In part one of this blog post, I looked at how Texas Instruments erred in developing a ‘better’ product – that customers didn’t actually want to buy. That was back in the early 1980s.
Fast forward now to the end of the 1990s – 1996, in fact. I’d left TI, but was invited to return to head up European marketing for a revolutionary new display technology a brilliant TI engineer, Dr. Larry Hornbeck, had invented. Known as Digital Light Processing (DLP), it used arrays of microscopic mirrors – each equivalent to a pixel - tilting back and forth thousands of times per second to reflect (or not) light onto a screen. It promised to revolutionize screens and displays as it was capable of delivering image quality far superior to that obtainable at the time from LCD technology.
The first DLP-based projector came to market in 1997, and soon, the projector industry was embracing the new technology. That, though, was not what TI really wanted. TI saw the real opportunity as being for consumer TVs with their potential volumes in the millions – and the opportunity to establish a household brand name.
Success, the company believed, was guaranteed. At the time, flat panel TVs were just becoming popular. Plasma was heavy, expensive, and suffered from image burn-in. LCD TVs delivered an image quality that was only barely acceptable. While a DLP-based TV wouldn’t be quite as slim and sexy as either plasma or LCD (DLP TVs relied on rear projection), TI believed that consumers would happily trade slim and sexy for significantly superior image quality.
To reinforce its branding efforts, TI invested hugely in digital cinema projection technology. The thinking here was that movie-goers would see a fantastic image on the screen, know that DLP technology was responsible for it – and rush out and buy DLP TVs. In June 1999, Star Wars Episode I – The Phantom Menace saw the first ever digital projection technology employed to screen a major Hollywood movie on the west and east coast. The projectors used TI’s DLP technology.
So far as TI’s aspirations for DLP as a consumer TV technology were concerned: they bombed. (Yes: we’ve been here before.) It turned out that consumers didn’t want better image quality: they wanted slim and sexy. It should also be said that TI perhaps grossly underestimated the rapidity with which Japanese LCD manufacturers would up their game, to the point where the difference in quality between LCD and DLP no longer existed.
The DLP story does, however, have a happy ending. DLP can now be found in around 50% of all projectors being launched, and remains the favoured technology for home theater. And: there are now over 170,000 movie theaters worldwide equipped with digital – as opposed to film - projectors , with around 85% of them using TI’s technology.
Now, in the interests of balance, it should be said that you don’t get to be a $17 billion company by regularly developing products that don’t succeed as you’d hoped. TI has been hugely successful – not to mention influential – which is perhaps what makes the stories of the TIPC and DLP so remarkable. Even the best and biggest companies are allowed occasional mis-steps.
However: to the moral of these stories. Understanding why customers buy what they buy is by far the most important consideration in developing new products. That’s what we strive to do at Abaco. Superior technology won’t always win. ‘Better’ isn’t always better.