Wednesday, March 30, 2011

Meet The Amazon kPad

Putting all of's recent moves together points to a shrewd and audacious strategy: competing with the Apple ecosystem. I would not be surprised to see the next generation Kindle launched as something of an iPad competitor; let's call it the kPad for now.
Let's look at what Amazon brings to the table to enable the kPad.

  • Designing desirable consumer products, check. Amazon's Kindle e-reader has to be viewed as a home run in this area. Designed by its little known Lab126 subsidiary, it's beautiful to look at, its form follows function perfectly and the user interface is intuitive and powerful. Reviewers sing its praises calling it "ingeniously designed," in The New York Times, "a go-to, standard setting device" on Engadget and "it slays its current competition" in PC World. Although it may fall a bit short of Apple in the area of consumer cachet its estimated sales of eight million units in 2010 is nothing to sneeze at. Although they hold sales numbers close to the vest, the fact that the Kindle is the number one bestseller at Amazon tells you that consumers are still snapping up the Kindle.

  • An App Store, check. The recently rolled out Amazon App Store for Android now offers future kPad and all current Android device owners a place to evaluate and download applications. Amazon introduced a very clever "Test Drive" capability which lets you run selected applications on a device emulator prior to buying and downloading. In addition, Amazon looks like it will competitively price applications and use that as a lever to drive market share, the same as they have done for many other products. Apple has just sued Amazon over the "app store" name, but it's likely that Apple also sees this as a threat to their overall ecosystem.

  • Digital Content, check. Amazon is the leading seller of e-books and one of the leading sellers of music downloads. Amazon also has an enormous selection video for downloading, and recently made 5,000 of those titles free to members of its Prime premium service tier. Furthermore, Amazon owns which gives it over one million hours of audio programming including books, radio shows and periodicals.

  • Software Capabilities, check. Not only has Amazon designed and built the web platform, an impressive feat of software engineering, they have built several apps for smartphones including the hugely popular Kindle app which runs on the iPhone & iPad, Android, Blackberry and the PC and Mac. 

  • Cloud Computing Mastery, check. The March 29th rollout of the Cloud Drive service to securely store music, photos and documents on Amazon's servers was a wake-up call to Apple and Google who have yet to roll out their own on-line music locker. Music purchased through Amazon, as well as user uploaded content, can now be streamed to any device... something that makes the current iTunes system look even more dated. The Cloud Drive is just the tip of the iceberg as Amazon's Web Services unit is one of the leaders in providing the full array of cloud based solutions to customers, ranging from small start-ups to enterprise scale operations.

Clearly Amazon has the capabilities to roll out a tablet and a compelling ecosystem, but does it have the intent to do so? Jeff Bezos, Amazon's founder and CEO, has repeatedly said that the Kindle is in different product category than the iPad and it doesn't directly compete with it. That is most certainly true, and in fact, many consumers have found the Kindle and iPad to be complementary products. Bezos is an executive not afraid of taking chances and at 47 years old he is still looking to build his company and create his legacy.

One clue to development of a kPad is at Lab126 where they have postings for 200 jobs. Some of the jobs like the "Design Initiative Manager" posted on March 14th are intriguing since the role clearly looks like it extends beyond the Kindle franchise: Drive concept investigation projects within the Product Design team; Collaborate with across engineering to establish design architectures, materials requirements and validation criteria to meet new enclosure design objectives; Initiate and support delivery of custom interconnect and key component development to realize new product designs; Develop analytical modeling and validation to stretch boundaries of new product design constraints, enhance new product development quality and speed device development. The role of other posted jobs like the Product Manager position offer additional insight: Combine tactical roadmaps and requirements into a compelling product and evangelize that vision within the organization.
The kPad, as I call it, is entirely consistent with Amazon's culture which was distilled to four points by Bezos in a presentation to staff after being acquired:  1) Obsess over customers; 2) Invent; 3) Think long term and 4) It's always day 1.  

My bet is not only do we see a kPad in the future, but that it brings new ground-breaking capabilities. The Kindle maintains its role as an e-reader while the kPad opens the door for Amazon to compete in the all important tablet market where all the computer hardware growth is expected to occur

Monday, March 28, 2011

Immigration's Impact on Newspaper Readership

There's yet more evidence piling up the U.S. newspaper industry will face headwinds in their attempt to maintain readership levels. With the most recent release of census information comes this interesting nugget: The percentage of foreign born residents in the U.S. is approaching the historic high last seen at the end of the 19th century through the beginning of the 20th century.
The connection to the newspaper industry is simple: immigrants have tended to look for newspapers written for their immigrant group to keep a connection to their homeland as well as provide information in their mother tongue. I believe much of the growing population of new Americans is likely to read targeted publications rather than the traditional papers which have long been in decline. Do you agree?

Thursday, March 24, 2011

Alternative Energy vs. Energy Efficiency: Not What You Might Think

Currently the U.S. is the worlds largest user of energy. A variety of energy sources are used, but currently alternative sources meet only a small portion of the total demand.

