2011 tech fails: A year of gadget disasters

by peter.griffin / 30 November, 2011
For every iPhone 4S there's a Microsoft Zune in a year of major stumbles by some of the tech giants.
It's been a pretty big year for technology, not in terms of revolutionary new ideas becoming reality, but in the user experience vastly improving to a point where some of the long-hyped uses of technology are finally within our grasp. I've rounded up some of the highlights of the year here, but for every iPhone 4S there's a Microsoft Zune and in this piece I want to wade through the detritus of broken gadgets, online services and tech business models that have piled up in 2011. Looking back, it was a year when some of the tech titans took major stumbles - and it is borderline as to whether some of them will ever recover …

1. RIM's epic crash

It's been a shocker of a year for Canadian smartphone maker Research In Motion which has seen itself go from being the first choice for executives seeking to stay productive on the go, to a company trying to salvage its reputation after a major international service outage and a failed bid to enter the tablet market.

In October, the company's Blackberry email and messaging services stopped working for millions of customers across Europe, Africa, the Middle East, North America and South America, the result of a core switch failure in its network.

The centralised nature of the Blackberry network - so crucial to the highly secure services goverments and businesses rely on to keep their email communication safe, now took those customers offline completely. The multi-day outage was unprecedented in scale and duration and couldn't have been timed worse, hitting just prior to the launch of the Apple iPhone 4S, which many immediately saw as a viable alternative to the Blackberry.

Blackberry's share of the smartphone market has been eroding all year as Google Android phones and Apple take a larger bite of the corporate market. RIM seems to have conceded that in a move to make its device management software available to rival devices. Struggling to stay competitive in the handset market, Blackberry is looking to the day when it instead supplies software that runs on other companies' phones.

Complicating things has been the failure this year of the Blackberry Playbook, a well-designed and competitively priced (US$199) 7 inch tablet that has nevertheless failed to stir the interest of Blackberry phone users and barely registered with tablet shoppers in general, with the iPad 2 continuing to dominate the market. Issues with running native apps on Blackberry's new BBX operating system has confused and frustrated software developers and turned off consumers further. The upshot is that the future of Blackberry, which shed thousands of employees during the year, is far from secure and the company is now considered a prime take-over target.

As a Blackberry Bold user, I'm almost at the end of the road with Blackberry too - its failure to innovate and lack of an app store with the diversity of the Apple App Store or Android have killed the appeal of the Blackberry other than for email addicts and those who need to communicate in utmost secrecy.

2. Euthanasing the Zune

It came with little fanfare but signalled the end of a lengthy and costly attempt to challenge the Apple iPod in the music player market. Microsoft pulled the plug on its rival player the Zune in October, promising to kepe alive the Zune music store alive and fold aspects of the software into its Windows Phone products.

The Zune was a respectable device, particularly latter models including the Zune HD, which came with a touch screen. But the player never had anything compelling enough to divert people from the iPod and Microsoft was never able to better the iTunes experience.

The Zune should really have been killed off much sooner - the trend towards integrated phone and music players was accelerated with the arrivla of the iPhone back in 2007, but Microsoft forged on with its attempt to take a swipe at Apple. Who knows how many tens of millions of dollars Microsoft frittered away developing and marketing the Zune, but it has all come to nought.

Making matters worse for New Zealand users is that the Zune store had a complicated credit system, expensive downloads and limited selection. Hope for a decent Apple alternative lies in the Windows Phone platform and still existing Zune store, but Microsoft has a steep hill to climb to credibly challenge Apple in this space.

3. HP's Touchpad debacle

One of the most bizarre episodes in the history of the computer industry took place on August 18th when HP held a press conference and abruptly announced it was pulling its newly launched tablet computer the Touchpad from the market.

Chief executive Léo Apotheker also revealed the company was ditching development of its WebOS operating system for tablets and smart phones - removing a promising rival to Apple iOS and Android, and that HP was considering pulling out of the consumer PC business. It also outlined details of a massive acquisition of British software company Autonomy.

The reaction was carnage on the market,s with HP's share price dipping nearly 25 per cent in the space of a day. A fire sale of Touchpads followed across the US and by September Apotheker was gone from HP - having presided over a massive erosion in the value of the biggest PC maker in the world.

HP undertook a final production run of Touchpad tablets to clear out the component inventory held by its stunned production partners and is gradually selling the tablets off at reduced rates. They will linger for years, relics of one of the worst strategic blunders in the history of the tech sector. As for WebOS, which was initially developed by Palm before being bought by HP, its future looks bleak - unless a buyer can be found to resurrect it.

4.Sony insecurities

The worst online security breach of the year saw the customer records of 77 million members of the Playstation Network stolen. The cyber attack stunned Sony, which took two days to inform customers that their information had been thieved. The attack also took the network offline for days, with full service not restored until well into May.

