Amazon sells Android apps - why this move and what's the impact ?

This week, Amazon opened its Android app store.
Why is Amazon moving in this direction ? Is it just for money earned selling these apps ?

There are probably much better reasons for this move.

First, Amazon is by far the most successful Digital Shopping Mall in US and Europe. As any shopping mall, there is no reason why not to sell a product which is sold somewhere else. Amazon can not sell Apple iPhone and IPad apps since Apple behaves as a high end brand, restricting sales in its digital, fully controlled experience iTunes store. It's thus about "one-stop-shopping" and comprehensive digital goods proposition.

Second, through this move, Amazon clearly positions itself in the M-commerce business. Amazon becomes fully relevant for Android mobile users and the market place can collect mobile phones numbers of their current customers or recruit new customers. This critical information added to the Amazon account will further enable the giant to further close the loop, possibly engaging in mobile advertising or couponing.

That leads to the third and probably the main reason. Facebook, Apple, Google and Amazon form the FAGA quatuor heading to the same M-commerce expected nirvana, each attacking from a different angle. Google already partially controls the mobile platform real estate, a very good advertising machine and an emerging cash desk. Apple has a fully controlled platform real estate, an emerging advertising machine and an efficient cash desk. Facebook probably has the most efficient platform real estate, (now even extending to feature phones through latest acquisition), including the most innovative advertising machine and is currently building a cash desk.
Amazon is the king of E-commerce, already having all ingredients online but missing presence on mobile. Through this Android store, Amazon penetrates for a low budget an efficient mobile platform real estate to complement a too small Kindle footprint. Amazon is thus strengthening its position in this FAGA quatuor.

The next question concerns the impact on device vendors and mobile apps ecosystem. Will this help or arm Google ? Does it impact Apple ? What about Amazon selling windows phone 7 apps  or Blackberry apps ?

This Amazon Android app store on one hand is an additional factor demonstrating to consumers the openness of Android ecosystem. It can only thus increase relevance of Android phones. On the other hand, it probably arms Google in its quest to spread its Google Checkout, so important in the FAGA war.

Apple is probably not directly impacted, keeping their closed ecosystem and currently suffering (a lot of people would like to suffer this way) the consequences around censorship and too obvious dominance.
BlackBerry apps mainly concern business and are probably less relevant for both Amazon and Blackberry.

The open question remains for Windows phone and especially in the context the Nokia deal. Nokia stopped its unsuccessful OVI store. Amazon could probably be a good partner for Nokia selling special Windows phone apps. But will Microsoft authorize this or will Seattle monster engage in FAGA war to make it FAGAM ?

Future will say ...

Benoit Quirynen

IPad 2 - price points are set for competitors

Today, Steve Jobs announced the IPad 2, the feature list and the prices for the new device.

The main features are sitting in the engine, except the so expected cameras (front and back) that are now on board. But the most important part is the price which stays the same.

This now shapes the market for till end of 2011.
No one can sell a successful tablet more expensive than IPad 2. The only reason buying another tablet than IPad 2 is a lower price.
Let's make a tour of the challenged tablet vendors:
- Motorola Xoom equiped with Android : similar feature set as IPad 2, probably less powerful CPU, certainly poorer batteries and higher price. This one is xoomed to fail.
- RIM Playbook : poorer features, probably less powerful CPU, certainly poorer batteries, same prices as IPad 2. They can perhaps survive focusing on corporate market but it will be bloody challenging and they will eat their margin anyway through rebates on volume based deals.
- Samsung Galaxy : Samsung announced a 10.1 inch in MWC and will announce a 8.9 inch at CTIA end of March. Since Samsung did not yet publish any price, they still get a chance.

Let's take the positive angle. What could be a competitor of IPad 2?
- a device in the range of 300$ or 300€,
- 9 inches minimum,
- a USB able to plug any USB webcam,
- a USB able to plug any USB dongle, even 3G/4G,
- decent screen (could be less robust),
- decent CPU (even slower than IPad),
- WiFi only,
- Android 3.0 Honeycomb on board.

