Jul 292012

evil Apple As a multinational corporation Apple is many things – a firm that designs and sells consumer electronics, software, personal computers and it’s the largest distributor of digital music. They are also a growing force in eBook sales though a recent action to ban a book due to its mention of Amazon reveals a astonishing degree of unprofessional behavior. It resulted in Doctorow pulling his own works from the iBookstore and for a content distributor their behavior is simply unfathomable .

It’s worth reading Doctorow’s full explanation in boingboing:

Author Holly Lisle has a series of online writing guides that she sells. One volume of this, “How To Think Sideways Lesson 6: How To Discover (Or Create) Your Story’s Market” was rejected by Apple’s iBooks store. At first, Apple told Lisle that she wasn’t allowed to have “live links” to Amazon in her books. So she removed the links and resubmitted the book, and then Apple rejected it again, telling her that they wouldn’t sell her book because it mentioned Amazon, a competitor of its iBooks store.

But I also will not deal with this sort of head-up-ass behavior from a distributor. You don’t tell someone “The problem is the live links,” and then, when that person has complied with your change request and removed the live links, turn around and say, “No, no. The problem is the CONTENT. You can’t mention Amazon in your lesson.

This is not professional behavior from a professional market.

And cold moment of truth here—you cannot write a writing course that includes information on publishing and self-publishing and NOT mention Amazon. It’s the place where your writers are going to make about 90% of their money.

So I’m pulling ALL my work from the iBookstore today. I apologize to iBookstore fans. I tried. Hard.

But I’m done. 


May 222012

Waterstone's bookseller Cuts Innovative Deal with AmazonThere’s been no letup in the pressure on bookstores with the continued growth of eBooks, but Waterstone’s, the largest bookseller in the UK is taking a different approach. Cutting a deal with Amazon, Waterstone’s will refurbish stores, create dedicated areas for digital books, add cafes and free wireless access and - sell Amazon Kindles.

You might wonder if this is a last gasp of a dying business/delivery model, or if Waterstone’s is pursuing an innovative approach that acknowledges the future omnipresence of eBooks in a highly digital environment. According to BBC News:

As well as selling the Kindle device, Waterstones will allow Kindle users to digitally browse books and take advantage of Waterstones’ special offers.

In a statement, James Daunt, managing director of Waterstones, said: “The best digital readers, the Kindle family, will be married to the singular pleasures of browsing a curated bookshop.”

Jeff Bezos, Amazon.com founder and chief executive, said: “Waterstones is the premier High Street bookseller and is passionate about books and readers – a dedication that we share deeply.”

Analysts say that Waterstones has little choice but to ally itself with Amazon.

“If readers are increasingly downloading books, then it is better for Waterstones to embrace that behaviour than to try and work round it,” said Douglas McCabe from Enders Analysis, told the BBC.

“Kindle has a massive market share of digital book reading in the UK, and Waterstones will start to take a cut of it.

“However, for all its success, Amazon does not have a solution for ‘discovery’ in physical or digital [books] that even comes close to the merchandising skills inside a branch of Waterstones,” Mr McCabe added. 

No choice or a creative move? To me, the most striking part of this project is not the word “eBook” but the phrase: “the singular pleasures of browsing a curated bookshop.”  The idea that the selection offered within the physical spaces of Waterstones is “curated” is important – we don’t often hear that term used in the context of a bookseller.

Like traditional print media, bookstores need to rethink what they do well and what they can offer in a highly digital environment. What is the value of the physical space? What might you sell that the eBook reader cannot deliver within its current technology?  Perhaps you might sell eBooks, coffee, space for conversation, and a unique selection of physical books. Don’t sell – curate.

Of course, once you head down the path of innovation, you also need to rethink what your employees should be doing. For a bookseller, you want a well-read staff with people skills because you’re now hiring curators. And maybe they should get something more than minimum wage. And do something other than stand behind the cash register. Waterstone’s may have taken an initial innovative step, but they probably should take a stroll over to an Apple store and look at their self-checkout process. Break the mold if you want to survive.

May 052012
Kindle Fire

Kindle Fire

Late last year, one would have thought Amazon’s Kindle was doing very well. Yes, Apple’s iPad dominated the tablet market but Amazon could boast that the Kindle was the most successful Android tablet to date. Sales were growing and Kindle buyers would provide a steady stream of revenue as they bought books and merchandise from the Amazon ecosystem. The Kindle Fire did exceptionally well during the 2011 holiday season so what could be wrong?