Sony was roasted by security experts as it was revealed that the company had not encrypted personal details held on file - though credit card numbers were protected. Sony belatedly moved to put things right, offering free game credit for the network and vowing ot avoid such a breach ever happening again by appointing a security chief in the company. But the damage to its credibility was significant. As a Playstation owner I was very dissatisfied with Sony's response, which amounted to too little, too late. If the PS3 wasn't such a big sunk investment for a gamer, I suspect many like myself would have been out shopping for an Xbox.

5. Flip - and its gone

One of the world's most popular pocket-sized video camera met an unceremonious end in 2011 when the Flip was killed by owner Cisco. The Flip made shooting, editing and uploading short videos easy and provided remarkable quality and ease of use in a device the size of a phone.

But it was exactly that which killed the flip, with executives seeing the market shifting towards the camera phone, eliminating the need for a standalone video recorder.

Cisco's failure to innovate with the Flip didn't help matters, destroying the early goodwill and branding success the camera won. The final nail in the coffin was weak financial performance in Cisco's business overall which led to a cull of unpromising business units, notably the Flip.

6. Qwikster fizzles

We've heard in recent days the reasons why popular US video streaming service Netflix won't be coming to New Zealand any time soon. Netflix has bigger fish to fry in its home market, but that didn't stop the video giant from stumbling seriously when it attempted to separate its maturing DVD business from its video streaming service - and put a positive spin on a major price hike in the process.

The cutsie name of Qwikster failed to disguise the changes Netflix had in store for customers - who enjoy DVD rental as part of their video streaming subscription. The move would have required Netflix users to browse and pay for services via two different websites that were not connected. News of the Qwikster plan saw customers depart in droves and Netflix, faced with strong competition in video streaming from Amazon.com, last month buried the Qwikster plan.

7. Nothing to Yahoo about

Another high-profile CEO bit the dust when Carol Bartz was fired from web company Yahoo, in an acrimonious departure from the company she had led since 2009. Yahoo had never really recovered from its ill-fated decision to reject a multibillion dollar takeover offer from Microsoft in 2008.

Since then Yahoo's share price has tanked, it has discontinued unpopular services and generally become irrelevant to a growing number of web users. On the local front, Yahoo unwound a partnership with Telecom, reducing its visibility here. With little in the way of attractive web offerings, Yahoo is struggling to survive against arch rival Google and is again a takeover target - probably for a fraction of what Microsoft was offering just three years ago.

8. 3DTV falls flat

It was the year when 3DTVs flooded the market, but consumers were failed to be moved by the technology, with the requirement to wear distracting 3D glasses and a lack of compelling content failing to generate any excitement. 3D at the cinema fared little better during the year as a disappointing string of 3D blockbusters turning in disappointing box office results. Cinema goers were opting for the conventional 2D version of the movie rather than stumping up a few dollars extra to view it in 3D.

Back here, there was a blip of interest when it was revealed that Sky TV was considering shooting and broadcasting the Rugby World Cup in 3D. But those plans came to nothing, as did a venture to show the games in 3D at theatres around the country.

9. Nintendo's Wii problem

It reinvented video gaming in 2008 with the family-friendly Wii console, but 2011 saw a Wii sales collapse as Nintendo exhausted the market and failed to come up with anything substantively new to tantalise the saturated gaming market. Video game sales have been in decline across the board, but Nintendo has led the decline. A 3D version of the Nintendo DS console was poorly received forcing a major price cut.

In fact, Nintendo sales this year have been driven by aggressive price cutting, which saw the console finally shift in large numbers during the Black Friday sales in the US. All three of the video game giants are currently developing new versions of their consoles for launch next year. 2011 will have shaken Nintendo's confidence. It will need to pull off a major coup to reclaim the glory of 2008 when its rivals unveil their new gaming machines.

10. Microsoft's marriage of convenience

Finnish mobile phone maker Nokia has had a disasterous year with a 38 per cent decline in smartphone sales and market share in the valuable segments disappearing to Apple and rivals touting the Android operating system. Nokia shocked the phone industry when it revealed it would partner with Microsoft to develop smartphone's running on the Windows Phone platform.

The first fruits of the Nokia-Microsoft partnership were unveiled last month with a couple of well-received handsets showing that Nokia's design aesthetic gels reasonably well with Microsoft's slick operating system.

But the mobile tie-up was not well received. Microsoft has failed to gain serious traction in the smartphone space, while Nokia's software has been increasingly marginalised by better-featured and user-friendly competitors. But with a loyal following and a distinct design philosophy, many see Nokia's best attributes being watered down in a relationship doomed to fail in the face of formidable competition from nimbler smartphone makers.

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