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Why I won’t buy Gateway ever again

So yeah, many of you probably read my headline and thought “duh.”  I never had a very favorable impression of the Gateway brand either, but I was in a bind.  In January I was starting work on a new project, and I needed to replace a 5 year-old Dell desktop I had been using at home.   I’m not sure how I lived with one PC for 5 years, but just as I was getting ready to start my new project, boom, the Dell bit the dust.  It needed Windows to be reinstalled badly, and since I wanted a new PC anyways, I figured I might as well do it now.

Normally when I buy a PC, I do my research, find a rig online that fits my specs, and then order it, typically online, so I can get a decent price.  But, I needed the PC today, like now.  So I headed on over to my local Fry’s to see what they had.

Fry’s had a few Dells, HPs, you name it, but the only one that had the specs I wanted for a reasonable price was a Gateway.   So I went home that afternoon with my first Gateway.  It has a stylish case, cool little covers over the drive bays, and it looks pretty neat sitting there in my desk.

So I got it home, reinstalled Windows clean, got my basic programs installed, and I was good to go.  Pretty smooth so far.

Then I plugged a LaCie 1TB external USB hard drive and tried moving some files from it onto the Gateway.  The process started, but then crashed mid-copy.  I’m thinking, “Okay, it happens, let’s try again.”  I go to find the files on the external hard drive, but now I can’t access them at all.  The drive has disappeared.  I unplug the USB cable, plug it in again, and wait.  And wait.  After about 5 minutes, the drive shows up, but I can’t click into it.

I open Windows Disk Manager.  It hangs.  After a few minutes it comes up and says the drive isn’t formatted.  I try to format it, but that fails, too.  No other PC can read it either.  After email exchanges with LaCie, trying a dozen disk recovery programs, I give up.  The LaCie has clearly gone to the big PC in the sky.

So what does this have to do with Gateway, you ask?  I’m getting there.

I wrote the whole situation off as a rare, out-of-the-blue hard drive failure, and went on with my life.  A few weeks later, I needed to move some big files around again, so I scrounged up an old 200GB Western Digital USB external hard drive to help out.  I plugged it in to my old Dell to get the files, and then I pugged it in to the Gateway.   Big mistake.

The Gateway proceeded to destroy this hard drive the same way it destroyed the first one.  It shows up as unformatted in the Disk Manager, and I can’t even reformat it.  It’s toast.

The Gateway had then bricked two external hard drives, so I called Gateway tech support.  Their email support said I needed to call their pay-support phone number.  I’m thinking that they escalated me, but the support should still be free, right?  Wrong.  The conversation went something like this:

Me: “My Gateway has corrupted two USB hard drives.  Is there something you can do to fix it?”

Dude: “Sure thing, let me just get your credit card information, and we’ll get started.  Support is $99.”

Me: “I have a two month-old computer that has destroyed two of my hard drives, and you want me to pay for support?”

Dude: “I think I know what the problem is, let me just get your credit card info, and we’ll get started.”

Me: “If you know what the problem is, can’t you just tell me?”

Dude: “I’ll need to get your credit card information first.  I think it’s a setting.”

(This is where I realize he has no idea what he’s talking about, and is trying to bluff me into paying.)

Me: “There’s a setting on my PC that will make it destroy USB hard drives?”

Dude: “It’s probably something you did.”

Me: “It’s brand new.  All I did was install software.  Installing software can make a computer destroy USB hard drives?”

Dude: “If I could just get your credit card information…”

Me: “Could I talk to your supervisor?”

Dude: “I can help you with this.”

Me: “I’d like to talk to a supervisor.”

Dude: “I don’t really have one. He’s not here, and even if he was, I can handle this.  If I could just get your credit card info…”

Me: “No thanks.”

So that didn’t go so well.  I went back to the email support, and their stance was this:

Please be informed that we handle only factory default hardware issues.  As the issue is not with the computer this issue is out of our scope of support.

I informed them that USB ports are default hardware, but apparently their stance is that once you plug anything into those ports, they aren’t responsible.  I wonder if they would have the same stance if the monitors I plugged in didn’t work?  If I were to put suitcases in my Miata (suspend disbelief for a minute here), I expect the Miata to carry them without destroying them even though they are not the “default hardware” of the car, and I would certainly hold Mazda responsible if it did.

Gateway was having none of my “logic” and held their line.

So, I’m not buying Gateway ever again.  It’s actually not because of the hardware, although I do think it’s rather odd for a PC to even be able to kill external hard drive to the point where they’re completely unrecoverable.  I’m not buying Gateway again because of their support.  They clearly are not a customer-focused company.  They are selling PCs, and are not interested in keeping people happy and making sure they are enchanted (as Guy Kawasaki would say) with their products.

