iPod units being purchased, although a price cut for the iPod Touch has helped recent sales of that product. (Cutting price to prolong the product life cycle is a classic technique.) Smart phones are music players, so why carry an extra gadget?
• Portable tape recorders. Remember when reporters used small cassette recorders to capture what interviewees said? There's not much market for a separate recorder when your smart phone can record voice or any other sound.
• Netbooks. Small, portable, inexpensive. But now almost extinct.
• Sat nav devices. With free sat nav apps available for smart phone users, individual sat nav devices are losing market share. No wonder the biggest sat nav brands have their own apps.

When will UK laggards buy smartphones?

Above, the familiar graph showing how new innovative new tech products are adopted first by innovators, followed by early adopters, early/late majority segments, and finally--the laggards.

What about the pace of smartphone adoption in the UK market? According to experts, the smartphone will reach a penetration level of 80% by January of 2015. That means buyers from the late majority segment are currently adopting smartphones. By the time the laggards get around to buying smartphones, the market will be well into maturity and non-smartphones will be all but finished as mainstream products.

In the UK, smartphone users spend more time on their devices than users in other countries. Content providers are also affected by this penetration level, because more smartphones means higher demand for mobile entertainment, games, etc.

And thanks to this high penetration level, marketers like Sony, Apple and Samsung will be playing a replacement game, which calls for different marketing strategy and tactics (particularly pricing). These three brands accounted for about 75% of the smartphone market in the UK last year.

Already, Apple has debuted lower-priced iPhones, for example. Samsung and Apple are also adding new features (like biometric security) to attract consumers who trade up from older phones.

When will the UK market reach saturation? 

Marketing a 2015 product intro in 2014

Microsoft faces a tricky marketing challenge: How to market the expected 2015 launch of a new operating system (possibly Windows 9) without damaging 2014 sales of products with Windows 8.

From April, the company will withdraw support for Windows XP, once a highly popular operating system and still running on many legacy computer systems. That will push some Windows users to make decisions about upgrading or replacing. And Windows computers are still in great demand, despite the wide availability of competing Mac, Android and Chrome systems.

Yet Windows 8 sales have reportedly lagged. Critics want to see standardised gestures that will operate on different platforms (tablet or computer). They also want apps that launch directly from the start screen.

An entirely new operating system--with or without the Windows brand--could reset customer expectations and jumpstart sales. So Microsoft apparently will make a big announcement about the next generation operating system in April.

Does announcing a new product many months in advance build anticipation and excitement? Will existing Windows customers be willing to wait until 2015 for the new system? Will customers hesitate to buy a new Windows 8 product now because they know a new system will be released next year? Or will the lengthy prelaunch wait cause some customers to switch to competing products?

VW gears up for the future

Volkswagen's iconic camper-van, above, is not going to be part of the German company's product line for much longer. Because of the difficulty of adding airbags to protect all passengers, the van is being dropped in favor of newer models and technologies that will help in the drive for future growth. This is part of VW's long-term goal of becoming the world's number one automaker by 2018.

China is VW's most important market these days, so the company is boosting production of the Golf and other models to meet projected demand. It's also investing more heavily in its existing joint ventures inside China, where the ever-expanding middle class segment has the income to buy new vehicles.

Meanwhile, European car sales have been slow but as the economic recovery continues, volume is likely to rise. Thanks to VW's large portfolio of brands, it remains Europe's top-selling car company. Its truck brand, Scania, reports healthy sales as fleet operators get ready for stricter emissions rules.

Like other automakers, VW is increasingly active in engaging car buyers through social media. Its UK website has links to Facebook (404,000 likes), Twitter (63,000 followers), YouTube, and Flickr. VW US has a popular Pinterest board, as well.

Expanding the Angry Birds brand franchise

Angry Birds cartoon shorts debut this weekend, one zany new episode every week for a year. What new characters and plots could possibly be left for fans to discover, after 1.7 billion global downloads in three years? The YouTube channel for Angry Birds has more than 1 billion views and nearly 500,000 subscribers.

Now the brand is flying from mobile screens to big screens to extend the product lifecycle and make its name in broader entertainment. Parent company Rovio is releasing the weekly toons with selected TV partners worldwide, including Roku streaming. 

Consumers will need to update their mobile apps to see new episodes on the toon channel (accompanied by 15 seconds of advertising). Expect a torrent of brand-related offerings and revenue-generating opportunities now that Rovio has expanded its global advertising staff.

In advance of the first episode, Rovio changed its Angry Birds iPhone/iPad apps from fee to free a few weeks ago, attracting millions of new users and rebuilding buzz about the brand. A second season of cartoon shorts will soon be in the planning stage, and a feature-length movie is also in the works, possibly in theatres as early as 2016.

How strong is the Angry Birds brand franchise? Rovio aims to find out as it continues to approve new licensing deals and expand beyond the mobile game category. Stay tuned.

Rovio and birds and Alex

Angry Birds has been downloaded more than 1 billion times. Parent Rovio has introduced a new Pink Bird character and is adding seasonal variations every few weeks to keep players engaged with the game. There are lots of merchandising deals in the works and Angry Birds is likely to remain popular for some time. It's not easy to know when a product has reached maturity, but Rovio is determined to extend the product life cycle and make Angry Birds a brand as long-lasting as Hello Kitty.

Meanwhile, Rovio is readying another brand franchise. It released its first non-Angry Birds game in June: Amazing Alex, about a boy who thinks up creative ways to do things based on physics principles. And of course players get to help! Rovio bought the basics of this game from two developers who had originally called it Casey's Contraptions. Alex has been received well so far, but will it have the long-lasting appeal of Angry Birds?