If nobody shows up, IPad 2 will have 90% market share at the end of 2011.
This will strengthen their domination of which they often abuse.

Who'll be the first ? Medion, ASUS, an EEETablet, Samsung, LG, Nokia (just kidding for the last one).

Future will say.

Benoit

A hype revival of vintage mobile video communication in MWC 2011

Let's get back to 2004, the hype in Mobile World Congress for the first time in Barcelona is about video communication. Thanks to 3G and embedded cameras in the mobile phones, people can proceed to a mobile video call from their device. It's huge. Telecom operators imagine gateways to enable subscribers to proceed with video call between a mobile and a PC to compensate the low numbers of nascent 3G phones. Two years after, this turns to be a failure. Damned, consumers are not using it.

Several reasons have been given at that time : cameras not powerful enough, screen definition too low, requirement of "high quality real time bandwidth", low willingness to use due to high intrusiveness and, finally, too difficult to take a continuous movie of its own image in good condition for the other party (sun, image stability, etc...).

2011, Mobile World Congress, perhaps one of the last time in Barcelona. The hype is back on ... mobile video communication. What can explain the revival ?

Some progress have been done on the technology side, especially on the devices now much more powerful in terms of CPU, screen and camera. Moreover, Skype, which has largely contributed to popular usage PC-2-PC of video, is everyday increasing its penetration on mobile phones.

However, the major factor could be the support of the magician Steve Jobs through Facetime, the video communication service from Apple. US investors suddenly start to poor money in these technologies. Of course, these "dollar cow-boys" did not necessarily participated to the hype 8 years ago since US was still at that time an underdeveloped country in terms of mobile usage, fighting to make CDMA EVDO operational.

Despite device technology evolutions and financial support, some challenge remain on the way to a large penetration of this service on mobile phone. Video communication still is intrusive and image stability did not significantly improve when you have your mobile in your hand.
Another main hurdle - requirement for a high quality network - will still exist for several years. Watching Youtube, users can benefit from buffering in the device, which is not possible with real time communication. This thus requires a continuous quality and bandwidth, which is challenging for a good quality. Just have a look on your device how many times you switch from GPRS (G) to Edge (E) to 3G (3G) to HSDPA (H) and you will see the stability of the data network, especially when you move one meter in your office or when your neighbor starts watching Youtube (because you share the cell data capacity with your neighbors, you like it or not ;-).
Moreover, in terms usage, some analysts state that consumers would use the service to show what is around. Capability to record a video and send it by MMS or email (on smartphones) exists for years. MMS video traffic is very low due to high price for upload of large volume. Imagine the price range when telecom operators want to guarantee a higher quality all along the call.
Finally, since telecom operators face problems with huge data traffic generated by smartphones and USB dongles, they will normally price the video call higher than voice call. Who is willing to pay more for a good quality video call ? It's true that Skype video calls are used on fixed Internet but using video or not is always the same zero price. Willingness to pay is probably the final killer of mobile video communication.
And if some operators would offer video call service at the price of voice calls in order to maintain price of a voice/video call revenues, they would significantly increase their cost without increasing the revenues. Better use this bandwidth to offer more low consumption services.

I had the chance to live the complete previous cycle of mobile video communication. We thought at the beginning that we were very successful since we signed a lot of contracts with major telecom operators but consumers brought us back on earth a bit later.
So, if you are in this business, have fun but do not expect your venture to be funded for a long time. Dollar cow-boys will probably stop soon pooring money in bottomless pit when they will discover the lack of fruits and remaining hurdles of previous experiences.
There are probably much better ideas for new telecom services, focused on low bandwidth for higher profitability of the whole value chain.

Future will say.

Benoit Quirynen

AOL acquires The Huffington Post - capitalism against illusion of freedom

AOL has acquired this week The Huffington Post for $315 millions.

The Huffington Post is a kind of newspaper written by citizen bloggers. AOL expects to sell ad space around what became a popular real estate. As outlined in The Herald Tribune by David Carr, it's funny to see that all these bloggers have created value for Miss Arianna Huffington.

