If you haven't noticed, creating and executing mobile platform plays is really hard. Just ask HP, RIM, Nokia and Microsoft.
Even Google's Android, which made it look easy to grab dominant market share in the smartphone market, is finding it much harder to secure a footprint in the tablet market, where, let's face it, there's iPad ... and iPad.
UPDATE: Amazon announced the device today, calling it Amazon Kindle Fire, pricing it at $199, and announcing a hybrid client-cloud browser called Silk as part of the composite offering. One core takeaway from assessing Apple's and Amazon's differing approaches to finding a "wedge" in the tablet/media device market is that unlike so many companies, both get market segmentation, and how it works. Namely, that It's NOT about selling attributes (as RIM, Samsung & webOS have discovered); it's about delivering targeted outcomes.
UPDATE 2: Amazon is getting flambeed in the press for what many consider a poorly conceived, poorly executed device. On some level, this is unsurprising, inasmuch as all of the rumors were that the device was delivered by the same ODM that built the RIM PlayBook (using comparable components). All heuristics seemed to suggest that this device was the stopgap to make Christmas, and that the next device will be the real deal. On the one hand, you have Amazon's assertions that the device is breaking records (whatever that means), and analysts modeling sales in the mid single-digit millions. On the other hand, you have some truly bad PR that could damage the Kindle brand, and Amazon's cred in this realm. I think they'll weather the storm, and that this is the messy pragmatism of Bezos at work - ship the idea, fix, iterate. Still, I wouldn't want to be owning the 1.0 Kindle Fire if I couldn't cope with tossing the device when the next one comes out.
John Paczkowski of AllThingsD is reporting that Apple is rumored to be holding its next big media event on Tuesday, October 4, ostensibly to launch iPhone 5.
What's really interesting about this (beyond of course iPhone 5 and Tim Cook's first event as CEO) is that for the past SEVERAL years, Apple has always had their Music Event in the first week of September where they launch new iPods (and of course, iPod touches).
Yet, this year they did not have it, nor even alluded to it. Now, first week of October is rumored launch of iPhone 5.
The question that it prompts is does the foregoing of Music Event signify something larger about iPod strategy going forward? Or is it just a case of the dog of growth (iPhone) outflanking the tail (iPod).
This chart is illuminating, I think. Wal-Mart is so completely instutionalized that the present, past and future seem "priced in." It's obviously a great company, but how can you argue any differently?
Meanwhile, Google is making a ton of money, is completely dominant in search advertising, and has executed their moat strategy very effectively.
Yet, when positioned side-by-side against Amazon and Apple, it too, is far removed from tremendous "upside surprises."
Netting it out: Apple and Amazon still seem to know how to pull rabbits out of their hats, and their stocks reflect it.
It's something to think about in handicapping the next stage of the media tablet market, and the respective ecosystems that will emerge, sustain or get marginalized around same.
UPDATE:Steven Cains (@cains) notes via twitter that it's not really fair to compare $WMT due to dividends (Wal-Mart pays em; Apple, Amazon and Google don't). It's an obviously fair point, but if anything, it seems to affirm the macro narrative that Wal-Mart's got predictability (in all forms) priced in.
Watching the daily Spanish novela play out on the AOL-TechCrunch saga (here, here, and here), it seems that the sheer public nature of this example of Post-M&A indigestion makes it a good poster child for understanding why most M&A fails.
First, a disclaimer that I neither know any of the principles at either TechCrunch or AOL, nor any of the "inside stories" on what is really going on, nor do I really care.
What I do care about is the fact that this process of "pre-M&A hopes" transitioning to "post-M&A hangover" plays out over and over, and over again, and as such, it seems like an incredibly ineffecient, ineffective process; something that I know firsthand, having participated in four different M&A outcomes (Tribe Communications to Zoom Telephonics; Whistle Communications to IBM; Rapid Logic to Wind River (Intel); and Me.com).
So why do most of these deals fail to realize their ambition? Here's my take:
Pre M&A v. Post M&A Disconnects: Acquiring companies spend an inordinate amount of time on pre-deal sourcing, due dilgence and integration plans, YET seemingly burn those plans or fail to hand them to the actual operating team, post M&A. To say that it is common for disconnects to occur post deal close is to miss the larger point of how common it is for the people who negotiated the deal to be DIFFERENT than the folks that you will be working with on a day to day basis.
