I recently read Robert Scoble’s analysis of the Kindle Fire announcement.  He concluded that two major players would be hurt by this announcement: RIM and Microsoft.  Odd that he didn’t mention BN, which will probably suffer the biggest blow, but whatever.

His analysis of RIM is shallow, but generally accurate.  His analysis of Microsoft though was again shallow, but almost likely completely wrong.  Here’s what Scoble says:

“Why is Microsoft hurting?
Because when you have two great companies like Amazon and Apple going at it, it pulls the consumer attention away from Microsoft. “

I have minor disagreement here.  I actually think this slightly helps Microsoft in that it shows another company can challenge Apple.  I think Apple being solely dominant in the consumer space hurts Microsoft more than a company seriously challenging Apple.  Unless Amazon flops, people will begin to get primed for the fact that other companies can rise to the challenge.  The current belief is that there is Apple and no one else.  Microsoft is not in the discussion today.  This move by Amazon doesn’t remove MS from a discussion they weren’t in to begin with.  If anything it reminds people that Apple does have competition.

“These devices are becoming so capable that Microsoft is going to have a harder and harder time convincing consumers that Microsoft Windows matters anymore.”

This argument makes no sense.  The Amazon device is less capable than the Samsung Galaxy Tab 10.1 and iPad2.  You could make this argument with the iPad2 months ago, but the Amazon Fire doesn’t extend the argument in any way.

“Plus, it totally puts Microsoft in a price war. OEMs now are going to have to decide between the free Android OS or paying Microsoft, what, $40 per copy for Windows? Microsoft is going to have to hand out subsidies and discounts to OEMs, which will hurt its bottom line.

That hurts. I think Steve Ballmer’s days are numbered unless he can figure out how to deal with this new threat from Amazon (and from Google).”

He already has a strategy from what I can tell.  It’s two fold: (1) Sue Android OEMs.  Samsung was added to it today.  The idea to increase the cost of using Android.  Smart, if not ruthless strategy.  (2) Use the Windows 8 App Store to create revenue directly from the customer.  The idea here is that you can sell Windows for half the price to OEMs.  If OEMs were paying $40 before, now they’ll pay $20, but move more goods into the app store.  Want Media Center?  Now you pay $5.99 for it from the app store.  The cost of the device is cheap, end users pay for what they want, and it actually increases MS total revenue as they don’t lose as much money to piracy.

“That said, that cool new UI in Windows 8 sure isn’t looking as cool anymore and we haven’t even seen Apple’s new iPhone and its new three-screen strategy that’s coming over the next few months.”

Huh?  The Kindle Fire UI, while not Android, is very Android skin reminiscent.  Nothing there would make anyone change their opinion of the Win8 UI, for better or worse.

“Another way to look at this is: watch what developers do. Are any of the pro developers (i.e. venture-backed developers) building for Windows 8? No way.”

It doesn’t have a ship date and for VC backed companies a year is an eternity.  Ask this question after CES, and I think you may get a different answer.  I do suspect that companies like EA, Intuit, and Adobe are probably already at work on Win8 though.

It’s odd that with Scoble being ex-Microsoft I’d expect him to know that company well, but he appears to be the least rationale when speaking about his former employer.  Maybe that makes sense.  I don’t know, but he certainly misses the boat on this one.  Boom!


Apple, the victim…

Posted: June 16, 2010 in Apple, Google
Tags: ,

At Daring Fireball today there’s a post about how the world apparently has maligned Apple for defending its turf against Google.  It’s full of some choice quotes like the following:

“What’s goofy is the idea that Google would do this — to aggressively change Android from a BlackBerry/Windows Mobile competitor into an iPhone competitor — and that anyone would expect Apple not to retaliate”

This quote completely misses what people are surprised by.  What people are actually (somewhat) surprised by by is that Apple seems to make business decisions based on things like “revenge” and “retaliation”.  Few people are surprised by iAds.  It makes perfect sense to want to monetize the ad stream in their appstore.   But lets look at what Jobs said earlier this year:

“On Google: We did not enter the search business, Jobs said. They entered the phone business. Make no mistake they want to kill the iPhone. We won’t let them, he says.”

Of course Google entered the phone business.  It makes economic sense for them to enter it.  And of course they’d like to have the most popular phone on the market.  This isn’t just a shot at Apple, as much as Jobs may dream it to be.  But Android is also a shot at RIM, Nokia, Palm, and MS.  The reasons why Google wants to be in the mobile game are obvious.  Almost as obvious as the reason that Apple wants to be in the advertising game.  Jobs seems to think that since they didn’t go after search they shouldn’t be touched.  What kind of logic is that? 

Here’s a question… why didn’t Apple enter the search game?  Jobs would imply the reason to be that they wouldn’t encroach on the territory of Google because of friendship?  Partnerships are important, but if they didn’t go into search and are leaving billions in profits on the table, I think they’ve neglected their fiduciary obligation.

With all that said, I do think that revenge and retaliation are great motivators.  But when you put the fact that you’re doing things out of revenge/retaliation out there, people will pass judgment.  Daring Fireball and Apple (if there’s a difference between the two entities) should be aware of that.