I recently read The Ultimate Question by Fred Reichheld (which I highly recommend), and it makes the distinction between “good profits” and “bad profits.”  Good profits are when you make money by delighting your customers, as Dell has often done for me, and bad profits are when you make money from people who are ambivalent to your brand or worse are detractors.  Gateway had a chance to convert me from an ambivalent customer to a promoter through their excellent service, but they went the opposite way so here I am detracting.  And this is why Dell won the PC war and Gateway lost.

Facebook isn’t AOLifying the Internet, but Apple is

Gizmodo put out a post last week that gathered quite a bit of attention called Facebook is AOLifying the Internet–and That Sucks.  In it, the author concludes that Facebook’s never-ending quest to add features that keep people glued to their site means they are an aggregation of sub-par services that decrease the quality of our online lives.

It wants to be Netflix, it wants to be your Xbox, it wants to be Foursquare, it wants to be Gmail—Facebook wants to be the internet. Will you let it?

His argument is actually very much akin to the argument against “big box” department stores like Walmart and Target.  Supposedly the big stores are “evil” and we should be supporting local businesses because they have more heart and are better at specific things than the big box stores that don’t specialize.

However, the author misses the fact that Facebook, unlike AOL, is always looking for ways to go beyond its walls with Like buttons, comment widgets, and the rest of their social plugins.  It wants to enable your social interactions on and off of it.  They know they won’t control your Internet experience, but if they can make it richer, they can still provide value and give you a reason to keep coming back.  How many of us are thankful for Facebook Connect that keeps us from having to create new accounts on every site we go to?

AOL held its customers in a prison of AOL content and community, but Facebook knows that it can’t compete with third-party content, so they don’t even try.  They help their users find the third-party content that their friends are sharing, and that’s actually a pretty “open” thing to do.

A more viable comparison to AOL is actually Apple.  Even since the release of the iPod, Stevie Jobs has been working hard to lock people in to the iEcosystem.  If you have an iPod, you need iTunes and the iTunes Store.  You can’t just throw MP3s onto your iPod, you need iTunes.  If you want to buy MP3s online and put them on your iPod, it’s much easier through iTunes Store than through Amazon.  Ripping a CD you just bought?  Better do it with iTunes to make sure it works right.  When the iPhone rolled around with its App Store, our dependence on iTunes deepened even further.  Have an iPad?  All the same restrictions apply.

Apple knows they can’t truly lock down their platform, but if you have an iDevice, life is MUCH easier for you if you use it the way Stevie wants you to use it, that is, with the other iSoftware and iDevices that were designed for it.  If you want to play a file that’s in the wrong format or want to use a different music player on your computer or want to organize your media files yourself, suddenly you have to search for workarounds and hacks.  If you have an iPod/iPhone/iPad, it just works better if you use iTunes, and actually even if you use a Mac.  The Apple ecosystem is (almost) complete.  You can look even further at how Apple restricts the apps they allow in their App Store, but perhaps that’s a topic for another day.

You can fully complete your assimilation with the iEcosystem by subscribing to MobileMe, but so far this is where Apple has fallen down.  The services MobileMe offers are all available elsewhere on the Internet, for less money, so only the true Apple believers are on the platform.  I think Apple knows their offering isn’t strong enough here, but watch out: New reports like this one lead me to believe they are renovating MobileMe to become a tighter piece of the iEcosystem.  Once that’s up and running, I wouldn’t be surprised to see a smooth experience with Apple devices require an iPod/Phone/Pad, iTunes, a Mac, AND a MobileMe account.  Starting to sound more AOLesque?

So while it’s not a perfect analogy, Apple wants to control your mobile, computing & media consumption experiences just as AOL wanted to control your online experience.  Apple’s platforms may not be completely closed, but they are certainly much easier to live with if you work within the iEcosystem.

None of this is to say that Apple’s products don’t deserve the success that they’ve seen.  They are excellent, forward-looking products, and for people who live within the iEcosystem, they perform admirably.  For those of us who have needs that go beyond the iEcosystem, life becomes difficult quickly.

And this is where I believe Apple’s strategy diverges from Facebook’s.  Facebook knows you’re going to consume content anywhere you find it, and they want to enable that and find ways to make it a richer experience for you.  Apple wants you to find content (media) in the places they recommend, and they want you to consume it using their devices.  Facebook wants to enable your online life, while Apple wants to BE your computing life.  This is by far the more AOLish strategy.

