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Innovations to watch - 2005 7 March 2005
Each year since 2001, I’ve highlighted a few new offerings that may be on the point of making the leap from small appeal to large appeal. These are personal choices -- products and service innovations that I find particularly interesting. Some are obscure, others well-known.
Last year was a relatively uneventful year for new products. This year, however, is shaping up to be a very exciting one, with several major new products and a number of fascinating service approaches.
I’ll review this list late in the year, to see what became of the products and services that seemed so interesting in the first months of 2005.
Here are my five innovations to watch in 2005, three products and two services:
Products:
1. Airbus A380 2. Nintendo DS 3. Sony PSP
Services:
1. Skype 2. YourEncore™ consulting services
We’ll look briefly at the products this week; next week we’ll look at services.
1. The Airbus A380
Airbus A380
On 18 January, Airbus launched the largest production plane ever built and the first new jumbo jet in more than thirty years. The Airbus A380 has two floors of passenger seating. It can carry 555 passengers in a three class configuration, and as many as 840 when configured for maximum carrying capacity. Boeing’s 747, the only jumbo jet that competes with the A380, typically carries 416 passengers.
The product is remarkable as much for the company behind it as for its technical specifications. Airbus is the corporate combination of over 20 European aerospace companies, partially funded by the governments of Europe. After a balky start in the 1970s, Airbus has come to lead the industry, eclipsing Boeing in total number of planes delivered in both 2003 and 2004.
Airbus functions both as an economic and political organization, and the development and production of the A380 reflect this. Major components of the A380 are manufactured in more than 15 factories throughout Europe, and then assembled in a large facility in southwestern France.
The A380 will give Boeing competition in an area that it has monopolized for decades. Sales of Boeing’s 747, first introduced in 1969, will inevitably decline. In 2004, Boeing recorded 10 orders for its jumbo jets. So far in 2005, there have been none.
Boeing is the dog that didn’t bark in this story. It maintains that there is not sufficient demand for a new jumbo jet, and has focused its product development efforts on a fuel efficient midsize plane, the 7E7 Dreamliner, which will connect cities that don’t have enough traffic to warrant a larger plane.
Only time will tell whether Boeing is correct, or whether the A380 will be able to justify its $16 billion in development costs. Regardless of its future economic success, Airbus’ A380 represents a dramatic embodiment of new approaches in both technology and organization.
2. Nintendo’s DS and Sony’s PSP
Nintendo has monopolized the $1.6 billion handheld game market since it launched its first Gameboy in Japan in 1989. In contrast to Boeing’s “wait-and-see” response to the A380, Nintendo has been very aggressive in countering Sony’s recent move into handheld games. For example, it pushed up the North American launch date of its new handheld platform, the DS (for Dual Screen), from winter 2005 to mid-November 2004.
Sony’s PSP, on the other hand, has had a troubled development history. After a number of program delays, the product is scheduled to launch in North America on 24 March 2005. It launched in Japan on 12 December 2004, and Sony has already shipped 800,000 units.
Both of these products are very sophisticated technologically, with stereo sound and wireless capabilities. The big differences come in design intent. Shigeru Miyamoto, Nintendo’s Senior Managing Director and a gaming design legend, described Nintendo’s development objectives to The New York Times:
"We were trying to create something you hadn't seen before."
The DS is purely a game console – its two screens are intended to open up a whole new set of gaming possibilities. The PSP is a game / music / video player, using proprietary Sony standards to capture full-length movies in a new format called UMD.
The two approaches are so different, it’s hard to predict who will win. The PSP is like a luxury automobile; the DS more like a hybrid. Still, the two systems will compete in the same market, which is currently dominated by Nintendo. The last time Sony found itself in this situation, it scored a huge hit with the Playstation.
These Gameboy wars will have a major impact on the performance and direction of both Sony and Nintendo. We’ll have a ringside seat throughout 2005.
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