1. Industry analysis of Beeper/Pager
As an icon of 1990s technology, pagers had helped making the company Motorola one of the world’s biggest telecom giants. In 1942, Motorola was already the dominant leader of pagers, gaining as much as 85% market share. –For more than 40 years later on, the company was at the forefront of both the one-way numeric pager and two-way numeric pager markets.
1.1 Industry analysis during 1990s
The period of 1990s was the rise of the pagers. In the early 1990s, the paging industry demonstrated phenomenal growth. During this period, nine companies underwent IPOs, raising over $425 million. By 1996, pager service providers were considering network upgrades, hardware enhancements, and effective methods for ensuring widespread adoption by millions of new customers. Industry analysts were predicting that the number of pager users in America would top 50 million, or one fifth of the country’s population. 3 Hardware manufacturers like Motorola were partnering with the world’s largest pager service providers to bring customers the latest features in pager communication. The customer base for pagers had grown rapidly from medical and emergency personnel to parents and teens around the world..
1.2 Industry analysis from 2001 to 2014
After Motorola announced the end of its new pager manufacturing in 2001, many mobile carriers (e.g. China Mobile, China Telecom, etc.) in different countries had also closed their pager networks and services accordingly. And a number of smaller firms began to enter the market, Exhibit 1 indicates Pager Operators in the U.S. in 2001. Most of these small service providers provided both one-way and two-way paging.
Exhibit 1 – Pager Operators
Till today, pagers remain in use only in places where mobile phones typically cannot reach users, and in places where the operation of the radio transmitters contained in mobile phones is problematic or prohibited. One such type of location is a large hospital complex. Another is a facility handling classified information, where various radio transmitter or data storage devices are excluded to ensure security.
2. Motorola promotes the technology globally
The first successful consumer pager was “Motorola's Pageboy I” first introduced in 1974. It had no display and could not store messages, however, it was portable and notified the wearer that a message had been sent.
By 1980, there were 3.2 million pager users worldwide. At that time pagers had a limited range and were used mostly in on-site situations for example when medical workers communicate with each other within a hospital. This time period was the growth stage for beepers.
By 1990, wide-area paging had been invented and over 22 million pagers were in use all over the world. In early 90s, Motorola began to sell a paging service, called Embarc, which allowed users of portable computers to receive messages, electronic mail and other information over radio waves. By 1994, there were over 61 million pagers in use and pagers became popular for personal use, even in developing countries, such as China and India. This period was at the business zenith.
However, with the market shock of mobile phones, pagers became to step down from the stage of history. Pagers gradually vanished in the market and few companies still make pagers, only existing in some niche markets.
Overall, Motorola played a leading role in the new innovation of pagers but the trend does not go a long way from begin to end.
3 The environment/market influences (why pager? why Moto?)
Motorola started by producing radio systems for vehicles and later on mobile telephones for automobile. But these were large and heavy and, due to the amount of power they consumed, required the vehicle's engine to be running in order for the systems to be used. Also, although vehicles has some mobility, people still feel stuck with the cars just like with a wire beside the desk in their offices or home. The desire for real mobile communication, the freedom to be everywhere while communicating is the drive for paging technology (as well as the cell phones later on).
Walki-talkie is a portable two-way radio transceiver developed during the Work War II mostly for military use. Motorola is one of the earliest contributor to the technology. However, after the war, when the market called for portability, it is almost natural to combine the portable element of it and Motorola’s strong automobile radio technology to deliver the first generation of mobile communication tools. A pager is - if you think about it - a small portable private radio. Pagers soon gained popularity in the U.S. market especially among young people and became part of the pop culture.
Paging services were brought to China in early 1980s, when landlines are already somewhat popular. Pagers enabled people to be found anytime and anywhere. There is no longer the need to wait beside landline phones. This brought great convenience and make communication at work or with friends much more efficient. Motorola took its advantage in paging technology into Chinese market and gained great success during late 1980s and 1990s.
4. Technology forecast done by the company
In addition, paging systems use radio waves to transmit or broadcast one-way messages. The pager itself is small, allowing for accessibility at all times, and can be carried or clipped to clothing. Each pager has a number, like a phone number, which the caller dials. The pager is then contacted, and informs the user that he/she is being contacted, with a beep, a vibration, or other signal. They can work with voice mail capabilities, allowing a caller to leave a message that the user can pick up at his/her leisure. Or, as mentioned above, pagers can display messages across their screens.
