Jan. 1, 2012 at 12:47 PM ET
By Kenneth Butler
1. HP TouchPad and webOS: Early termination award
It’s not just TV shows that get canned in a hurry. HP dropped its TouchPad tablet faster than NBC cut "Free Agents." The news was a shocker because HP paid lots in pilot production costs, namely $1.2 billion for the TouchPad’s webOS operating system.
HP released the slate in June and canceled it just two months later. Though it boasted a great interface for multitasking, the tablet was bulky and offered sluggish performance. Once the tablet was canceled, HP began selling remaining units for a cool 100 bucks. Consumers clamored, lining up early in front of electronics stores and stalking online retailers. At least the TouchPad was better than "The Playboy Club."
2. AT&T's faux G
If you bought an AT&T 4G smartphone in 2011, you were really getting 3G speeds. To manage expectations, the carrier provides the following caveat on its site for “4G” phones such as the Infuse 4G: “4G speeds delivered by HSPA with enhanced backhaul. Available in limited areas.”
Things seemed to be looking up for AT&T when it launched its true 4G LTE network in September, but the company refused to advertise average download and upload speeds. We think we know why: Our test results varied wildly. In Houston and New York, we saw download rates as high as 25 Mbps, but Chicago has offered speeds five times slower thus far.
3. BackFlip into oblivion
Here’s a judgment call that should appear under the entry for “bad business decision” in a mergers and acquisitions textbook. Cisco, the company that paid $590 million for Pure Digital’s popular Flip camcorder in 2009, canceled the device this spring. Until the purchase, Flip cameras created, defined, and lead the pocket camcorder market, thanks to an innovative flip-out USB port, ease of use, light handheld design, affordable prices, and great-quality video.
It was clear the company lost focus with the $279 Flip SlideHD (pictured) , an overpriced device with an awful resistive touchscreen and a confounding design. By April of this year, Cisco apparently didn’t want to bother with the Flip. The company killed the signature pocket camcorder, and cut 550 jobs along with it.
4. Bad JooJoo re-do
It takes courage to try, fail, and try again, but if you fail a second time, just stay down. In 2010, a company called Fusion Garage launched the JooJoo Tablet, a hefty 12-inch slate with bad battery life, a lame web-centric interface, and basically no apps. Fast forward one year and Fusion Garage was at it again with the Grid 10 tablet.
This time around, FG kept the size to a manageable 10 inches but insisted on creating another custom UI. Unfortunately, the new grid-based OS was neither as functional as Android nor as intuitive as iOS. In fact, it was the first tablet OS ever to require — and include — an on-screen map for navigating its home screens.
Fusion Garage's second chance came to a resounding end after a series of debacles earlier this month. First, the company was dropped — rather publicly — by its marketing firm, then it was revealed that FG could not obtain sufficient investor funding to continue production. In fact, the company found itself in such poor financial shape, it couldn't refund money for the Grid slates customers returned! Anyone else hear the sound of an elevator slamming to the bottom floor?
5. MeeGo goes nowhere
In February 2010, Nokia teamed up with Intel to form MeeGo, a Linux-based software platform that both companies expected to power netbooks, tablets, and—of course—smartphones. Just one year later, Nokia threw MeeGo in the trash heap in favor of Windows Phone 7. Intel put on a brave face for the platform at first, telling us, “We’re not blinking on MeeGo.” But we haven’t seen the OS show up in a single product since — other than the low-cost ASUS X101 netbook. In September, Intel announced it was ditching MeeGo in favor of a new OS project called Tizen.
6. AT&T/T-Mobile merger gets slammed
39 billion bucks. That’s the price AT&T announced it was paying for T-Mobile in March. The U.S. cellular marketplace, with just four major carriers, is already a small and fiercely competitive pond. Uniting the second-place AT&T and last-place T-Mobile would have resulted in just three big fish. It would also give AT&T-Mobile, more subscribers than Verizon, the current leader.
Though complaints of limited competition and disadvantageous consolidations erupted from analysts and journalists in no time, it took the Department of Justice six months to give those cries substance with a lawsuit challenging AT&T’s agreement. In November, the FCC weighed in and backed up the DoJ’s decision that an AT&T and T-Mobile merger threatened to saddle consumers with “higher prices, less product variety and innovation, and poorer quality service."
With the U.S. government challenging the deal on two fronts, AT&T was under considerable pressure to back out. And back out they did on December 22, but not without making serious concessions to T-Mobile: AT&T had to pay T-Mobile $4 billion in broken-merger fees and give the company loads of Advanced Wireless Spectrum in 128 markets.
7. The Netflix backlash
Netflix discovered the fastest way to lose nearly 1 million customers this summer. In July, the companyannounced a new pricing plan that, at minimum, charged customers $7.99 for its popular online streaming option and another $7.99 for its one-DVD-at-a-time mail service, a total of $15.98 a month, or 60 percent more than previous prices. Insult was added to injury when Netflix said its original prices no longer made “great financial sense.” Subscribers railed against the changes and, in September, Netflix CEO Reed Hastings apologized, but failed to adjust the new fees.
In fact, Hastings added salt to an open wound when he instead announced that Netflix’s DVD service would spin off into an entirely new website (terribly) named Qwikster, giving consumers two different video libraries, two queues, two monthly charges, and two headaches. Hastings and Co. eventually unified DVDs and streams back together under the Netflix umbrella, but the price change remained in place, losing the company 800,000 subscribers while sinking its stock price.
8. RIM extends "amateur hour" to a year
RIM’s decline hit nose-dive speeds this year. The BlackBerry PlayBook was a hotly anticipated tablet, but in April — when the 7-inch slate landed in hands behind an ad campaign that teased “Amateur Hour is Over” — many were disappointed to find that the device could not access email, calendar appointments or BlackBerry Messenger without first being paired to a BlackBerry phone. Add to that failure a new line of underwhelming (but beautiful) smartphones and a massive three-day service outage that shuttered email and BBM for tens of millions of device users (just days before the iPhone 4S’ on-sale date) and you’re left with one very, very amateur year.
9. Color me bad
No CEO should say this about his or her service: “Even I haven’t used the product in months.” But Bill Nguyen said it. Nguyen’s the founder of Color, an app for Android and iOS that melds photo-sharing with an internal social network that — at initial launch — only showed another user’s photos if they were in close proximity.
Back in March, Color was riding high off an investment of $41 million. The app launched soon after — and then...nothing. As it turns out, Color’s sharing function depended heavily on having a robust number of users close enough to walk over and say “hi” to each other, but the app never reached that level of engagement. Nguyen hasn’t given up yet; a new beta version of Color works with Facebook.
10. Mario's next level: Denial
Nintendo’s much-hyped next-gen 3DS handset sold just 380,000 units in its first three months on shelves, and many believe Apple is to blame for the low numbers. Thanks to the combined might of the iPhone, iPod touch, and iPad (not to mention Android games), Nintendo is no longer the mobile gaming king.
After Nintendo lowered the price of the 3DS to $169 from $249, many felt that the company should diversify its decades-long tradition of exclusive console games and make titles for mobile devices. CEO Satoru Iwata’s response: Over Link’s cold, dead body. The Japanese CEO dissed mobile games as low-value pieces of frivolous entertainment that can’t match console games in quality. If Nintendo doesn’t reverse course, don’t be surprised to see Mario in the unemployment line this time next year.
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