Tuesday, May 01, 2012

Businessweek Pieces on Apple (iPad) & Amazon (publishing and delivery of writing)

There's been a few pieces that stood out from Businessweek lately on the success of both Apple and Amazon.

The Mar 26 edition had a tremendously interesting "Opening Remarks" essay by Peter Burrows and Jim Aley. Titled "iPad: The PC Killer" it covers Apple's dominance with the iPad and Burrows and Aley offered up some ideas that seem to make a lot of sense... with the first two being around why the iPad has done so well and third around business conditions it created. In terms of product success, the authors note both how Apple able to take a longer view approach to a market given fewer product offerings and that the iPad helped by being a follow-on product to the iPhone (a positive both in terms of consumer familiarity with the concept and Apple utilization of the iOS software and App Store).

Most interesting to me from the piece was the idea put forth by Burrows and Aley that the iPad so dominates the market that competitors can't expect to simply offer up a comparible alternative (like HP did with the TouchPad) and expect it to sell. If a product offering in the same pricing or performance ballpark as the iPad, customers will simply pick what they already know to be good. There is still success that can be had by other companies, but it either through breakthrough competing technology (which nobody has brought yet) or slicing off a piece of the market and going after that. This approach of "competing by not really competing" has been successfully done by Amazon with positioning its Kindle (and now Kindle Fire) at price points where consumers don't need to choose between them or the iPad.

Related to this idea of Amazon doing well, there was an interesting piece by Brad Stone on the Businessweek site. "Why the Amazon Naysayers Should Be Scared" looks at the recent excellent financial results from the retailer, with improving margins while at the same time making large investments in infrastructure (facilities and people). Pretty interesting stuff from Stone that also makes reference to Amazon focusing efforts on publishing and the Kindle with Amazon CEO Jeff Bezos recently saying that "16 of our top 100 bestselling titles are exclusive to our store.”

It's pretty remarkable what Amazon has done in the area of publishing and an additional Businessweek story hammers this home with "Amazon vs. Publishers: The Book Battle Continues." Also by Brad Stone, the piece is primarily about Amazon wanting to move towards print-on-demand publishing (with one usage being their CreateSpace division that I used for my book) and the traditional publishing houses fighting them. I wrote about and linked to another Brad Stone story on Amazon from a few months ago and it really seems as if Amazon has a more profitable path forward than traditional powers in the publishing industry and these existing companies fighting an uphill battle to keep things as they have been.

Fascinating things going on in this industry and it takes me back to a blog post done here three years ago on a Time Magazine feature about the economics of written delivery.