Plenty, it turns out. Apple sales fell in the post holiday months but its overall share of the tablet market surged from 54% to 68%. Amazon doesn’t break out tablet sales but rumor has it that the demand for Kindles collapsed as the Kindle Fire’s LCD is significantly better than the e-ink screens of the lower priced models. Worse still, it seems the the Kindle Fire is not selling as well as expected, leading Digital Trends to comment:

Amazon timed the Kindle Fire — and set its $199 price tag — to capitalize on the end-of-year holiday season, and the strategy seems to have worked: the Kindle Fire was a hot holiday item. However, new figures from IDC claim that Kindle Fire sales since the holidays have essentially tanked. IDC claims the Kindle Fire’s share of the worldwide tablet market during the fourth quarter of 2011 was 16.8 percent; but during the first quarter of 2012 that share fell to just 4 percent. IDC found that sales for all Android tablets were “down sharply” in the first quarter — and, of course, Apple sold 11.8 million iPads

And the future? Not clear but with Microsoft investing in Barnes and Noble’s Nook, Google planning to offer its own tablet, and with Apple pushing new models down the development pipeline, things look cloudy indeed. Amazon is a curious company: at times they seem to execute brilliantly. And then they turn around and lose their way. Not all that different from Starbucks.

Apr 282012
Android Device Chart

Android Device Chart

Looking at the data, you could be charitable and just conclude that Android outgrew Google; or you could be a bit more cynical and say that Google lost control of it’s own project. From Business Insider:

 Amazon’s Kindle Fire now has 54.4% of the Android tablet market in the U.S., according to comScore.

This means Google has lost control of the Android tablet market to one of its newest mobile rivals after just a few months.

Amazon used the base layer of Android to build its own operating system and layered on links to its own services. Google doesn’t have its app store or any of its services on the Kindle Fire.

Amazon isn’t the last company to do this. Phone makers are planning on forking Android making it more fragmented and ultimately cutting Google out of the loop.

The success of the Kindle Fire is proof that you don’t need Google to make a popular Android-based device.

Google has a large enough revenue stream that it surely doesn’t need Android. But there may well be issues down the road as Google’s own tablet could go head-to-head with Amazon’s Kindle Fire. If that happens, they just funded their own competition.

Apr 192012

Once upon a time (1995), Best Buy had $25 billion in sales while Amazon was a scrappy start-up in Seattle with Jeff Bezos loading books into his car for trips to the post office. But over the years Best Buy grew, stumbled, grew some more, and stumbled much more while Amazon sales took off (profits for the latter were another matter).

And this year it appears that Amazon will finally overtake Best Buy which has closed its Circuit City big-box stores, replaced its CEO, and is now looking for a new model of small format stores. Not that they haven’t tried with international expansion and the acquisition of Geek Squad, but Amazon has also gone global and rapidly diversified with a broad range of products. They are competitors, but not directly; this is more about business model that is having trouble staying on track in a digital economy that Amazon helped invent.

Perhaps Best Buy will survive, but without some serious innovation, the future doesn’t look good. Chart is from Read Write Web:

Amazon - Best Buy Sales Chart

Apr 092012

Tech War Faces - The Gang of Four: Apple, Google, Amazon and Facebook

With Facebook’s announcement that it will acquire Instagram, it’s worth returning to an article in Fast Company not quite six months old that talked about “The Great Tech War of 2012″ between Apple, Google, Amazon and Facebook. Of course, most of us use the services of all four of these technology “giants” – what Eric Schmidt, Google’s executive chairman and former CEO referred to as the “Gang of Four”. Microsoft might be included as number five, but despite the ubiquity of the Windows OS, its forays into online purchases and social media have been less than stellar.

It’s worth quoting Farhad Manjoo’s article at length, if only to make apparent how rapidly the technology environment is changing, even over the past six months. From Fast Company:

There was a time, not long ago, when you could sum up each company quite neatly: Apple made consumer electronics, Google ran a search engine, Amazon was a web store, and Facebook was a social network. How quaint that assessment seems today.

Jeff Bezos, who was ahead of the curve in creating a cloud data service, is pushing Amazon into digital media, book publishing, and, with his highly buzzed-about new line of Kindle tablets, including the $199 Fire, a direct assault on the iPad. Amazon almost doubled in size from 2008 to 2010, when it hit $34 billion in annual revenue; analysts expect it to reach $100 billion in annual revenue by 2015, faster than any company ever.

Remember when Google’s goal was to catalog all the world’s information? Guess that task was too tiny. In just a few months at the helm, CEO Larry Page has launched a social network (Google+) to challenge Facebook, and acquired Motorola Mobility for $12.5 billion, in part to compete more ferociously against Apple. Google’s YouTube video service is courting producers to make original programming. Page can afford these big swings (and others) in the years ahead, given the way his advertising business just keeps growing. It’s on pace to bring in more than $30 billion this year, almost double 2007′s revenue.

Facebook, meanwhile, is now more than just the world’s biggest social network; it is the world’s most expansive enabler of human communication. It has changed the ways in which we interact (witness its new Timeline interface); it has redefined the way we share–personal info, pictures (more than 250 million a day), and now news, music, TV, and movies. With access to the “Likes” of more than 800 million people, CEO Mark Zuckerberg has an unequaled trove of data on individual consumer behavior that he can use to personalize both media and advertising.