A lot of this content is created by citizens, inspired from other articles in paid newspaper (as this one ;-). Before acquisition, it was difficult to attack a company with no fund. Tomorrow, shooting for the 2.2 $B from AOL market capitalization risks to tease a lot of content providers willing to protect their assets and value their content.

Moreover, now that citizen bloggers know they directly feed advertising revenues of AOL through their posts, they will perhaps not demonstrate the same appetite to contribute ... at least on this particular real estate. Of course, AOL can pay the best contributors but the relationship then becomes commercial with a totally different mindset.

On the other hand, will readers continue to absorb this content the same way since the spirit has evolved ?

Anyway, this move is the demonstration of capitalism against feeling of freedom. And the most cynical is not AOL which pays money but Ms Arianna Huffington who receives money valuing the efforts from a lot of others.

Will citizen bloggers go on supporting this attitude ? Will readers change their behavior ? It's a good test for our whole society.
Future will say.

Benoit Quirynen

Microsoft Surface 2.0 - a "touch screen TV"

In CES 2011 earlier this month, Microsoft demonstrated Samsung SUR40 running Microsoft Surface 2.0.
The technology to capture the hands, fingers or object moves on a 40 inches screen has evolved from cameras to sensitive screens.
The price of this new version still is 6000€+. Even if divided by 2 from previous version, this should prevent usage by consumers.
The most important move however with this version is the possibility to hang the large screen on a wall, coming from horizontal use cases to vertical use cases.

The use cases addressed through the demos in CES were:
- horizontal, combined with NFC, to recognise objects, being Redbull cans for immersive advertising or active coins for "poker like" gaming,
- vertical, for museum to enable visitors exploring a large interactive diaporama.

Limitations of horizontal use cases were already addressed here.

SUR40 hanging on a wall becomes a "touch screen TV". Demo in museum, as presented in CES, limits usage to one single user only. This would mean quite huge investment if a museum wants to support 5-10 simultaneous users as a painting or passive wall paper.
The other case demonstrated in the show tells a story about a bank proposing a draw, forcing customers to come in the bank to know if they win (let's imagine the frustrations).

The Kinect technology looks to me much more appealing for move detection in front of a large screen than Surface. Moreover, Kinect decouples the screen technology from the interactive part, which is more scalable "market wise".

So why not investing all Microsoft money sunk in Surface innovations to make Kinect move detection much more accurate, unbeatable ?
One of the reason could be the big challenge of innovation management. From a team management perspective, it's much easier to start an innovation project than to stop it.

Curious to see the success of Surface 2.0 and/or if a Surface 3.0 version will exist.

To be continued ...

Benoit Quirynen

IPad2 - will definition be twice higher ?

Some rumours about IPad2 state that the screen definition would be twice higher, becoming 2048x1536 instead of 1024x768.

Today, the Wired magazine on IPad already consumes more than 500MB in terms of bandwidth and disk size. Since Wired is often leveraging the full capacity, this could lead to a severe increase (media assets - image and video - take the larger part) in bandwith consumption (for consumers and/or for telcos) as well as on-device disk space (up to 2GB).

All this would only opertae if Apple manages to keep convincing publishers using its tablet after having sucked the customer relationship - as announced on Friday.

To be continued ...

Benoit Quirynen

Print publishers - it's time for a Copernican revolution

Today, we see a lot of print publishers willing to leverage IPad interactive capabilities to better monetize their assets. Since paper is currently their main source of revenue, they thus study how they could extend their IT systems and processes with minimal impact to deliver interactive experience.

Experience proves that adding interactivity along the way is complex and painful, often requiring manual costly processes. For a future-safe approach, publishers should consider redesigning their whole IT, taking digital and interactive as the source and "passive paper" as one of the multiple and diverse outputs.

Some of them already started this move in to adopt to the online space. It's only the beginning. This definitely requires a "Copernican revolution" and related change management processes to move the whole company in 21st century.

Thanks to evolutions during the last decade in this domain, by both industries and open source, this investment will make it much more cost effective and seamless for introduction of new formats and extension to new devices.
Having "rock-bottom" costs for the production factory can leave the money on the long run to either attract top writers and bloggers, bringing the right audience and/or give flexibility to evolve in terms of business model.