5. How the industry was led to astray
The main reason of the failure of Pagers is that the industry (including company Motorola) failed to predict the huge competitive threat coming from the mobile phones, while the mobile phone technology was being developed very quickly. Therefore the pager industry missed the best time period to improve their technology to catch up with the new trend and as well as the user’s new need, and it has become more and more marginalized by the users.
6 Technical Opportunity should have been reached
1- Niche market.
Actually pagers are still useful in some certain places, e.g. pagers were once thought of as a tool for drug dealers, and initially were most commonly used by medical personnel for emergency services. And Runners can use pagers that clip to their belts.Amazon Inc.is still using pager in the workplace. There are three reasons leading to the anomalism. First, people tend to ignore the ring from messages of mobile phones since they normally receive tens of messages a day but only the coworkers would contact them with beepers. So the ring of beepers can even wake somebody sleeping up. Second, the system is more stable than smartphones’ system due to its simplicity. For example, when a sudden accident happens, telephone network is easy to break down because of the information traffic jam but pager system is a different story. Last but not least, the cost of pager is way lower than that of phones.
Therefore, “blue sea” still exists for pagers in business worlds.
2- combining with cellphone
One advantage of pagers as opposed to the cellular telephone is the ability to screen phone calls, thus not wasting airtime on an undesired call. (When the popularity of smartphone is not high.)Pagers are also used in combination with the cellular phone. More and more people are working from home or on the go. The pager is adapting to the needs of these companies and employees who must be mobile, yet in constant touch with the office.Worldwide reach is most likely the next step for the pager.3- Smart functions
The pager’s technology can be used for miniature computers. As it stands now, they can operate as portable email receivers and fax machines. Computing will never be the same, as a pager becomes a personal computer on the go. Two-way pager technology is already being marketed, and its capabilities will surely be increased. Voice recognition papers and portable answering machines are currently being developed and marketed. Sky pagers, allowing paging worldwide and in the air, will become more common. All of these technologies are expected to become even more affordable as they gain wide acceptance. One of the most advantageous features of the pager is that it is compatible with other technologies. This indicates that the pager would probably not lose its popularity. Instead, it will be combined with other communication technologies to create new and better tools.7-Lessons from the “flash in the pan”
1-“Quit or change”
If you cannot extend the life cycle of one product (like we have mentioned the new functions for pagers above), you would better switch to the right thing as soon as possible.We can cite Chinese market for example. In 1983, the pager business entered Chinese mainland market and reached its peak at the end of 20st. However, in 2002, 90% drop of sales in the market still could not stimulated Motorola to make some changes both for the pager business and the development of smartphones.5 years later, it lighted out for pagers in China totally in such a tragic way. So if the managers in Motorola could be aware at first time that 3G smart phone is a trend and enormously strong substitute for pagers and even cellphone, they should have stopped or change the business.
2-Don’t listen to your customers without your own judgment towards future market
Motorola missed the fast movement to 3G. Sure, it did — but remember its biggest customers, the U.S. wireless carriers, didn't think they needed 3G technology. Hence, Motorola listened to its customers, when they should have been listening to its customers' customers. Sometimes, customers seem to be right all the time but remember in some cases they are not crystal-clear what they really want and what incentives genuinely drive them to pay the bill.3-Technology changes faster today
It took us hundreds of thousands years to move forward from agricultural society to industrialization. However, it only took decades to brace the smartphone. Technology changes faster today than ever, therefore, companies need to think ahead, look further, adapt faster - at least, when hint of new technology emerges, do not ignore it! The falling down of lots of once well known Tech-giants is due to their complacency. Like Nokia, Kodak and Motorola, they have been so successful in their fields which made them blind to the fast developing threads. Or they thought they still had time, but in fact they do not! These are serious lesson to learn in today’s fast changing society.References:
The Decline of Pager Technology http://faculty.tuck.dartmouth.edu/images/uploads/faculty/ron-adner/Pagers.pdf
The Decline of Pager Technology http://faculty.tuck.dartmouth.edu/images/uploads/faculty/ron-adner/Pagers.pdfhttp://www.cbc.ca/news/technology/telus-may-be-closing-its-pager-network-but-the-beeper-isn-t-dead-yet-1.2929237
Newsbytes, “Pager Market Up, Motorola Market Share Down,” August 11, 1997.
