The Question Is at What Cost?
Something has really been bothering me about Apple’s announcement that they were killing the AirPower charging pad. Here is what was released by Apple’s Vice President of hardware engineering:
“After much effort, we've concluded AirPower will not achieve our high standards and we have cancelled the project. We apologize to those customers who were looking forward to this launch. We continue to believe that the future is wireless and are committed to push the wireless experience forward." —Dan Riccio
What bothers me is that I’ve never seen a company allow a product to get to marketing prior to R&D testing being done. Most companies follow a gated review process whereby in order to make it to the next step in the process, everyone agrees that the prior objectives have been met. One of those gates involves safety and reliability testing.
When I was at Gateway computers, we never would have dreamed to let marketing draw up advertising or product packaging with a product that hadn’t fully been through the review process. Short circuiting that process gets you glitchy quality nightmares like Tesla. The company I work for now makes medical products. Even discussing bypassing the testing gate would probably get you fired.
And yet, formal buttoned up Apple, somehow allowed a product to get to pre-announced status and pictured on product testing?
I think everyone is misinterpreting Dan Riccio’s statement. He only said “high standards”. He never said “standards of quality”.
I do believe that Apple ran into a problem with heat in the coils. But I also believe that Apple had a fix for the problem and could have delivered the product. Hence, the follow-through from marketing.
What makes the most sense to me is that the product was killed by pressure from the finance group. Whatever fix that Apple had designed would have either pushed the price too high or margins too low.
I’ve been the skunk at the party when I’m involved with new product margin analysis and had to deliver the sobering news that the product isn’t going to make any money. The sales and engineering groups never want to hear that. Usually this news is delivered up front before hardware prototype testing is involved.
But if late design changes force the finance group to step in late in the game, then what happened at Apple is exactly what I’d expect to see. Especially if the other groups tried to hide the design changes from finance as late as possible.
When Dan Riccio made the statement about not meeting Apple’s “high standard”. I think he meant high standard for financial return. Even if Apple says otherwise. I wouldn’t believe them. Only because they’ve taken an enormous amount of heat lately for their lofty iPhone pricing structure. The last thing they want is to launch a $300 charging pad or word to get out that they killed a product because they refused to settle for less than a 40% gross margin.
When I was at Gateway computers, we never would have dreamed to let marketing draw up advertising or product packaging with a product that hadn’t fully been through the review process. Short circuiting that process gets you glitchy quality nightmares like Tesla. The company I work for now makes medical products. Even discussing bypassing the testing gate would probably get you fired.
And yet, formal buttoned up Apple, somehow allowed a product to get to pre-announced status and pictured on product testing?
I think everyone is misinterpreting Dan Riccio’s statement. He only said “high standards”. He never said “standards of quality”.
I do believe that Apple ran into a problem with heat in the coils. But I also believe that Apple had a fix for the problem and could have delivered the product. Hence, the follow-through from marketing.
What makes the most sense to me is that the product was killed by pressure from the finance group. Whatever fix that Apple had designed would have either pushed the price too high or margins too low.
I’ve been the skunk at the party when I’m involved with new product margin analysis and had to deliver the sobering news that the product isn’t going to make any money. The sales and engineering groups never want to hear that. Usually this news is delivered up front before hardware prototype testing is involved.
But if late design changes force the finance group to step in late in the game, then what happened at Apple is exactly what I’d expect to see. Especially if the other groups tried to hide the design changes from finance as late as possible.
When Dan Riccio made the statement about not meeting Apple’s “high standard”. I think he meant high standard for financial return. Even if Apple says otherwise. I wouldn’t believe them. Only because they’ve taken an enormous amount of heat lately for their lofty iPhone pricing structure. The last thing they want is to launch a $300 charging pad or word to get out that they killed a product because they refused to settle for less than a 40% gross margin.
RSS Feed