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Summary:

In the wake of Amazon’s Kindle Fire announcement today, Unicorn Labs’ co-founder Mark Sigal offers his analysis of Amazon’s strategy and how it compares with other platform players, particularly Apple and Google.

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“Here endeth the lesson.” —Jim Malone, “The Untouchables”

There is a great moment in the movie “The Untouchables,” when street-smart cop Jim Malone (played by Sean Connery) explains to federal agent Elliot Ness (played by Kevin Costner) the laws of the urban jungle that was 1920s Chicago, culminating his sermon by saying, “Here endeth the lesson.”

In his own way, Amazon CEO Jeff Bezos delivered a similar message today about the laws of the post-PC jungle when he unveiled the next generation of all things Kindle. In doing so, he accomplished two things.

One, he firmly anchored the precept that other than Apple, Amazon is the elephant in the room when it comes to tablet and media devices, aka the post-PC universe.

After all, there is no company out there (other than Apple) that can so seamlessly combine ecommerce, digital media, publishing, cloud computing and hardware know-how — and do so at wafer-thin margins.

It begs the question: If you are Google, once you get beyond the disciples, how do you compete in this domain? If you are Samsung, and have no software story, then what IS your story now? HP, Microsoft, Dell, Asus, et al, time to calibrate what game you are in — because if we know one thing about Amazon, it’s that they play the long game. What’s your long game?

Moreover, if it wasn’t clear before, it should be clear now — the game is no longer about technical specifications or hardware-only stories. It’s about the rise of integrated hardware-software platforms (see my previous post “HP, Dell and the paradox of the disrupted”) and a relentless focus on the customer through continual refinement of said platforms.

This is the Apple model, and Amazon today not only chimed in with their support of that approach, but effectively doubled-down.

That gets to the second thing Bezos accomplished today. With surgical precision, he communicated the truth that a brand is a promise about values and how those values manifest in a company’s products.

Specifically, Bezos began the event by talking about how customers are smart. They didn’t buy the many Android tablets that proliferated over the last year because they “want mere gadgets.” Rather, they want services that get better over time.

By talking about Kindle Fire as a service first, and then focusing on the “so what” aspects of the hardware and software (which he did plenty), Bezos’ message was that Amazon’s core business is “service.” And it has oriented itself to make money only when customers actually use its services versus merely buying their devices. They’re not interested in a one-time transaction.

This concept was firmly rooted by Bezos when he asserted the Amazon doctrine, “Above all else, align with customers. Win when they win. Win only when they win.”

So there you have it. If, as Apple CEO Tim Cook said, Apple’s mission is “to maniacally focus on making the world’s best products … that’s why we breathe, that’s why we live,” Amazon’s is all about services that create a win for customers.

And this is what I love about Amazon. Whereas Google’s credo seems tilted towards emulating the best practices of others so as to relegate them to a commodity, Amazon really seems to want to learn from the best, and then integrate those lessons into what they do well. No simple copying and pasting of good ideas for them, ala Samsung.

To me, this raises two questions. One, if Amazon, Apple and Google are simply the best of the best in the post-PC universe, and Amazon and Apple are guided by deep integration and clear focal points, at what point does Google capitulate and go all-in with a similar strategy? After all, the writing is on the wall with Nexus 7, but every time Andy Rubin touts his “Android’s winning” numbers, I am not sure if the company is clear itself.

Two, with the 8.9” Kindle Fire HD priced at $299 and the Kindle Fire HD with 4G LTE wireless at $499, Amazon is seriously testing Apple’s assertion that it would not leave pricing overhang for the competition to outflank them, as happened during the PC era. So, will Apple blink?

Either way, it’s game on.

Mark Sigal is an eight-time entrepreneur, whose ventures have sold to Apple, IBM and Intel. He is chief product officer at Unicorn Labs, an eBooks and eLearning platform provider.

Image courtesy of Flickr user matthewvenn.

  1. Tablets- Well, tablets are a luxury PC accessory that rich people casually prop up while lounging around in their leather couches.

    In the PC-Plus real world, 80 million or so PC’s are getting out there per quarter. 1.3 million Android phones are activated per day. For most people, the PC and phone combination works well.

    Tablets are too cumbersome to hold, not mobile at all- pretty useless for most people.

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    1. Totally agree.

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  2. This article could easily have been written to convey the same message, minus so much Apple fellation worship.

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    1. Number of times Amazon is mentioned in this article: 12

      Number of times Apple is mentioned in this article: 9

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    2. What, did you just learn a new sex word in fifth grade and now you want to show everybody you’re a big little boy?

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  3. @Dan, tablets are a luxury pc accessory? You must be watching a different trend than I am. What I see is a device category pick of more and more “jobs” that used to require a PC. That’s not to say the PC is doomed in all places, but the trend lines seem clear.

    @A S, Apple is the post-pc benchmark. It’s a testament to how well Amazon has executed that they belong in the same conversation. Bezos did a Steve Jobs number today. It’s like talking basketball and opting not to mention Lakers or Celtics. Why?

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    1. > Bezos did a Steve Jobs number today.

      How exactly did he do this? Just because someone introduces great products and services doesn’t mean they are doing a Steve Jobs. It’s not as if Steve Jobs has a patent (*snicker*) on introducing great products and services. People have been introducing great products and services before Steve Jobs and they will continue to do after Steve Jobs.

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      1. It’s about coherent narrative, and a clear view of how the various piece-parts fit together, and where sibling products derive and become unique.