Android: Classic Disruptor

There’s a great article at the Equity Kicker about how Android is a Classic Disruptive Play vs. iPhone, in reference to the Innovator’s Dilemma.  I’d argue that Android will disrupt the iPad as well, and before long both the iPhone and the iPad will get pushed to the side as Macs were by Windows and PCs oh so many years ago.

Mind you, I’m not saying they are bad products, but if people can get something almost as good for significantly less money, they’ll generally take it, even if it doesn’t carry the brand status and mystique that a glossier Apple product does. In particular, I think Apple’s insular ecosystem that relies on iTunes and forces users to buy overpriced, proprietary accessories will hurt them in the long run as phones and tablets find more and more uses in our everyday lives.

As smartphones and tablets become commoditized, Apple’s pricing will become increasingly out of whack, and cheaper competitors are sure to steal a large chunk of their marketshare.

Dell Streak: Lame. Dell Inspiron Duo: Cool.

I’m not sure what the price point will be on the Inspiron Duo when it comes out next week, but this may be the iPad for the rest of us who aren’t so keen on the whole iTunes ecosystem:

Video on YouTube

Social Games all the rage? Not so much

There’s a great article over at Search Engine Watch about how “Social Networks don’t Automatically Make Games Social.”  Despite all the recent hype over social gaming, most of the games we see on Facebook are really single-player games that have loose social ties, like high score lists among your friends.  Most of the “social” features are really just pyramid schemes (I’m looking at you, Farmville), like giving away in-game bonuses for inviting friends, but the game mechanics don’t involve real social interactions, and there usually isn’t even a chat room.

True social gaming on Facebook is still pretty rare, and with the complexity of building truly social games, we’ll probably have to wait a while still before they come to the fore.

Ben Elowitz on the rise of SMO: Social Media Optimization

PaidContent features an article from our friend Ben Elowitz proclaiming the death of SEO in favor of Social Media Optimization, or SMO, and it’s worth a read (his blog is here.)  As I discussed in my blog post on the rise of social search, I think he’s dead on in this prediction.  We’ve seen Google’s search add more and more social features, offering tweets and other social media content for some searches, and as we predicted Bing is now integrating Facebook Likes into its search, so clearly marketers will have to start optimizing those channels to get the best placement in social search tools.

NookColor: First of the iPad Challengers

If you’ve read my blog at all over the past couple of years, you know how unenthusiastic I am about e-readers in general, and the Kindle specifically. Today, Barnes and Noble introduced their new reader, the NookColor, and it’s a huge leap forward that should help them gain significant market share.

The NookColor is, of course, full color, but also important, it features:

  • A web browser
  • Support for digital music files
  • Support for MP4 video files (I’d like to see more codecs supported, but it’s a start)
  • Android OS
  • Its own app store, so presumably most Android apps will work with it, although B&N will  curate the offerings
  • 8GB of internal memory, with a Micro-SD slot that can support up to another 32GB
  • A mini-USB port
  • Wifi

All that, for the low, low price of…$249.  You read that right.

James McQuivey of Forrester Research talked a little today about how this new Nook will affect the Sony and Amazon offerings, but what I want to know is how it will affect the iPad.  If you read through that feature list above, it matches the iPad almost feature-for-feature, although it surely has a slower processor, and of course wouldn’t sync with iTunes.  (Personally I find iTunes bloated and slow, and can’t stand using it anyways, so no loss there.)

So the question is will people keep shelling out $600+ for Apple’s iPad?  If so, why?  The prestige?  The “cool factor”?  Because they’ll only buy Apple products?

The NookColor really hits the sweet spot, and is a sign of things to come.  It caters to those of us to don’t read enough to justify a dedicated e-reader (most Americans, I’m guessing), and to those of us who think the iPad just isn’t useful enough to justify the price (I don’t think I’m alone there, either.)  The NookColor is actually the first e-reader or tablet that has piqued my interest as having sufficient functionality at a reasonable price point.  And it doesn’t look half-bad, either.

I don’t think B&N has the marketing chops to take on Apple, but I think the NookColor is the first in a string of low-end tablet/readers we’ll see come out in the next year or two that will turn tablets into a commodity product, like netbooks.  At their current pace, Apple may see the iPad get Mac’ed in the not-too-distant future.  Its cost and closed nature will relegate the iPad to a niche market of customers who will spend significantly more for the sense of style and status that Apple products bring with them, but the mass market will yet again pass Apple by.  Incidentally, Android phones are selling faster than iPhones these days, too…

Facebook and Foursquare can coexist

By now you’ve surely heard about the release of Facebook Places.  Many are calling this release the endFacebook Places on iPhone of Foursquare, which has been the market leader in mobile location-based apps so far, but I believe the two can coexist, just as they promised they would at the launch event on Wednesday.

