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When convenience wins over quality …

Point and Shoot cameras are basically dead, killed by the much more practical use of smartphone. Why buy a camera if you already got one, always with you, in your smartphone? Graphic Credit: PetaPixel

I spent over 40 years working in a telecommunication company and in the of those last years competition from “outsiders”, like Skype and later the Apps avalanche,  started to threat the incumbents’ business. I remember my big bosses declaring that the fight will be won over quality. And I remember being scolded because I kept saying that the quality seen from the network was not the one seen from the users of the network and the network quality, no matter how high will never win.
Looking back, I can say that I was right, the network quality did not win the market. And yet, I still hear the “big bosses” boasting that they will re-win the market by improving the network quality.
The problem is that there is already more quality in the network than the users are willing to pay. Hence, if someone else is offering a low price, even bundled with lower quality, it will win the market.

As technology progresses, the quality will keep growing, even though very few will notice and even fewer will be ready to pay a premium for that.

It is not just price, often it is about convenience. I can settle for the bread I can buy near my home, even though there is a better one 6 blocks away. The one closer to home is … good enough.

Consider the graph. It shows the rise of the “Point and Shoot” cameras starting around the turn of the century. In 4 years they have managed to equal (in sales) the number of compact film cameras and after 2 more years, by 2005, they completely killed the compact film cameras. The quality of the P&S digital cameras was way lower the one provided by film cameras but they were more “convenient”. You could look at the image immediately after the shot, took another one if it didn’t turn out as you expected. The price per click was zero. The number of photos taken skyrocketed. By 2005 the first smartphones equipped with a digital camera were on the market and the quality of their photos was … ghastly. Yet, you always have the phone with you and people started to use the camera in their phones. Of course, over a 5 years time the quality of those photos improved significantly, although it remained below the quality of the P&S that in the meantime also improved quite a bit.

The P&S sale peaked in 2010 and then started to slow down, and the it took a skydive fall. The smartphones have now replaced the P&S completely. Nikon has just announced the closing down of one of their manufacturing plant in China and puts the blame on the smartphones.

Convenience won over quality, once again.
Of course quality is not an abstract concept. It has to be understood in a specific context and in the real world quality perception is subject to thresholds.

The first one is “acceptable quality”. That is the thresholds that killed the compact film cameras. As soon as the P&S reached an acceptable quality the film cameras faded away. The second one is the affordable quality. That is what killed the telco business. True, Skype quality was way lower than the one offered by circuit switching (now it is basically as good as…) but the price attached to it made that quality affordable, and the one offered by Telcos “unjustifiably expensive”. As internet quality improved VoIP crossed also the “acceptable quality” thresholds winning many more users.
The third thresholds that technology evolution is creating is the one of perceivable quality. Once you reach a point where you can no longer perceive an increase in quality, you no longer care for “additional” quality.

This is what is happening in the television world. 4k screens are at the edge of our perception, moving to 8k increases quality (resolution) but we are no longer able to perceive it.

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the New Initiative Committee and co-chairs the Digital Reality Initiative. He is a member of the IEEE in 2050 Ad Hoc Committee. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.