http://www.cbc.ca/news/technology/telus-may-be-closing-its-pager-network-but-the-beeper-isn-t-dead-yet-1.2929237
http://www.brophy.net/PivotX/images/brick_to_slick.jpg
http://www.brophy.net/PivotX/?p=john-francis-mitchell-biography
http://www.historyofthecellphone.com/people/john-mitchell.php
http://en.wikipedia.org/wiki/Pager
http://www.brophy.net/PivotX/images/brick_to_slick.jpg
http://www.brophy.net/PivotX/?p=john-francis-mitchell-biography
http://www.historyofthecellphone.com/people/john-mitchell.php
http://en.wikipedia.org/wiki/Pager
Comment from 53805830:
ReplyDelete"If you cannot extend the life cycle of one product (like we have mentioned the new functions for pagers above), you would better switch to the right thing as soon as possible." I do really agree on the learning point! The trend of smartphone era is irreversible. To make a right decision in the right time, put resource in most promising product keeps a company stay longer.
Student ID: 53793261
ReplyDeleteDear Team 10,
This is an interesting and lucid analysis of the rise and fall of pagers, or beepers. Well done!
I think it is interesting that you often mentioned the fact that pagers were widely used by doctors. I have observed this because my father is a doctor. During the 1990's my father used to carry a pager on him at all times while he was working at the hospital. Sometimes he received a message and would have to go to the hospital immediately. Thus, I agree with the argument that pagers were good for the medical field because doctors could quickly respond to emergencies.
I also agree with this blog's concluding argument, as well as with Inot Ey's comment, that Motorola simply failed to realize the potential of the rapidly improving cell phone market. Looking at Motorola's beepers from a Porter's 5 Forces perspective, I think it is clear that beepers were overtaken by substitute products (cell phones) as well as new entrants (cell phone providers).
It seems like Motorola's pager story is a reminder that no matter how strong a company's core competence is, the external environment is always changing. This highlights the importance of marketing in my opinion. First, companies need to clearly understand what the market wants and needs. Second, products should be designed to fulfill those needs in clever ways. Since the needs of markets are always changing, companies should never stop trying to understand new trends, legal situations, developments, etc.
In the case of Motorola, pagers fulfilled a very clear need, however, cell phones can fulfill that same need while fulfilling many other needs at the same time. Therefore, I think that once it became common and affordable for most people to own a cell phone, it just made more sense to lose the beeper and just text message or call someone instead!
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ReplyDeleteThanks for the sharing of team 10
ReplyDeleteWe are now living in a time of great technological era. Usually, the updating of the new electronic devices are out of our expectation. However, among all the innovation failures that we are discussing in this class, actually, pager is not a complete failure compared with other technologies, just as what you guys have mentioned that it is still in use in some particular industries or special occasion, for example, the earthquake. It is not dead yet! I really like your analysis about the technology opportunities of the pagers that it has its own value now. It is true that the smart phones have dominated the market, but the information security issues are now becoming more and more obvious, like Apple. Maybe, we could think about whether "to be smarter" is a good thing.(just my personal opinion) However, I've read a article that the hospital is now looking at ways to improve the cell phone reception which seems a threat for the future development of the pagers. I'm not sure whether we could see a "new pager" in the near future, but we can believe that new technology will solve the problems that we have.
Hi, Team 10,
ReplyDeleteGood work! Thanks for sharing the interesting story of Motorola Pager and good lesson learnt form the innovation failure.
In today's competitive and global market companies are finding it necessary to deeply understand their customer and build their product accordingly. It's true that people do not always know what they want. Or, it is just a matter of time in case right direction and efforts have been made. By observing and understand customers’ need, behaviors, motivation; company can be more accurate to identify customer’s need.