Yesterday, moving in the new space was an opportunity. Tomorrow, keeping current methods will yield a threat.

Are "Print publishers" ready for this change ? Future will say.

To be continued

Benoit Quirynen

Content is king, cross-device digital rights is key ... for e-paper as well

The limited number of e-books available on IPad pushed me to install Amazon Kindle app on this device.
In my humble opinion, IBooks reading experience is better but reading Winnie-the-Pooh starts to be boring ;-)

Moreover, thanks to Amazon, I can choose to read it on several of my devices where Kindle app could installed (IPad, IPhone, PC, Android systems, etc...). Even if reading a book on a phone is not convenient at all, at least I feel that my digital rights are respected. If I loose or break my IPad and wants to buy back a Samsung tablet equipped with Android, I'll have access to my library of e-books.

Cross-device digital rights is a MUST HAVE for publishers moving to digital world. Apple can not lock readers to his devices using content created by others. It tried it in the past with music. It had to extend afterwards to deliver MP3 versions of music.

You will argue that I could read some books on iBooks and some others on Kindle. And you are right. But today, in my mind, I can accommodate the user experience of Kindle and prefer to have future-safe digital rights. So next time, I'll first search on Kindle.

For newspaper, I also experience the "content is king" assertion. I subscribed to a newspaper quite limited application - even painful from a user experience point-of-view. However, I renewed my subscription to keep access to the content which I find useful.
On the side of cross-device digital rights, I'm blocked. Even if I have a subscription on my IPad, I can not read it through my Android phone. I consider this as unacceptable since I already paid for accessing this content.

When will iBook be open, when will newspaper support cross-device digital rights ?
To be continued ...

Benoit Quirynen

Microsoft, the "GM of software" in 2020 ?

Less than 3 months after the launch, "the other Steve" (Ballmer) stops the Kin. This "youngster social network phone" did not really virally spread. There is no shame to fail once but repetitive failures can seriously hurt long term.

Microsoft is suffering a lot with new initiatives. They keep going below the radar with mobile. Their IPTV is confidential in terms of numbers because IPTV is rather limited worldwide. Nintendo Wii sets XBox nearly out of the shelves. HP bought Palm, giving up Windows 7 for tablet. This famous tablet could seriously damage their well established PC kingdom. Windows Live is nothing compared to Facebook. Hotmail is suffering from Gmail. Bing maintains a comfortable second position, never able to compare with Google.
Microsoft, the "General Motors of software" in 2020 ? Unable to choose a battle to win it, it tries to resist on all fronts. 


The problem is not short term. The big M generated more than 14B$ profit in 2009, mainly through Windows & Office. But on this battlefield, they are attacked by serious players.

For new races, Microsoft tends to become the "Poulidor of technology", always being a second or third, never winning one. They just can't invent a product consumers love. And for years now, each new trial, a kind of "Me Too plus minus something", damages their brand. Who is today proud buying a consumer M product ? Who will show off with a whatever "Windows xyz" ?


Some will say that Microsoft did never invent anything, just smartly copy-pasting. On the other hand, the same must recognize Microsoft brought scale to massive computer usage. 
Others will argue that, during last decade, nobody bought an M product because they loved it. It was just needed. At that time, this was sufficient to become #1. But a successful "20th century strategy" does not probably work the same way in 21th.


If Microsoft wants to build sustainable consumer products, perhaps they should press "pause button" during 2 years, just keeping pace on different fronts. They could then benefit of this period to invest and come back with something very innovative, an amazing product 1.0, something changing life, a product people love, implementing a dream.


After cash generated by W(indows), mitigated success of X(box) and failure of Z(une), will Microsoft focus on a "Y" product, something fundamental, even metaphysical in order to recover #1 position ? And don't tell me it's just about the "Y" of Yahoo, except if the ambition is about keeping (a less risky but short term profitable ?) #2 or #3 position, as GM in last decade.

Microsoft has cash. There are so many things to invent. Don't tell me they lack imagination and creativity !

To be continued ...