Pissing off the 3-4 Core Keepers: Everyone knows that in every M&A scenario that while technically a company, line of business, brand and team are being acquired, in truth, the deal's long-term success typically comes down to successfully retaining and engaging the 3-4 core keepers that make the company unique. Thus, it is shocking how often these people are either not locked in to a long term plan, have post-deal incentives out-of-whack with the long-term goals of the deal, or worse, are abused, ignored or insulted to the point that they self-select out of the game. Happens all the time.
Failure to Communicate and Coordinate: You hear the platitudes over and over about how "people" make or break a company (in media, and especially in journalism, that truth is exponentialized). Yet, you see it repeatedly where there is a failure to pick up the phone, hop on a plane, grab a beer and make engaged dialog happen. Smart people forget this one repeatedly, which may be a simple by-product of the unhealthy marriage of conflict-avoidance and passive-aggressiveness that propagates throughout so much of the tech biz.
The Conqueror's Mentality: Pure ego and org chart truth dictate that the acquirers tend to feel like conquerors rather than cultivators and trusted keepers. And while there is a pragmatic truth that to acquire is to conquer, there is an emotional truth that EVERYONE wants to feel like a winner, and when you fail to keep that truth front-and-center, good, smart people with other options will check out. They always do.
There is a classic scene in Steve Martin's, 'The Man with Two Brains,' where Martin's character, Dr. Michael Hfuhruhurr is a bit "backed up," having not consummated his marriage with his new wife, played the then-sultry Kathleen Turner. In the scene, Turner's character, Dolores, is getting Martin all hot and bothered before spontaneously shutting him down by saying, "I can't wait until NEXT Thursday."
Ah, such mental masturbation is the paradox in processing Microsoft's forthcoming Windows 8, the demo videos and written analyses (XLNT by Andy Ihnatko) of which are just starting to proliferate the web.
On the one hand, give Microsoft props. It is an original vision in an industry where everything seems mind-numbingly derivative of the latest, greatest from Apple. The concept of tiles as a UI construct, and a service abstraction layer for creating richly federated composite applications and services is compelling, if not completely new (son of OLE? sib of ActiveX? kin of OpenDoc? cousin of CORBA? neighbor of JavaBeans?).
Plus, it's not like the ascent of the Post-PC Era actually means that people have stopped buying and using personal computers. In fact, Microsoft rightly takes great pride in the fact that their most recent OS, Windows 7, has sold over 400M licenses.
And lest we forget that every platform play is a play for the hearts and minds of developers, and once upon a time, there was no one better at courting developers and making them rich than Microsoft.
Last time I checked, the IPOs of companies built on top of the iOS and Android platforms are non-existent, suggesting that while those platforms are generating a lot of apps and hordes of developer interest, the dollars are still relatively thin, a dilemma and an opportunity that I previously blogged about (SEE: 'The iPhone, the Angry Bird and the Pink Elephant').
But, here's where we splash some cold water on the hopes, promises and dreams coming out of Redmond. Number one, while it was very common for companies a decade ago to start the advance promotional tour on new software and hardware initiatives 6-12 months in advance of actually shipping a solution, the days of "trust me" are (largely) no more.
Why? Remember Microsoft Courier, the prototype tablet that pre-dated the launch of iPad? Uh, it never launched? Oh, well remember how Flash on Android and RIM's PlayBooks was going to be the achilles heel for Apple, which blocked Flash on iOS? How about how Google Buzz was going to kill Twitter, or Facebook, or someone, anyone?
The point is that concepts and prototypes, tightly managed demos and well-laminated videos are NOT products. Executing living, breathing products, given the myriad of technical, tools, distribution channel, legacy, installed base and corporate culture challenges is HARD. Really HARD.
It's why our bar of expectations is so low, despite the fact that the 'ingredients' of technology have gotten amazingly good.
It's why we celebrate the magistry of Instagram, when it's little more than today's version of Sugar Water.
It's why Apple is rightfully the most valuable technology company on the planet, and everyone else is playing horizontal checkers to their game of vertical chess.
Repeat after me. Execution is hard, and Microsoft, culturally-speaking has far more instances of screwing the pooch on new product innovation than actually delivering on new product innovation.
That stated, Windows 8 is actually closer to their core competency, and their heart of hearts than just about anything they've done over the past decade, and as such, if they even just barely credibly execute, they will be relevant again.
The tech biz is relatively stagnant for lack of a serious yang to Apple's yin. Here's hoping that Microsoft can make the game interesting.
