Mobile Fix – Another week. Another walled garden.
Simon Andrews, founder of the full service mobile agency addictive!, on Facebook, Amazon and Apple…
Following F8 last week, where Facebook described a future where you never need to leave Facebook, this week Amazon described a future where you don’t really ever need to leave them.
With four new products, the Kindle range is pretty audacious – and very keenly priced. What the Kindles do isn’t quite what the iPad does, but they do a lot for the money.
As we have discussed over the last 18 months, each of the GAFA* giants is trying to build a vertical ‘stack’ where they control every aspect. Apple have been in the vanguard, launching great hardware and then developing an ecology (and the software) that enables them to capture the value of the content consumed using that hardware. So selling music, books, movies, games and apps becomes a very profitable way of enticing people to buy new hardware that lets them use the content they have bought.
Of course all these eyeballs inside an Apple ecology worries Google, as they are the dominant monetiser of eyeballs through search. And new research on the success of Facebook in terms of time spent online has to concern Google too. So they have started to build their vertical stack – they key difference being that they started with the software (Android) before recognising they needed to be involved in the hardware too – buying Motorola.
When we first started including Amazon in the GAFA, many people questioned it. But we should remember that Amazon have built a big business outside of ecommerce, with Amazon Web Services powering a huge proportion of web businesses. And don’t forget things like crowd sourcing pioneer Mechanical Turk, measurement company Alexa; or their search engine A9. They closed the standalone search engine in early 2010 and concentrate on search for commerce players. We wonder who is going power search on the Fire?
As the dominant player in selling content, they have most to lose as other people enter the market. So whilst Amazon has a huge advantage in physical content (CDs, DVDs etc) iTunes hurts them with MP3s etc.
So yesterday Amazon went a step further in building their vertical stack. They have built on the huge success of the Kindle with new products. The Fire looks like a great way to listen to music, watch movies and yes, read books. And with their own Silk browser they are also positioning this as a great way to browse the web too. So at around half the price, this does what most people use the iPad for. Game on.
One reason for the low pricing is that Amazon expects to make money from content sales to subside the devices – and (this wasn’t made very clear) these devices will also include Special Offers – unless you pay another $40. Just as Amazon launched an ad subsidised version of the Kindle a while back, they will us this model to get great headline prices. This probably explains why the UK price looks so expensive – that media play hasn’t reached the UK yet.
This is probably the key weakness of the Amazon launch – much of the sizzle depends on Amazon services like their cloud drive and streaming movies which so far are US only.
Apples turn next week
Confirming all the rumours, Apple have announced an event for next Tuesday. The key question is whether this is just about the iPhone5 or whether we’ll see some new products.
On the iPhone 5 we think a big focus is going to be around voice control – with a feature rumoured to be called Assistant. Since Apple bought Siri last year there has been talk that Apple want to develop the iPhone into more of an assistant and voice control seems central to this. Announcements around the work Apple have been doing with Nuance were expected at the launch of Ios5 but didn’t happen.
We also expect that NFC will be supported in some way, making sure Apple get to play in Mobile Money, rather than letting Google et al take a lead. Given that research suggests Apple have an 89% retention rate, whatever they announce will have queues out of the door.
Our other bit of speculation is that we see the iPod rejuvenated. We’ve mentioned stories of Apple buying nine inch screens before and we wonder whether Apple couldn’t take some of the wind out of Amazon’s sails with a iPod Touch tablet that is designed for consuming media. Using the tech from the first iPad with this smaller screen would give Apple something at a lower price point and leave the iPad as the premium product.
The other thing we suspect might happen is a bit more love for iAds. No-one at Apple will have been very surprised by the Amazon launch – given the deep relationships Apple have with all the component manufacturers they will have had a good idea of what Amazon was doing. But the pricing may have given Apple cause to think – and we wonder if all their dealings with content companies will have reminded them just how good advertising can be at subsidising products and services. If Apple could rethink their ad proposition and scale it, they could use that revenue to reduce the cost of hardware.
That’s what Eric Schmidt has been saying for years.
Like us, you will have read many articles looking at the new features from Facebook. You might even have seen Don Draper presenting it.
The one thing that everyone seems to have missed is the mobile element. Every time a feature was shown Zuck stressed this was going to be available on all platforms. And if you watch the videos the mobile experience is going to look a lot more like the desktop one than it does now.
There are over seven million apps and websites integrated with Facebook – and all these potentially are now going to be delivered on mobile. Except all of them that use Flash that is. We mentioned Project Spartan, the rumoured Facebook mobile platform using HTML5 last week and we expect that HTML5 is the way forward.
We await some word from Facebook on what is going to happen with mobile and apps, but we’re convinced this is huge news as brands can use the same technology to develop their presence on Facebook and mobile – as well as desktop web. TechCrunch think that Monday is the day Project Spartan gets launched so we’ll know a lot more then.
Finally
One of the biggest events in the mobile calender is talking place next week in London. The MMA Forum has an excellent set of speakers – including experts from China, Japan, Africa and Indonesia sharing a truly global view of mobile. We’re part of a panel on day one, looking at one of our passions – Permission Marketing. This is a great chance to supercharge your mobile understanding. It’s just £200 for brands – and we could probably sort a deal for Mobile Fix readers. Let us know if you’d like to come and we’ll see what we can do.
*GAFA – how we describe Google, Apple, Facebook, Apple – the people who boss this market – like the Gaffa in cockney slang. Eric Schmidt calls them the Gang of Four. We suspect he doesn’t know that much cockney slang.
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