Paul Wallbank – Brilliant Communications

Tag: apple

  • Can Yahoo! disrupt the disruptors?

    Can Yahoo! disrupt the disruptors?

    Yahoo! CEO Marissa Mayer packed out the room for her interview at the World Economic Forum this week where she spoke about some of the challenges her and the company face.

    One of the areas she sees for Yahoo! is in collaborating with other tech industry giants.

    Mayer also is making a point of collaborating with companies such as Apple Inc., Google and Facebook, instead of competing.

    “It ultimately means there’s really an opportunity for strong partnerships,” she said.

    The problem for Yahoo! is that it doesn’t have a lot to offer companies like Apple, Google or Facebook – they are steaming along on their own and have moved ahead of the areas which Yahoo! dominated a decade ago.

    Generally in the tech industry partnerships are more the result of the sector’s also-ran coming together in the hope that their combined might will overcome the leader’s advantages.

    It’s the same philosophy that thinks tying the third and fourth placed runners legs together will make them faster than the winner.

    A good example of this is Microsoft’s tie up with Nokia over the Windows Phone. If anything, the net effect has put Windows Phone and Nokia even further behind Apple and Google in the handset market.

    Even when two tech companies have united to exploit their individual strengths, the results usually end in tears. Probably the best example of this was the IBM and Microsoft joint venture to develop the OS/2 operating system which eventually sank under IBM’s bureaucrat incompetence and Microsoft’s disingenuous management.

    Those two examples show how partnerships only work when each party has something valuable to contribute and all sides are committed to the venture.

    Marissa Mayer’s task is to find Yahoo!’s strengths and build on them, then she’ll be in a position to enter partnerships on an equal basis.

    Whether its worth entering into partnerships with the big players though is another question. It may well be that Yahoo! has more to offer smaller businesses and disruptive startups.

    Entering into a desperate alliance with Apple or Facebook could possibly be the worst thing Yahoo! could do, the company is no longer a leader and now needs to be a challenger or a disruptor.

    Facebook’s locking competitors out of data feeds is an example of how complacent the big four internet giants are becoming, Yahoo! are in the position to upset that comfortable club.

    The value of partnerships is that we all have weaknesses and strengths, a properly thought out venture builds on the various parties’ strengths and covers their weak spots. Right now Yahoo! has more weaknesses than strengths.

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  • Proudly designed in Gyeonggi

    Proudly designed in Gyeonggi

    “Designed by Apple in California ” is the boast on the box of every new iPad or Macbook. That the slogan says ‘designed’ rather than ‘made’ says everything about how manufacturing has fled the United States.

    Last year the New York Times looked at Apple’s overseas manufacturing operations, pointing out that even if Apple wanted to make their product in the the US many of the necessary skills and infrastructure have been lost.

    Now the US is facing the problem that Asian countries are looking at moving up the intellectual property food chain and doing their own designs.

    In some ways this is expected as it’s exactly what Japan did with both the consumer electronics and car industries during the 1960s and 70s.

    The big difference is that Japanese manufacturers travelled to the US and Europe to study the design and manufacturing methods of the world’s leading companies. In the 1990s and 2000s, the world’s leading companies gave their future competitors the skills through outsourcing and offshoring.

    In the next decade we’ll see the latest consumer products coming with labels reading “Designed by Lenovo in Fujian” or “Developed by Samsung in Gyeonggi”.

    For western countries, the question is what do we want to be proudly be putting our names to?

    Image from Kristajo via SXC.HU

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  • Samsung’s place in the market

    Samsung’s place in the market

    Samsung’s announcement of a 7 billion dollar quarterly profit yesterday tops off a big 2012 for the Korean electronic manufacturer in which they became the world’s biggest mobile phone manufacturer after overtaking Nokia’s sales.

    Android phones have been the great success for Samsung as other providers, including Google, have been comparatively slow to offer devices which give telcos the opportunity to claw back some margins they’ve been giving away to Apple over the last few year.

    Despite these successes Samsung have a number of challenges ahead in 2013.

    The biggest challenge is channel conflict with Google and Motorola working on launching an X-Phone which they hope will compete against both the iPhone and Samsung products

    Channel conflict was always going to be a problem for handset manufacturers using the Android operating system when Google bought Motorola Mobility and now we’re seeing the effects of this.