Innovation is not always cool and complicated, it can be just solving simple problem in a new way. Yes. The traditional Motorola pager has been dead already. But the core technology could be survived and transformed into a new form of product or different purpose of application, such as private pager (http://www.motorolasolutions.com/en_us.html)
It’s true. When the market is changed, the strategy need to be changed accordingly. While some said the main reason for a business going down is due to lacking of sense of urgency, for example, as you team mentioned, they missed the right time to change. Probably, most innovation failed because they simply stopped innovating. Why that? There could be some other interesting perspectives to discover…
Best Regards,
KK
Dear Team 10,
ReplyDeleteYour blogger reminds me of the funny stories happened in my family when I was young. Thank you for sharing!
When you did industry analysis, you can give me more detailed industry analysis. Pager is something belongs to the past generation, so you need provide more information for me to understand the context.
For the sixth part of the blogger, referring to technology opportunity should have been reached. I have several questions.
First of all, do you think the technology are applicable or at least they can make profit in a large scale? For the niche market you have mentioned, do you think the market is to small to make profit? As for the combination with smartphones, I do not think that such combination can benefit working people much. In my view, it is a way that working people do not like since it can bring more work for them. The third point is not attractive either. We are now having iPad or laptop. How can consumers find another reason to buy a pager to read emails?
I do agree that technology is now changing faster than ever. It is wrong for Motorola not being sensitive about the change. However, for the customers' part, I think your point is almost the same as the points about Motorola did not change quickly. Would you give me more information about how Motorola ignored the customers? Did it ignore customers' need? Did it charge more than it should from the customers?
Thanks for this team's sharing as I always think pager is a useful tool for some niche markets and I still see it is used in some area e.g. restaurant pagers - customers are given a portable receiver and once the food is ready, it will vibrate/flash/beep to alert customer. Thus, I'm still struggling if it is a failure innovation. I like the conclusion your team made in the last - Quit or change”, Don’t listen to your customers without your own judgment towards future market, Technology changes faster today.
ReplyDeleteFrom these cases, I believe if company could tell customer the value of the innovation. Even there is advance technology in the market, there is still room for the product in the market.
Thanks Team 10.
Hi Team 10!
ReplyDeleteThank you very much for your sharing and it impresses me that pagers are still widely use in some particular fields!
You have argued that the main reason that led to the failure of pagers was the invention of mobile phones. However, I have a different interpretation on this. How long pagers will be able to stand in the market even without the invention of mobile phones? What other features can pagers bring to us except showing messages that other people sent to you? In my perspective, Motorola, being one of the biggest telecom companies at that time, failed to be technology sensitive in order to improve its product to be competitive.
We all understand that there is always a technology change and not a single innovation will last forever. The most important is to always be aware of the capabilities of your competitors and the tides of technology change.
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ReplyDeleteHi Swinner:
ReplyDeleteThanks for your insightful work on Motorola Pager. It is interesting to read the history of something that you real familar with, though it has been out of sight for a while.
First question I would like to ask is that, does the Motorola Pager could be identified as a innovation failure? You show us the picture of innovation adoption lifecycle, which admitted a inevitable doom of innovations. Pagers are rarely seen today but it does have a golorious history for more than a decaded. It is the same with bicycle, who has a much longer innovation lifecycle though. So I doubt that Pager may not really be an innovation failure.
Second, you mentioned how pagers could survive in the technological advancement, like focusing on Niche market or combining with cellhpone (cellphones nowadays do incorporate these functions right?). However, these strategy would not reverse the decline of pagers, just like the bicycle industry.
Student ID: 5376 1017
ReplyDeletethanks team SWINNER, I really learn a lot from your presentation, It recalled my memory of my first and only pager in 2001, according to your presentation, I should know that the pager is out of the market then, but with the locking of information and non-interesting of innovation, I bought one pager of Motorola and only last for a week before I broke it and maybe I broke it because I realized that I need a cell phone not a paper. any way, this is a really good presentation, I have learned a lot.
Thank you for the sharing and it brings me back to 90’s. Pager had its time that provides convenience in communication. I agree with you concluding its failure mainly due to do not predict the huge competitive threat coming from the mobile phones. Company’s vision decides how far it could go. How about company enjoys its glory and keeps on innovation for new high technology at the same high?
ReplyDelete