Qualcomm and Intel: Why are industrial companies so bad at consumer products?

Qualcomm is trying to bring out consumer products, and failing — Flo TV, and more on the way. There’s nothing wrong with initiatives that fail, especially when you are as rich as QC, but they are making systematic errors. Intel got burned early in its history trying to do digital watches, and learned from the experience – it has never had a direct-to-consumer product since then, though it has done plenty of brand-marketing campaigns. Qualcomm seems intent on repeating its errors, without learning from them.

I asked a deep-thinking friend, Jim Cook, about this, and here’s his response. He is even more negative than I was!

Industrial companies are built on rationality, non-commodity consumer companies are built on empathy.  These epistemological predilections invade and bias the functioning of  the corporation – R&D needs to shift from cost/performance to fad and fancy, Finance needs to shift from predictable to volatile, Manufacturing has to shift from plans to whim response.  Unless you either separate them completely (resource allocation becomes the major problem, not to mention confusing capital markets), you’re destined to have internal destructive struggles.  One can point to Apple as a counter example, until one realizes that Apple, from its origins, has been a cult satisfier (no price performance in almost any of the Apple products) and without a cult leader (Jobs) will not compete successfully with real consumer companies.  Motorola tried to do both industrial and consumer, eventually split up and both will die in the next decade.

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