→ Amazon is doing its real job: Squeezing retail chains

by Michael in


Amazon is doing its real job: Squeezing retail chains

Dan Frommer points out any possible battle between the Kindle Fire and iPad is small potatoes in the short term compared to the retail business.

Recall that e-commerce is still less than 5% of U.S. retail sales. So driving brick-and-mortar competitors into the ground and directing more spending toward Amazon is absolutely what Amazon should be putting most of its effort into.

After referencing a few well-known retail chains and their dimishing forecasts, here's the gold nugget:

Meanwhile, Wall Street expects Amazon to report 40% year-over-year sales growth for last quarter, and a profit.

I’d love to see some contrarian evidence — signs that offline chain spending is picking up in categories where Amazon is a serious competitor. Or that any of these companies stand a chance to survive as digital-only companies. (Hey, at least Walmart just bought an iPhone app agency.)

But from my own habits, I can’t imagine why that would happen.


→ HBO stops providing discs to Netflix

by Michael in ,


HBO stops providing discs to Netflix

The Verge's Nilay Patel:

The move is said to be "largely symbolic," as Netflix still owns whichever discs it purchased previously and can still legally purchase future HBO discs from other parties and rent them to customers under the copyright doctrine of first sale. (Indeed, Netflix says it will continue to offer HBO DVDs and Blu-rays, although it's never had any HBO content on its streaming service.)

Netflix will now be in direct competition with HBO when it starts airing its self-published shows. This kind of thing reminds me how bad it is for the consumer when content providers and delivery channels are the same entity.

This reminds me of EA and Valve having a spat over EA's games in the Steam store only after EA opened its own Origin store. It's interesting that my gut is to give Valve a pass on their integration but having a bad feeling about Netflix producing their own content. Maybe it's because Steam has already become the defacto PC store and is free to access (you only pay for the games you want to have on it, not a monthly fee), while anyone wanting to watch Netflix produced "television" who doesn't already have an account will have to sign up for a paid service they don't already have.

That might not be it, though. I'll have to ponder.


→ The "Highest Quality" Google Tablet

by Michael in


The "Highest Quality" Google Tablet

MG Siegler at his parislemon blog on the DigiTimes report of an upcoming Google tablet:

I have no doubt that Google is working on some kind of “Nexus” tablet — they have to be. To say Android’s entrance into the tablet space has been a flop is a vast understatement. Google needs to get on top of this situation. And fast — Amazon, not Google, is leading now leading the “Android” tablet race.

Yes, certainly. Amazon has coopted Android and made a Kindle platform with an Amazon marketplace using zero services from Google, and therefore getting zero money to Google. Not good for the big G.

If Google is going to undercut the $199 price, the hardware is either going to be shit — or Google is going to have to take a significant loss on each one sold. Maybe they do that and say they’ll make it back in search advertising. But there is real money they’re going to have to pay to an OEM to get them to agree to that.

If you consider Eric Schmidt’s quote from last month: ”In the next six months we plan to market a tablet of the highest quality.” — only the latter option makes sense here. There is no way Google releases a tablet of the “highest quality” and sells it for under $199 without taking a loss.

At $199, selling for a loss, the Kindle Fire is already not very good as far as tablet software and hardware go. Its strength is the Amazon ecosystem becoming available conveniently at such a low entry price. It'll be interesting to see what Google ends up really putting out.


→ The E-Reader, as we know it, isn't so doomed

by Michael in


The E-Reader, as we know it, isn't so doomed

Marco Arment on yesterday's post from The Loop:

Is it really clear and inevitable that e-ink is going to become colorful and video-capable? I’d argue that most of e-ink’s appeal today will still appeal to a lot of people five years from now, and probably even longer.

Newsprint can’t do much compared to color glossy magazine printing, but it has never gone away. Why must black-and-white e-ink readers inevitably be replaced by multimedia color tablets?

Newsprint is printed daily. Those marginal cost increases are massive when accumulated. The cost increase of a cheaper tablet over an E-Reader is likely to be far more stomachable to the masses as a single up front increase in purchase price for a device that they perceive can do everything a dedicated e-ink reader can do and more.

But e-ink readers have far lower hardware and power needs, so e-readers should maintain their advantages over tablets for quite some time: the best e-reader on the market today costs $79, weighs less than a third as much as an iPad 2, and has a battery that lasts a month. That’s a huge gap that won’t be filled with incremental hardware improvements.

It's certainly a huge gap, but once you pass a certain point is it one that matters to most people? If you can get to the point where people users only have to remember to charge their device overnight every few days, battery life is unlimited in practice. Whether an e-reader has a battery life of 1 month or 2 doesn't make any real difference to the majority of the gadget buying public. My guess is that the point of making a difference in practical usability would probably be somewhere around 2 to 3 days of not having to think about the battery.

Plus, the ideal size of an e-reader is probably going to remain smaller than the ideal size of a tablet. And there are other big advantages to reading on a basic e-ink reader, such as the lack of a bunch of apps and multimedia features to distract you from reading.

I don’t think the e-reader is “doomed” at all. It may just be relegated to a fringe device for reading nerds, but that’s what it’s been for most of its lifespan as a category and it’s been fine.

I'm certainly not arguing that tablets will be as good at reading as tablets. As I pointed out previously, I simply think they're going to die anyway.

Isn't being relegated to a fringe device essentially the same thing as being doomed? CRT monitors technically do provide specific advantages the masses would benefit from in some cases, but they're not enough to justify the purchase to most--and therefore not enough to justify production by most producers. There are still people who use CRT displays, however, because in their niche the advantages of responsiveness (and color accuracy? is that still a thing?) are important enough to base an entire purchase decision on.

The biggest players in the e-reader space are Amazon and Barnes & Noble. If they can make more money by churning out tablets in higher volume and don't need the distraction of making e-ink devices any more, will they bother? Sure, neither of them actually makes the devices themselves to make money--the point is to get consumers buying their digital content. Even if you don't care about the money made on the devices themselves, then, it's easy to note that the tablets enable purchasing of a wider swath of media for B&N and Amazon to make money on.

If Amazon and Barnes & Noble drop e-ink, the tech is effectively dead. The question becomes whether they'll think it's worth it to keep the lines of e-ink devices going solely for the people who want to have a device that just reads books well, rather than giving the companies the opportunity to sell rich media.

While I certainly hope they'd decide it is, I highly suspect it won't be.


→ Fanboy Theory

by Michael in


Fanboy Theory

Marco Arment:

If you publicly express an opinion that any particular platform is best for a significant portion of buyers, you’re effectively saying that the people who chose differently were wrong. Most people don’t like to be wrong.

And because it’s such a massive and divided market, any stated opinion will cause this reaction from a lot of people. If, for example, you say Android is best for any common set of goals, a lot of people might get upset:

Not seeing this implication requires more open-mindedness, empathy, and attentive reading ability than many people have. So no matter how much you wrap it in qualifiers or try to be constructive, a lot of people are going to be insulted if you say something good about the thing they didn’t choose — and it’ll be even worse if you say something negative about the thing they did choose.

Spot on. Thinking something is better doesn't make you a fanboy. If you can articulate well the points on which your opinion is based and can acknowledge what positive points other products have, you can still reasonably come to the conclusion that other products are inferior as a whole.