Amazon, Apple, Facebook, and Google don’t recognize any borders; they feel no qualms about marching beyond the walls of tech into retailing, advertising, publishing, movies, TV, communications, and even finance. Across the economy, these four companies are increasingly setting the agenda. Bezos, Jobs, Zuckerberg, and Page look at the business world and justifiably imagine all of it funneling through their servers. Why not go for everything? And in their competition, each combatant is getting stronger, separating the quartet further from the rest of the pack. 

There are no borders – in light of that, Facebook’s acquisition of Instagram is minor, something almost to be expected. Especially when you consider that Facebook was born in the browser era and Instagram an entirely mobile platform (until last week with the release of an Android App, you could only use it on an iPhone). When you’re out on the street, it’s much easier to update your online presence with a photo rather than text. Zuckerberg said that Facebook intends to keep Instagram a separate development, allowing it to work with rival platforms. But what no doubt worried Facebook was that Instagram had already reached 30 million users (who upload five million photos a day) in less than two years and just closed on a round of funding to provide it with $50 million in financing through several investors, including Sequoia Capital, an early backer of Google.

And Instagram? It is indeed the stuff of digital dreams, of the essence of technology. For most of their early days (which have not been all that many), the four employees (including the two founders) sat in the cramped old offices of Twitter in the South Park section of San Francisco, four tables pushed together in the center of the room. Last year, they added more staff (now at 12) and moved across the street. The two founders created an early version of the platform while graduate students at Stanford, but it took off with a rewrite and an App for the iPhone. As Melissa Parrish at Forrester Research noted:

It’s the Web fairy tale that all start-ups dream of. They took a simple behavior — sharing pictures with friends — and made it a utility that people want.

Turning a simple human behavior into an easy to use platform – this is the essence of the digital revolution. There will be more Instagrams, and many more acquisitions from the Gang of Four.


Mar 292012

The company Kiva Systems was just sold for $775 million. They make robots. Very cool robots. Robots that don’t really look like robots. Robots that run around a warehouse all day to bring merchandise to order pickers. And rearrange the left-over merchandise based on demand.

You buy a company like Kiva if you’re heavily dependent on automated warehouses.  You buy it if you’re already a customer and want to bring the technology in house. You buy it if your business depends entirely on product range, pricing and speed of delivery.

You buy it if you’re Amazon.com.

Here’s three minutes of the Kiva System robots doing their thing (via Kottke.org):

Oct 102011

Since last April, the Kindle has topped physical books in sales on Amazon and with the Kindle Fire, the ecosystem will continue to expand. More remarkably for a device introduced in 2007, this has taken place while the sales of printed books have continued to expand rapidly for Amazon in the current Recession. But with the new Kindle Fire on the market and older models facing price cuts, expect digital books to far exceed traditional book sales on Amazon (and elsewhere). The eBook market has not resolved all the issues at stake, but the format has finally hit a convenience threshold. And of course, the introduction of the iPad (03 April 2010) has had something to do with this as over 30 million are now in the hands of consumers.

And Microsoft? They announced in August that Microsoft Reader will be discontinued  in August 2012. With the rapid pace of innovation, a program designed for reading on computers and Pocket PC’s as simply left behind

The graphic below from Dan Frommer says it all:

Amazon Kindle Growth Rate

Amazon Kindle Growth Rate

Sep 292011
Kindle Fire

Kindle Fire

Fast Web-browsing on a relatively low-end device – you know there has to be a catch. There’s a roundup of the positive (and not-so-glowing) reviews about the Kindle Fire on The Atlantic Wire, but few note how it will give Amazon the ability to develop an astonishingly extensive record of everything users do online. At ZDNet, Steven Vaughan-Nichols quotes Amazons own description of the Silk browser:

Each time you load a web page, Silk makes a dynamic decision about which of these subsystems will run locally and which will execute remotely. In short, Amazon Silk extends the boundaries of the browser, coupling the capabilities and interactivity of your local device with the massive computing power, memory, and network connectivity of our cloud.

Using Amazon’s immense EC2 backbone to pre-fetch content has major implications for Web-browsing and privacy. Chris Spinoza nails it in terms of user data:

Every page they see, every link they follow, every click they make, every ad they see is going to be intermediated by one of the largest server farms on the planet. People who cringe at the data-mining implications of the Facebook Timeline ought to be just floored by the magnitude of Amazon’s opportunity here. Amazon now has what every storefront lusts for: the knowledge of what other stores your customers are shopping in and what prices they’re being offered there.

And as he points out, this is all done on a version of Android, in effect using Google’s platform to undermine the latter’s own data gathering efforts. Spinoza offers an unsettling vision of the future:

This is the first shot in the new war for replacing the Internet with a privatized merchant data-aggregation network.