Missing the point: Of products and market segments


Why we don't get it—or maybe don't want it
— 12:00 AM on July 21, 2003

"BUT YOU'RE MISSING the point!" I've heard this phrase too many times to count after TR has produced a lukewarm review of a so-so product. What follows this proclamation, almost always, is a detailed, tortured explanation of the product's intended place in the world—how it's aimed at a certain market segment, and how that segmentation renders our criticisms irrelevant. I generally do my best to listen, restate our case, and explain why our complaints still matter. Once it becomes clear we won't be changing our review, the PR rep signals resignation and says, "Oh, well. You're just an enthusiast site." Or something to that effect.

Makes me want to pull my hair out. My eyelashes, maybe, for maximum effect. The PR types are implying the shortcomings are not the product's; they are the reviewer's or—more often—the entire publication's. Since we are a PC enthusiast-oriented web site, we are supposedly incapable of comprehending the merits of a product not adorned with neon glowy things and overclocked to the point of near vaporization.

The enthusiast tag has become an asset and a liability for us. It's an asset, obviously, because folks who ought to enjoy hanging out here tend to find us. But we sometimes get segmented off from the "mainstream" and tagged as unable or somehow unqualified to review "mainstream" products.

Of niches and segments
This situation raises questions about the definitions of "enthusiast" and "mainstream." Often, "enthusiast" functions as a synonym for "well informed," while "mainstream" means "not well informed." It may be a true "enthusiast's choice" to spend an extra 15 bucks on a motherboard that looks nice and has a crazy array of overclocking options. But is it only an "enthusiast's choice" to pay an extra couple bucks to get a product that doesn't suck? Or to get a product that is a true thoroughbred rather than a one-trick pony? Oftentimes, a company's proclamation that its product is not targeted at enthusiasts is an attempt to avoid the scrutiny that comes with the attention of technically savvy consumers—and reviewers.

At other times, running downmarket or into a niche is the only refuge for a company that can't compete directly with the big dawgs, but the move itself is very much legitimate. VIA's foray into the embedded processor market is a terrific example of such a move. The C3 gets crushed in performance versus the Athlons and Pentiums of the world, but it's a great competitor in the embedded and "PC appliance" spaces, in no small part because of its x86 ISA compatibility and (VIA-supplied) x86 platform infrastructure. The C3's simple design and relatively low transistor count helps, as well, by keeping power requirements and heat dissipation in check. VIA was smart to position the C3 as it has, and we can't deny that.

But remember, this is technology, and the guy who owns the high end rules the roost. Let it never be said that Intel couldn't come into the C3's market and crush it like a grape if it so desired. One well-placed Pentium III Tualatin-based product could whup the C3 in performance while matching its price, power consumption, and heat dissipation characteristics. VIA's C3 business survives because Intel chooses to enjoy the higher premiums its products can command in other segments of the market, not because the C3 has insurmountable advantages over existing technologies from Intel—or AMD, for that matter.

And if VIA could legitimately pursue the higher premiums Intel's products command in other market segments, believe me, it would.

The next time a technology firm argues from market segmentation, remember this object lesson. Even if targeting a narrow or low-end market segment is a smart move, the fact of the move itself may tell you something about the relative merits of the firm's technology.

Fluid boundaries
This market segmentation thing has its limits, too, especially when we're talking about the "enthusiast" market. We enthusiasts don't always go for products aimed specifically at us. We love it when manufacturers really cater to our wants and needs, but we also like to use our know-how to get a quality product at a decent price. That's the important thing. The most cited and probably best example of this truth is the way enthusiasts flocked to the old Celeron 300A processor back in the day. Intel's engineers and marketers thought they were segmenting the processor market in order to increase profits. We realized they were selling killer CPUs at fire-sale prices, and we took advantage of it. We'd do the same again today. We test the heck out of all sorts of products, and we buy what suits us, not what the marketers want us to like. We'll run upmarket or downmarket with nary a second thought.

There's simply too much overlap in technology, particularly in semiconductors, for product segmentation to survive in pristine form. The FireGL and Quadro lines may be worthy workstation graphics cards, but we all know they're really just Radeons and GeForces at heart. If we want OpenGL drivers optimized for high-polygon, fixed-function transform and lighting in 3D modeling and design apps, we'll run a SoftQuadro mod, thanks very much. No need to spend hundreds more dollars on the same card with different drivers.

Naturally, marketing types get annoyed when we fail to respect their beloved market segment boundaries, whatever the reason. That's OK. Their job is to make their company's products look as good as possible to the outside world, and they're just trying to make that case. Our job, however, is quite different. We'll play the market segmentation game when it makes sense to do so. We're not slamming the VIA C3 for failing to outrun an Athlon XP, and we haven't (yet) figured out how to make a Pentium 4 work in SMP. But we will ignore those boundaries when they seem too artificial, when they don't make sense, or when we believe they're being used to shield a lousy product from due scrutiny. Some will say we're missing the point, but most of you guys know what we're up to. We're not missing the point; we're just failing to respect it. Sometimes, that's exactly the right thing to do. 

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