February 16, 2010

38) Apple – iPad

危 wēi  danger

Apple has built a strong reputation for launching products and services that help consumers meet their existing needs more effectively, for example storing and listening to music on the go.  Its strength has been in building ecosystems of products, services and retail offers to optimize the consumer’s experience.  Strong reputations lead to high expectations, commentators therefore view Apple’s product launches ultra-critically.  Many industry commentators have been vocal in their disappointment with the iPad because it doesn’t clearly meet any existing consumer needs – has Apple lost its judgment?

机 jī opportunity

I don’t think so.  Perhaps Apple has realized that it can’t predict and therefore drive all consumer behaviour changes.  After all, when it launched the iphone it hadn’t planned the app store as it stands today, instead its skill was in reacting to the ‘hackers’ it saw developing applications by quickly offering them a forum and tools to exercise their creativity.  The result has been the iphone is now used in ways Apple could never have dreamt of – a spirit level, a safety alarm and a credit card reader to name just a few.  Given that, perhaps Apple has learnt that its greatest competitive advantage is in harnessing the creativity of its user-base and offering them the tools to develop the Apple offers of the future – effectively crowdsourcing new opportunities.  Viewed through this lens the iPad looks like a blank canvas to me, a wonderful opportunity for Apple’s hacker community to seed new behaviours and grow new markets.  With its lightweight design, large screen, fast processing speeds and ability to run iphone app’s, perhaps the iPad is an essential component to the hacker’s toolkit.  The iPad as the new cookery book solution?  The iPad as the magazine of tomorrow?  The iPad as an interactive photo-frame?  Probably none of the above, but fortunately for Apple they have kept their options open…

How About…

  • Building modularity and flexibility into your products and services to enable consumer creativity?
  • Harnessing that creativity to help drive your future offers?

—

January 21, 2010

31) Amazon Web Services

amazon web services logo

危 wēi  danger

Founded in 1994 by Jeff Bezos as a result of his ‘regret minimisation framework’ – an effort to fend off regret for not staking a claim in the Internet gold rush – Amazon has grown to be America’s largest online retailer, with nearly three times the internet sales of its runner up, Staples, Inc. Amazon’s growth has been fueled by continuous innovation of both its retail offer (including moving from books into broader categories and opening up its platform to third-party vendors) and its core technology. Its investment in the latter, mounting to billions of dollars, led it to begin exploring web services in order to help it manage peaks in demand on its website in 2002.  Amazon saw the value in this approach, adopted it internally and continued to build its competence in the area – eventually launching Amazon Web Services in 2006 with a data-storage service, called S3.  However, at the time there was significant concern from industry commentators that the launch was a strategic mistake with key resources, both time and money, likely to be diverted from the retail side of the business.

机 jī opportunity

However, the move made complete sense to Amazon, which above all else viewed itself as a technology company. It continued to develop its web services offer and has since added additional web based services, including online database, content delivery, and secure payment services – each of these services was born from investment in Amazon.com. The company has also been creative in how it has taken its new services to market, for example in December 2009 it launched a spot market to sell off excess capacity on its EC2 platform which allows enterprises, developers and hosting companies to bid for and buy capacity at prices set by demand and availability.  Although web services represented less than 3% of Amazon’s total revenue as of 2008, the bandwidth (number of bits per unit time) consumed by its Web services division has surpassed the demand from its better known retail websites as of 2007. The offer has helped continuous development of the Amazon platform and has given the company a foothold in some significant emergent markets.

How About…

  • Appraising your internal capabilities for those that might seed completely new offers?
  • Using auction-based pricing in order to price exactly at customers’ willingness to pay?

–

December 21, 2009

24) Google

google_maps_logo

危 wēi  danger

Google realized early that location-based services were of real value – the ‘maps’ tab seems to have been on its search page forever.  However, in order to offer complete mapping services Google was dependent on licensing key data from two duopolists that ruled the mapping business – Tele Atlas and NavTeq.  The two companies priced their licenses under strict terms, safe in the knowledge that the barrier to building a database of turn-by-turn directions was huge.  The companies’ positions were apparently so strong that their customers, Tom-Tom and Nokia, bought them for $2.7bn and $8.1bn respectively.

机 jī opportunity

But, the barrier to entry wasn’t too high for Google to surmount.  After spending years with thousands of cars on the road building its own database the company terminated its license with Tele Atlas earlier this year.  And then Google announced on October 29th that it would offer free navigation with its Android Operating System (OS) – Tele Atlas and NavTeq’s share prices each dropped c20% on the same day.  Google’s business model doesn’t depend on electronic product sales – it depends on advertising revenue.  If widely adopted, its mapping API will create a platform for a global geo-based advertising network.  In fact, Google is so keen for its OS and API to be adopted that it even offers an ad-split to the product and service companies that build with them. ‘Free’ pricing is widely touted as a great way to speed adoption, well Google are effectively offering ‘Less than Free’ (they’re paying).

how about…

  • Questioning barriers to entry that are perceived to be insurmountable?
  • Asking if changes in technology are likely to lower them?
  • Offering products or services for ‘free’ or even ‘less than free’ to speed adoption?

–

« Older Entries
Newer Entries »