Four quick thoughts from reading the tea leaves...
It's IBM Redux...Sort of: I recently finshed reading 'The Design of Design' by Fred Brooks (author of 'The Mythical Man-Month'), where he chronicles the development of IBM's System/360, an effort that Brooks lead at IBM to create a scaleable architecture, OS and tools that would run on a wide-range of hardware platforms to service different verticals and price points. It was a landmark success for IBM, and is conceptually consistent with what Microsoft is trying to accomplish with WIndows 8; namely, one OS that can scale from mobile, tablets and notebooks, to desktops, servers and virtualized datacenters. The difference between then and now is that there are well-entrenched players in the segments that don't look like a PC, and Microsoft has failed constistently to find even a tiny wedge in those segments.
It's the Microsoft Way: The story of Microsoft prior to iPod, iPhone and iPad was of a company that anticipated and orchestrated their way through the "disruption landmine," specifically by offering customers a way to preserve their investment in time, money, programming and attention. The transitions from DOS to Windows, offline to the Internet, and Desktop to the Web were all instances where a less-strategically sound company could have lost their mojo, margins and sway of influence. That all of the struggles since then have come under Steve Ballmer suggests that a Microsoft without Bill Gates is not the same lethal killer. Nonetheless, it does make sense that Microsoft would pursue a vision that is all about making devices homogeneous so as to sustain the hegemony of Windows, whereas the Apple story is all about heterogeneity, invention and embracing disruption. Is Apple right? Is Microsoft right? If you are an enterprise, Microsoft's bread and butter, you probably are pretty excited about Windows 8, having seen how Windows 7 rescued you from Vista. More to the point, the duality of 400M Windows 7 licenses and over 200M iOS devices suggests that, despite our best efforts to reduce everything down to the "one right way," the real world is not so black and white.
Nothing's Free: Here, I hearken back to an axiom that a friend once told me about abstraction layers, where he noted that, "They can solve virtually all problems...except performance." His point, loosely speaking, is that every technical problem is solvable a myriad of ways, but the solution has a cost or trade-offs that can't be completely avoided. Nothing's free. As such, if Windows 8 is going to run on a myriad of devices, screen sizes, input methods and processing capabilities, the system is either going to need to be "fatter" to manage all of that complexity; OR developers are going to have to do a lot of tweaking to optimize from one device target to the next; OR, real world solutions will target a lowest common denominator to achieve the widest reach; OR developers will target a primary environment, and ignore the others. Depending on the answer, you have either a more expensive device, a tax on developers, an LCD-driven market or a bunch of fragmented niches.
Developers are the Straw that Stirs the Drink: A core question remains what does the community of developers (iOS, Android, Windows, Web) do when Windows 8 finally materializes? Is it a non-event that drives developers to simply continue what they are already doing? Does it push a more rapid move to HTML 5 as the 'Switzerland' of all of these platforms? Is there an economic argument that makes one platform more compelling than another for developers? Mark my words. Developers make or break a platform play. Just ask RIM, Nokia and WebOS. Or, Apple and Google, for that matter.
Oh, and one more thing. It sucks to be Adobe Flash. First, kicked off iOS, then touted then irrelevant on Android and RIM, and now designed out of the new Windows 8 browser. "Brownie, you're doing a heck of a job," in the immortal words of George W. Bush.
I had a moment of clarity the other day that I want to share.
Each societal period is marked by varying degrees of inequity, and we happen to be in a whopper of a period of societal inequity (relative to the post-Depression era).
At the end of the day, however, you have to take what life gives you; and either decide to be one of the WINNERS, or submit to gravity.
Now, I was really struggling with this one for some time, because how can you NOT look at the great inequity that is going on, the LACK of productivity that it represents, and the LACK of growth catalysts that is has fomented...and NOT struggle with the world of hurt that is going on?
The answer, for me, comes from a Buddhist construct known as 'Crazy Wisdom,' a conceptual dance on the razor's edge that requires both skillful means to navigate a difficult path, and a cognizant sense of the ridiculousness of the moment, so the insanity around you doesn't make you insane.
The moral of the story is that in such paradoxical times, it takes real deliberation and forethought to recognize that the BEST that you can do is to be aware, so as not to be overcome by it all.
After all, there are no medals given in insane asylums, and no special parking spots in heaven reserved for martyrs. History is written by the winners.