Benoit Quirynen

IPad and elderly - magic device contributing to reduce Digital divide ?

In the series, what can you do with an IPad, here is a small funny video (thanks Pascal !). Beyond this funny marriage between IPad and Velcro, I also made some experience, leaving the beast in the hands of elderly.
It's just incredible ! This is neither a quantitative study nor a qualitative one. No statistical value - just feedback. Even 70+, reluctant to use Internet, started to naturally browse with the device. Reading a book was perceived as pleasant, especially since you can increase the font size. They managed to write an email (an address, a subject, a text) and read other ones. Gestures were perceived as very natural. Watching video was also nice but will not replace TV screen - too small for long period of time. Photos were naturally appreciated, not only due to the device but also due to the persons appearing on pictures.

As you see, no complain about lack of video camera, USB ports or slots for memory cards as you can expect ;-) The single negative comment was about the wastage - the back of the page you turn in iBooks is white. Apple could have printed both sides of pages. What a wastage of paper !

A study published in France states that 85% of persons who want to buy an IPad don't know the capabilities and have no idea about what they will actually do when they'll receive it. Funny to see that persons who don't necessarily want an IPad know how they would make use of it. A special kind of "Digital divide".

Just try out and share with us what you observe.
To be continued ...

Benoit

IPad - not sure paper will disappear tomorrow

For 4 months, due to IPad, we read a lot of information about newspapers and magazines moving digital. Notepod creatively surfs on the wave the other direction ... Nice idea !

Notepod proposes block of sheets of paper with IPad and IPod format/dimensions so that designer can sketch screens at 1:1 scale, reducing the risk for bad design.

Paper probably stays for a while the best medium when you design a screen alone or with your colleagues around a physical table.

We will see how much time this "while" will stay.
To be continued ...

Benoit Quirynen

IPad 3G & impacts for mobile service providers

IPad 3G will force mobile service providers to rethink some of their mobile Internet offerings or face huge number of complaints reaching their customer care. User experience has a volume cost.

Beside the known impact of IPad for mobile service providers with the need to support micro SIM cards - the single format supported by the magic device, another phenomenon touches volume and bandwidth consumption.

Today, we see two different trends in terms of Mobile Internet offerings on the two sides of Atlantic ocean. On one hand, we see in Europe mobile service providers extending their offering towards unlimited offers (however never truly unlimited). On the other hand, AT&T and Verizon start to limit the previously true unlimited.

IPad creates a higher demand in terms of volume and bandwidth. As an intermediate device between PC and mobile, offering an incredible browsing & multimedia user experience, IPad requires HD websites, increases consumption of pictures and videos (Facebook, Picasa, Youtube, etc...). It's just another scale compared with "pocket size" devices.
Moreover, footprint of IPad applications is exploding. Wired magazine, presented end May, offers a very nice magazine but the price to pay, beyond the app store price, is the download of about 500 MB - yes half a gigabyte. BMW also offers a very nice free magazine, containing beautiful pictures and very design layout, but requires download of 157 MB. Each page is a high definition picture.

We can thus guess that a 2GB offering per month will be the bear minimum for an IPad 3G consumption. Or consumers will have to quickly figure out, before their first bill, that they primarily should download applications and consume Internet through home WiFi networks.
If telecom service providers do not adapt their offerings and do not warn consumers to take care of their IPad usage (through a continuous monitoring of the "connectivity icon"), this could lead to severe increase of complaints - as it happened for iPhone bought without special subscriptions.

On the other hand, Apple would probably be nicely inspired to add some settings describing "connectivity subscriptions" within its IPad in order to suggest correct "connectivity behavior" for the benefit of their customers.

Some will say that it's only a transient situation because everything will be "always-on". This however probably requires an evolution of business model to finance LTE networks and scarce spectrum resources or Femto equipments. And it's only the beginning since iPhone 4 also comes with a better screen.

The answer to the question "who will pay for the volume ?" is quite easy : "obviously the consumer !". The actual questions are more "who will charge for the volume ?", "will this volume cost be disguised or not for the consumer ?"
To be continued ...

Benoit Quirynen