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The Digital Lifestyle Wars

  |  March 21, 2001   |  Comments

As the computer age loses momentum to the digital age, Microsoft, AOL/Time Warner, Sony, and Apple are laying the groundwork for a third major computing war that may spark an economic turnaround in the tech sector.

"The PC has matured into something boring." Or so says Wall Street Journal columnist Walter Mossberg.

And maybe he's right. The tech market is in the toilet. PC sales are lagging, with virtually every hardware player in the business issuing earnings warnings. Is this the end of the road? Have we solved all the problems that need to be solved by the PC?

I say no. All we need is a good war to get things back on track.

Please indulge me as we oversimplify computing history for a moment. It is generally acknowledged that the computer as we know it today was invented around 1975, so let's call the period between 1975 and 1980 the Prehistoric Age of Computing.

The Computer Age

In the early '80s, with the widespread adoption of word processing and spreadsheets, the computer became a mainstream business tool. Apple revolutionized the graphics and printing industries with the introduction of the Macintosh in 1984, which quickly led the way to desktop publishing. We'll call this era the Golden Age of Productivity.

In the late '80s and early '90s, our economy hit a recession, and sales of personal computers were lagging. The future of the computer industry was in question. And then along came the Internet and the birth of the second Golden Age of the Computer.

If this is all sounding a little familiar, you're probably a Mac loyalist and heard Steve Jobs' keynote address at this year's Macworld Expo in San Francisco. I'm borrowing some of Jobs' terminology and vision to make a point. (If you've never heard any of it before, forget I said anything about Jobs.)

So far, each golden age of computing has been marred by a long and fierce war. During the productivity period, a great battle was waged over who would own the desktop and operating system. At the dawn of the Internet age, a second great confrontation erupted: the infamous browser war. In both cases, the winner was the same company: Microsoft.

The Digital Age

Now we stand on the verge of the third golden age of computing. Jobs calls this coming revolution the Digital Lifestyle.

Cell phones are everywhere. MP3s are the driving force behind a revolution in the music industry. New platforms for accessing the Internet are beginning to become a reality. Personal digital assistant (PDA) sales have gone through the roof. Digital cameras accounted for 15 percent of all camera sales in the U.S. last year. In a country of 281 million residents, 320 million recordable CDs were sold last year.

The personal computer is one of several devices that will be fighting in the war to reign as the digital "hub" of this golden era, adding tremendous value to all of the other devices. The PC is certainly in a strong position to win this battle, but there are several other contenders: the TV/set-top box and the gaming console.

Star Wars

To be at the center of the home network is to be at the very center of the Digital Lifestyle. To be the one resource that everyday Joes rely on every moment of their daily digital lives. And to control practically every communication -- and, yes, that includes marketing communications -- that makes it into the household.

Apple is one of several companies that will participate in the third major computing war. The other big guns entering this war are the usual suspects: Microsoft, AOL/Time Warner, and Sony. Clearly, these are not the only players. Sun, for example, may yet make an impact through Java and its lighter-weight cousin, Jini.

In fact, it seems that one by one every hardware manufacturer in existence has announced its company's intention to make a play for this arena. But the four aforementioned companies each have a unique edge, putting them in the best position to emerge as the superpowers.

Microsoft is Microsoft. It owns the desktop and the browser; it has introduced (on its third try) a stable and growing handheld computing platform; and it owns one of the pioneers of interactive television: WebTV.

Microsoft recently reorganized WebTV to be part of the MSN umbrella and has opened a new San Francisco campus for its TV products. UltimateTV, if it can ever get out the gate, is poised to ignite a TV-viewing revolution, combining TiVo-style PVR functionality with the connectivity benefits of WebTV. The software giant is renowned for nasty business tactics and unfathomable marketing power. But it lacks innovation. Bill Gates and Steve Ballmer will scream in opposition, but it's true.

AOL/Time Warner is formidable. AOL is the biggest Internet service provider in the world and controls the largest "walled garden" content arena in existence. Time Warner brings an offline media powerhouse to the mix, and -- to put it bluntly -- the combination is scary. AOLTV is a very serious player here, but we must also remember that AOLTV is only a small piece of the AOLAnywhere strategy.

Sony is an innovator. This is the company that brought us the Walkman and the PlayStation. It has significant media assets ranging from major-league movie studios to enormous record companies. Sony has broken new ground time and time again with industrial design of consumer electronics and personal computers. More than a year and a half ago, when the rumors first started circulating about PlayStation 2 (PS2), visionaries were already placing the device at the center of the home network. And this might be the kicker. Sony knows how to sell consumer electronics devices. None of the other front-runners listed here compare to Sony when it comes to marketing savvy in this field.

Apple is the square peg in the round hole. How can a company hope to compete with just 12 percent of the personal-computing market share, no significant media assets, and no existing consumer electronics products?

Like Sony, Apple is an innovator. This is the company that launched desktop publishing. It created the PDA category. Apple's industrial design group is nothing short of ingenious. Look at what the iMac has done for the consumer electronics market. Love it or hate it, you can't buy anything anymore that doesn't come with a clear molded plastic coating and is available in five fruit flavors.

And Apple is at it again: It's the first computer maker to ship a desktop computer that comes with a built-in DVD burner that can write DVDs that are playable in most consumer DVD players. Digital graphic design gave us desktop publishing. Imagine what digital home video production will do?

What Does This Mean to Advertising Technology?

Nothing right now. But I think it's very important for us as marketers to pay attention to developments in this arena for several reasons:

  1. The company that controls the center of the home network becomes the gatekeeper of communications into and out of the home.

  2. We must familiarize ourselves with the ways in which consumers use digital devices so we can effectively market to those consumers.

  3. Savvy marketers will be able to identify opportunities to experiment early on, giving them an edge when competitors get up to speed. Leading marketers will have the opportunity to help shape ad models and communication streams.

  4. The line separating online from offline continually becomes more blurred. In the near future, we will not be online marketers, we will be digital marketers.

  5. Who doesn't love a good, geeky gadget?

No shots have been fired in this fast-approaching war. The combatants are laying the groundwork and training the troops. The Digital Lifestyle may well spark an economic turnaround in the tech sector, and the war will not be far behind.

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ABOUT THE AUTHOR

Jeremy Lockhorn

Jeremy Lockhorn leads the emerging media practice (EMP) at Razorfish. The team functions as a think-tank on new technologies and next-generation media, and operates as an extension of current client teams. EMP is focused on driving groundbreaking marketing solutions for clients. Jeremy is a filter, consultant, and catalyst for innovation - helping clients and internal teams to understand, evaluate, and roll out strategic pilot programs while reinventing marketing strategies to leverage the power of emerging media. Jeremy joined the agency in 1997 and is currently based in Seattle, WA. His Twitter handle is @newmediageek.

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