Looking at the flow of energy from its sources to its uses provides an interesting perspective. Transportation and electrical production consume a significant portion of inputs, however, there is significant waste. What is labeled as "Rejected Energy" in the picture below is waste in the form of electrical generating and distribution losses, waste heat and other inefficiencies. While less glamorous than building out new renewable sources, reducing systemic energy waste may ultimately yield larger benefits.

As the global economy grows the focus on alternatives and efficiency improvements need to shift towards the burgeoning economies of China and India, which together already consume more energy than the U.S

Wednesday, March 23, 2011

The New York Times Paywall Conundrum

Paywalls are often cited by newspaper management teams as the mechanism to save their sinking industry. The New York Times recently announced a paywall of their own as a way to capitalize on the significant online readership of the Grey Lady. Well they have certainly garnered lots of attention for the move, but much has been about their ineptitude in execution. 

What exactly has gone wrong for the New York Times? It seems there are issues with the overall strategy, the technology implementation, the gaping holes in the wall, the pricing and the incredible complexity of their solution. The issues surrounding this have been well documented in many quarters:
  • The Huffington Post examines the situation and identifies why the New York Times did not opt for a total paywall, which has largely proven to be a failure where it has been implemented.
  • Barry Leiba over at Staring At Empty Pages refers to the implementation as a complicated mess and states that The Times will no longer be his go-to destination for news.
  • Destined to backfire is Gigaom's assessment citing what they believe will be changes in reader behavior to cope with the paywall.
  • But the stakes are small according to Gawker's article which postulates that only a small segment of the current readership will even bump up against the paywall limits that still permit limited unfettered access as well as reading articles clicked through some referring links.
  • Felix Salmon writing on Wired says the paywall is "weird." He looks at the perverse pricing schemes that result in a situation where it "creates the slightly odd proposition that if you want to use the NYT’s iPad app, you’re marginally better off subscribing to the print newspaper on Sundays and throwing it away unread than you are just subscribing to the app on its own."
  • An article over at BoingBoing also cites the inscrutable pricing and a host of other issues and comes to the conclusion that the paywall is either "wishful thinking or just crazy."
  • Digital Tonto has some astute observations that are definitely worth reading about the paywall including its unintended effect of devaluing quality journalism.
  • With all the loopholes available to those who wish to continue consuming the Times without feeding the paywall it's not surprising that a byzantine set of rules of engagement has emerged. Search Engine Land does a good job explaining how this works. In addition, some folks have approached this as a game and attempted to use Twitter as a publicly available loophole to the paywall.  Not surprisingly, the Times has asked for this door to be closed
Many are looking to exploit the loopholes
 in the New York Times paywall

Wednesday, March 16, 2011

Textbooks of the Future Minus the Book

An interesting study by Xplana, a "social learning platform", predicts the demise of the paper based textbook in higher education. Over the next five years their projections have digital textbooks constituting nearly half of the textbook market.
Among the factors cited are the phenomenal popularity of the iPad, booming e-reader sales (with 35 million Kindles alone expected to be in circulation by 2012), the popularity of textbook rentals and emerging standards for electronic textbook publishing. The study makes for fascinating reading and I recommend you take a look at the full report.

Monday, March 14, 2011

The Newspaper Industry Is On The Ropes

There has been a modest recovery in the health of the US media business as measured by change in revenue from 2009 to 2010 according to the Pew 2011 State of the Media Study. Notably, the newspaper industry is not sharing in this reversal of fortune.

As I wrote almost one year ago, newspapers are on their way to becoming irrelevant. The newest revenue trends underscore the seriousness of the decline, with newspapers declining by 6.4% while all other channels showed improvement.
At the core of this decline is the rapid adoption of the web as the preferred delivery channel to obtain news and information. Last year, for the first time, more people reported getting their news from the web rather than newspapers.  Concurrently the gap between the web and television, the leading source of news, is closing.
The newspapers face a complicated set of challenges. Along with the commoditization of news as it becomes widely available on the web from old media sources and burgeoning social media options, classified advertising is in long term decline.

Long one of the most profitable segments of the newspaper, classified advertising faces headwinds from the slower economy, but the larger problem is competition from new channels.  Everything from Craigslist to to Monster have become the preferred ways to conduct traditional classified ad commerce such as selling a car or house or finding a job.  Only paid obituaries and legal notices have remained steady.
It remains to be seen if the newspaper industry will find success with replacing the revenue streams lost over the past several years with paywalls and new subscription delivery platforms like The Daily, but for the industry to have any hope of surviving in some recognizable form they need to find answers fast.

Monday, March 7, 2011

The Cloud Visualized

Cloud computing is highly complex and the meaning of the concept itself is open to interpretation. The folks at Wikibon have produced an excellent infographic which illustrates the cloud computing landscape, its multiple layers and the role played many of the key players such as IBM, Cisco, HP, Google, Microsoft, Amazon and Verizon. There's a lot more to cloud computing, but this chart makes a great jumping off point.

Cloud Computing Landscape
Via: Cloud Computing Landscape