    The Koreans aren’t taking Google’s threat lying down having joined with Japanese manufacturers in a joint venture to develop a Linux based operating system for smartphones and Samsung expects to release Tizen equipped phones later in 2013.

    Just on its own, the conflict with Google would be a problem for Samsung but the ongoing fights with Apple over tablet and smartphone patents continues to be a management distraction as well.

    Apple’s relationship with the Korean conglomerate is a classic case of co-dependency as Samsung supply the bulk of the processors used in the iPad and iPhone. While Apple may want to kill the Samsung Galaxy tablet range, they have to be careful about going too far with a key supplier.

    On the Asymco blog wonders if Apple’s announcement to bring some manufacturing back to the US may be part of a strategy to deal with the company’s dependence upon Samsung.

    With threats from ‘frenemies’ like Apple and Google one of best defenses Samsung has is the companies varied range of products along with its willingness to strike out on its own into customers’ markets.

    At the Computer Electronics Show in Las Vegas, Samsung showed off its range of OLED TVs, laptops and other equipment alongside smartphones. That breadth of product frees the company from being locked into one or two markets.

    Of course the best example of such an electronics conglomerate in the past was Japan’s Sony which is now truly lost and wandering in the business wilderness.

    Whether Samsung can avoid Sony’s mistakes will be worth watching over the next few years, for Apple and Google it may determine who is the biggest competitor in the 2020s.

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  • Pennies for Apps – how Apple and Google dominate online income

    Pennies for Apps – how Apple and Google dominate online income

    “App Store tops 40 billion downloads” trumpets Apple in a media release curiously timed to coincide with the opening of the Consumer Electronics Show.

    While impressive, those figures aren’t great for developers. As writer Ed Bott points out they are getting 17.5 cents per download.

    Making things worse, that return is trending downwards. Tech site Giga Om put the return at 20 cents a year earlier.

    Giga Om also points out App Store returns are skewed towards the big successful game apps, meaning the majority of app developers are scratching for pennies.

    This phenomenon is also happening with online advertising as Google Adsense partners find their income dwindling for pay for click adverts.

    On top of declining revenues, there’s the cut that Google and Apple take. In the App Store, Apple’s take is 30% while Google pocket over 50% of Adsense revenue.

    Working for pennies has become the norm for for creators like musicians, writers and app developers in the digital economy. The long tail is fine, but it barely pays the bills for all but a few outliers. Everyone else needs a day job.

    In some respects this isn’t new – writers, poets, musicians and painters have generally starved in their garrets throughout history – but the Twentieth Century model of intellectual property, record labels and broadcast empires offered at least a decent living to many.

    Right now the 21st Century model seems to be that creators can go back to starving, while the big four online conglomerates make the profits previously shared around by the movie studios, record labels and book publishers.

    Maybe though the rivers of gold which are making Apple and Google’s managers rich may turn out to be just as vulnerable as those of the newspapers they’ve displaced.

    It may well be that the current dominance of the App Store and Adsense are a transition effect as we move to other business models. It’s difficult to see right now, but we can’t rule it out.

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  • Customer lock in as a business asset

    Customer lock in as a business asset

    US booksellers Barnes and Noble has been struggling for years and things aren’t getting better reports the New York Times.

    An important part of the New York Times story is the quote from a Forrester industry analyst,

    “The problem is not whether or not the Nook is good,” said James L. McQuivey, a media analyst for Forrester Research. “What matters is whether you are locked into a Kindle library or an iTunes library or a Nook library. In the end, who holds the content that you value?”

    Locking in customers lies at the heart of the Kindle and iTunes business model. Once users have a substantial investment in their book or music collections on one platform it’s unlikely they will go elsewhere as the costs, and risks, of moving are too great.

    This doesn’t always end well for the customer and it gives online businesses great power which they often misuse.

    Every online business tries to lock their customers into their ecosystem – Google, Amazon, Facebook and Apple are the most successful but every single social media and cloud service tries to make it hard for users take their business elsewhere.

    In some respects this is no different to the phone company or bank which have historically tried to lock customers into their services, but the online social media, cloud computing and e-commerce platforms make a much more ambitious grab for their users’ data and assets like music and book collections.

    The New York Times article illustrates just how critical that user lock in is to the success of online businesses. The question for us as consumers is how much we want to be locked inside the web’s walled gardens.

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