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  4. Unbalanced article.. Kindle is still naïve in terms of productivity.. Today’s announcement adds some weird features that won’t be of value addition to older versions. Talking about hardware upgrade, the current specs are not overwhelming but the previous gen Kindle was lacking it.Talking about integration, yes, Apple achieving it but Microsoft seems to be jumping way ahead with it’s Win8 release. Talking about margin, we’ll see as Walmart is going online big way that will further restrict Amazon’s profit’s margin.
    I have Kindle which is good for book reading, for anything else, I’ll prefer tablet from Win8 on Intel as that’s a powerhouse of productivity (except that it few grams heavier than ipads or Android versions)

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  5. Umm actually Apple is about both. Can you add anything thoughtful or do you just regurgitate anything any CEO blurts to promote his product.

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  6. Can’t believe that tablets have become a “casual prop up” (agree!) Remember when monitors were a huge deal? http://en.community.dell.com/dell-blogs/direct2dell/b/direct2dell/archive/2012/08/29/evolution-of-monitors-teletype-to-led.aspx?dgc=SM&cid=80208&lid=4446496&utm_source=buffer&buffer_share=a04cc It would be interesting to see where we net out on this topic in 100 years but I’m beginning to think that we could have a revolutionary conversation every couple of years now :-)

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  7. Apple is about both. Strange the author misses the obvious.

    Amazon has the right idea though… For those that want cheaper ad run devices, they should cream android devices.

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  8. Amazon previously demonstrated that they’re as smart a retailer as there ever was, and now Amazon has made a serious move into Apple’s market. It’s definitely game on.

    I’m convinced that in this new tech environment, the companies that focus on the customer will win and the companies that focus on themselves (i.e. “How can we maximize our profit?”) will be second tier, at best.

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  9. Yet another Tech player into Tablet manufacturing.

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  10. Vinay Deshpande Friday, September 7, 2012

    One fails to understand how exactly Amazon is *so* different from Samsung. Yes, Amazon made a copy of Android and started modding it whereas Samsung keeps updated with the latest versions that Google doles out. But see carefully and you’ll find Sammy steering their Android based products on their own – ex., multitasking.

    Anyway, the point is if you stay out of the (second rate) reality distortion field of Amazon, you will see a me-too tablet vendor, small enough not to get sued by Apple but smart enough to find a way to sell (unique) content. Amazon is a great book company and a tablet/reader is a very cool idea that they are pushing. Now is that earth shattering or a smart biz evolution ?

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    1. @Vinay, you are pointing to a low-level system function like multi-tasking as a software differentiator? That, generally speaking, is why hardware guys fail to grok software. Software differentiation generally manifests in things that the consumer can see-touch-feel. Color me dubious that Samsung will develop world-class, consumer grade software competency, but frankly, I hope they do. As a consumer and as a mobile developer, I don’t want a one or two horse race. I want diversity.

      Now, as to not seeing much difference between Amazon and Samsung, on a hardware level you are probably right. Samsung is probably as good, if not better. And hardware clearly matters. But, again, the consumer is focused less on tech and specs, and more on outcomes. To them, it’s seamless integration of deep media and app libraries; it’s the knowledge that they don’t have to worry about viruses, it’s the fact that the consumer already has a trusted billing relationship and buying history with Amazon — something that no one other than Apple has. Plus, Amazon controls their own marketing and distribution channel, something that no one but Apple has.

      Everyone else is in the same ballpark, probably using similar ingredients, but not serving up the same recipe for success. In a tweener, non mission-critical category like media + tablet devices, these distinctions are critical.

      A final point is that until these devices actually ship, one has to base such analysis on the history of the vendor, the coherency and consistency of the message and whether it’s in line with their core competencies and “unfair advantages.” Case in point, I knew Kindle Fire 1.0 would be a disappointment, and blogged on it here (http://radar.oreilly.com/2011/09/amazon-kindle-table-prime-ipad.html). But, I also knew that what Amazon had built with the original Kindle ebook family, and given their “surround” they were extremely well positioned to succeed in this arena. Hence, I am bullish for their prospects with Kindle Fire HD.

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  11. Nicholas Paredes Friday, September 7, 2012

    Um, Apple and others are simply following in the footsteps of DoCoMo. Services are all that matters in mobile.

    Apple makes great devices with a number of essential services for consumers. They distribute additional service creation to developers of apps. Apps are nothing but servies if designed correctly. Apps will adapt to the needs and desires of the customers in the future.

    Amazon makes a number of very useful and well designed devices. These tend to be centered around a similar range of apps. The reach of apps is shorter on the kindle range, but that will change. My impression is that they are moving slowly, and building the intelligence necessary to make a solid move into the mobile space.

    Services, as I just wrote a few minutes ago is what mobile is all about. The device is a deception. Those who design devices will fail to see the massive base of the mobile opportunities below the surface.

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  12. Both Amazon’s and Apple’s business models have strengths and vulnerabilities. Both hold strong hands in this post pc era as you outlined for Amazon.
    Amazons proposition wins where tablets are of little use beyond entertainment devices (but only in the USA & UK), a bit of web surfing & email (maybe). Apple’s proposition is stronger where the device is useful beyond simply consuming media and buying from Amazon (eg American Airlines bulk buying iPads for pilots/crew saving millions $ in fuel costs), students/schools, sales installations, business people, etc. Apple’s revenue is close to 2/3 non USA/UK so this is no slam dunk for Amazon but it’s hard to see the value proposition for Android tablets at the moment.

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    1. @eric, all good points. agreed.

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