Wednesday, October 27, 2010

Competitive Language and Dismal Analysts

I am frequently subjected to analytical reports that PC gaming is
dying, Microsoft is dying, or is Apple, or Nintendo, or Sony losing
their dominance on the marketplace. I suppose analysts thrive on
predicting change, and I am starting to really see that this is
because without major shifting change, analysts aren't really
necessary. It is my experience that analysts are either making wildly
inaccurate claims or just as frequently, only loudly repeating
blatantly obvious trends, to the extent that they make accurate and
insightful predictions as often as a phone psychic.

Do they truly benefit from simple attention? Or do they not benefit at
all except from notice, gaining their financial benefits from
elsewhere? I think one staple of news reporting on analytical
predictions that supports these attention grabbing bids is a lack of
accountability, rarely sourcing the analysts responsible for claims,
or their credentials. Is this the consumer cultures lack of passion
for the subject? Possibly, but how can they care at all, there will
always be opinion leaders who are capable of understanding the
information. If the general public doesn't care, they'll still stop
reading after the headline, or after the first paragraph, but why
leave out the important details that promote accountability all

Is it partly because negative accountability would too adversely
affect a business model that is based on making predictions? If this
is the actual reason, then the model is fundamentally flawed at its
most basic levels. THe idea is that by analyzing real data, and paying
attention to trends, etc., analysts should be able to be more reliable
than the work of a good haruspex. But is it? If it isn't, why isn't
it? If it is, why isn't accountability being used to make the valuable
predictions of changing markets available to the public?

I think this issue gets a lot more complex when you start to ask
questions like whether or not these predictions should affect users
and consumers. In a healthy competitive marketplace, a user should
base their purchase on product specifications rather than marketshare
of the competitors. Why is it that more passionate consumers get tied
into questions of whether or not they are on the "winning" side? It's
only in instances where a consumer can make major investments, such as
HD-DVD vs Bluray, or Betamax vs VHS that consumers can stand to lose a
lot of money by being on the wrong side, but if they're worried about
the value of their investment, why invest at all until after a winner
is already clearly declared?

I think ultimately the examination of the practices of reporting on
analyst predictions to the public raises more questions than it
answers. It's hard to deny the human nature to desire to know the
future, or to side in competition, or seek publicity. I feel these
issues with the media will never be resolved. I just am disappointed
to see CNN predicting doomsday for a Microsoft, a business that has
done too much in its time and has its fingers in too many pots to
crumble, especially in a marketplace with so much flourishing
competition that a diminishing market share is not equivalent with
diminishing sales because of the continued growth. A more sound
prediction would have been changing strategies, or evolving branding,
or even just the note of the strengthening competition. Even apple
survived its down period through entrenchment, any corporate
technology solution has strong lasting power even after it has long
outlived its public usefulness, and has the power to change

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