GigaOM » post-PC era

If Apple is all about the devices, Amazon is all about the services

Mark Sigal, Unicorn Labs — Thu, 06 Sep 2012 23:52:11 +0000

“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.

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The end of the PC era

Erica Ogg — Thu, 18 Aug 2011 21:00:20 +0000

For nearly 30 years, personal computers as we have known them have been the drivers of the technology engine. From Intel to Microsoft to Dell to HP to Micron Technology — many fortunes were made on the back of the PC. But the rise of mobile computing is upending the technology business and is simultaneously redefining what is a personal computer and how we use it.

On Thursday Hewlett-Packard, one of the oldest companies in Silicon Valley with deep connections to the PC ecosystem (they paid $25 billion for Compaq in 2002) and the world’s largest seller of PCs, confirmed it is looking to sell off its personal computing business. It’s also getting out of the hardware game altogether, ditching its tablet and smartphone operations too. But if HP does eventually find a buyer for its PC division, it will only be catching up with IBM, which in 2004 decided that the low-margin PC business wasn’t worth pursuing.

HP is not the only company that is finding itself on the wrong side of PC history. Earlier this week Dell reported its earnings and acknowledged that its bread-and-butter PC business isn’t what it used to be.

But it’s not just those two. Annual growth rates for the PC industry as a whole have been shrinking in recent years, with small single-digit rates of growth. It can’t be inspiring for the manufacturers looking at their balance sheets.

Those companies looking to innovate won’t find much interesting about building PCs anymore either. Laptops will get faster processors, and marginally thinner. HP and Dell, along with the other top PC companies by volume (Acer, Lenovo and Toshiba) build essentially the same computer, with the same software, chips, and hardware. The only thing to scrap over is minor design flourishes and who can price theirs the cheapest–not exactly an inspiring business if you’re interested in being a part of mainstream personal computing advances. Or, for that matter, growth that will boost your stock and keep investors happy.

Meanwhile, the rise of alternatives to traditional PCs, tablets, continues its march on. UBS recently upgraded its already-optimistic tablet forecast for this year, to 60 million tablets from 55 million, and next year, to 90 million units from 80 million. And it’s not just shipments. People are buying them.

We’re not looking at a complete takeover of PCs by tablets. There will still be several hundred million PCs sold worldwide for several years because people will still need PCs for certain tasks. But it’s very clear that many of the habits we associate with personal computers can be carried out with a decent-sized touchscreen and a good internet connection. And better yet, done anywhere, and quickly.

Before all of these signs became unavoidably obvious, the other original PC company was the only one that saw the end of this era coming and actually did something about it: Apple.

Over a year ago, Apple CEO Steve Jobs started heralding the end of the dominance of the PC, dubbing it the post-PC era. He compared PCs to special-use vehicles in June 2010:

“When we were an agrarian nation, all cars were trucks because that’s what you needed on the farms.” Cars became more popular as cities rose, and things like power steering and automatic transmission became popular.

“PCs are going to be like trucks,” Jobs said. “They are still going to be around.” However, he said, only “one out of x people will need them.”

Not coincidentally, this foretelling of “the post-PC era” occurred after the introduction of the original iPad. Jobs saw the device as the future of personal computing, while critics and skeptics saw it as little more than “a big-screen iPod touch.”

Nineteen months later, we see what the iPad has wrought: the iPad is a blockbuster hit (Apple’s sold 9 million this year, and 15 million all of last year), and has sent PC makers much larger than itself scrambling to come up with a response. Meawhile, PC profits remain low, and even the world’s leader in sales is disinterested in continuing the slog.

So while the era of the primacy of personal computers in their traditional form is fading, they are not disappearing entirely. They’re just taking on a different form.

Thumbnail courtesy of Flickr user Kıvanç Niş. HP laptop image courtesty of by treehead.

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