The reason they can coexist is that their products are different and will therefore serve different markets.  Foursquare from its inception has been focused on making check-ins into a game by rewarding users with badges and “mayorships.”  Foursquare also helps people stay connected by pushing notifications when their friends check in near them, but I’ve found this feature to be annoying personally.  Often I’d find myself in the middle of something when I’d receive a check-in from a friend telling me they’re at a restaurant or something, which is rarely useful information.  Am I supposed to stop what I’m doing and drive across town?  Maybe this is more useful in small cities or for high school/college students whose friends aren’t quite as spread out.

Surely Foursquare will integrate coupons or some other Shopkick-style shopping features to make the service more useful, but it’ll likely always be focused on the gameplay aspects and on aggressively notifying friends of their friends’ whereabouts, making it attractive for a younger, constantly-connected demographic who will likely be very loyal and use it non-stop.

Facebook’s offering lines up nicely with their overall positioning – their check-ins are aimed at helping people connect with their friends, see where their friends are (or have been), and share their activities with those they care about.  The entire experience is more opt-in – if I want to see where my friends are, I can go look at the list – it isn’t always pinging me to tell me where people are.  When you post check-ins, they go straight to your Facebook feed, just like any other status update.  Once Facebook gets the privacy settings all worked out, it promises to be an elegant, less “always-on” approach to keeping friends connected.

Facebook also has the advantage of a larger installed base.  Most people have far more friends on Facebook than Foursquare, so it’s inherently more useful than Foursquare (although I could see kids using Foursquare specifically to avoid broadcasting their check-ins to their parents/relatives…)

Ultimately I think the debate is about “mainstream” location services, and “hardcore” location services.  Foursquare can continue to dominate the hardcore and can likely be very successful with it, but Facebook will own the masses.

Does Facebook sell out their own Terms of Service?

I spotted an interesting post last week on about a marketing campaign that JVC was running on their Facebook page.   Its headline promised to explain how JVC added “35,000 fans in 30 days” which is an eye-popping number for anyone who’s ever tried to drive traffic to a Facebook page.  Only the largest companies have more than 35,000 fans total, let alone added in 30 days, so of course I had to read on.

JVC Like It to Win ItJVC is holding a contest in which they give away one product each day to one of their fans on Facebook.  The contest requires people to do three things to enter:

  • “Like” the JVC USA fan page (fairly standard)
  • Submit their email address
  • “Like” a post on JVC’s wall that is dedicated to a JVC product for a chance to win that product (JVC posts a new product on the Wall every day)

As many astute readers of AllFacebook noticed, the last condition of entry is against Facebook’s Terms of Service.

4.2 In the rules of the promotion, or otherwise, you will not condition entry to the promotion upon taking any action on Facebook, for example, updating a status, posting on a profile or Page, or uploading a photo.  You may, however, condition entry to the promotion upon becoming a fan of a Page.

Seems pretty cut-and-dried, right?  Here’s where it gets interesting.  RMI, the marketing company that designed the promotion for JVC says Facebook explicitly gave them permission to run this promotion because they paid Facebook.  The article’s author, Dennis Yu, tries to clear up the confusion but ends up pouring fuel on the fire:

Were any advertiser to just start running a campaign as we did, that would clearly be against the Facebook TOS, as clearly stated in their contest rules. You have to have explicit permission from their team in advance and spend at least $10k.

We had approval at every step of the way from our Facebook rep– Blair Thomson-Levin– and we spent $25k.

The crew at later added a note to the article making clear that the promotion actually is against Facebook’s ToS, but as of today JVC is still running the promotion with no sign of slowing, so this would imply that Facebook does indeed condone the promotion.

Maybe I’m being too nitpicky?  Maybe Facebook should allow this promotion?  The problem with this sort of promotion is that it artificially inflates the “quality score” for JVCs posts, making them far more likely to show up in people’s friends’ feeds.  It breaks the whole “I liked this, so you might like it, too” model that Facebook has executed so well, and turns it into “I liked this because I was bribed, and a thousand other people were bribed, too, so here’s some spam on your wall.”  Not cool, guys.

So it appears that companies who can afford to fork out the cash to Facebook are allowed to buy their way past the Facebook Terms of Service.  This makes Facebook a much more effective marketing venue for wealthy companies than for startups, and could ultimately make it hard for them to compete at all.  Slimy?  Not a big deal?  Capitalism at its best?  Let me know what you think in the comments.

Note: I contacted Facebook’s Ad Support group asking them what it would take for me to run a campaign like this…no response yet.