We examine Facebooks acquisition of Whatsapp: What’s being acquired? Resources, processes or values? We also begin a look at The Capitalists Dilemma.
Barcelona, Spain – Today at Mobile World Congress, Nokia unveiled five new affordable handsets including a new family of smartphones debuting on the Nokia X software platform. Based on the Android Open Source Project AOSP, and backed by Nokias deep ties with operators, the Nokia X platform gives AndroidTM developers the chance to tap into, and profit from, a rapidly expanding part of the market.
It’s worth remembering the distinction between operating systems, platforms and ecosystems.
Today’s announcement is consistent with the declaration of Nokia is engaged in a “war of ecosystems.” Note that this is in contrast to “a war of platforms” or a “battle of operating systems” or a “competition of devices.”
Devices are commoditizing, operating systems are commodities and the Android platform is a commodity. Value will not be captured in any of these technology modules. Ecosystems are another matter. It’s where Facebook (and its acquisitions) reside. It’s where Google lives and it’s where iTunes has been for a decade.
Nokia’s adoption of AOSP as an operating system is consistent with the ecosystem strategy set forth three years ago, and is also consistent with Microsoft’s competitive strategy.
Which is why I believe Microsoft is not only comfortable with this development but had agreed to it over a year ago when work on this initiative was already well under way.
The orthodox vs. the unorthodox: Tata, Tesla and Toyota. Why might an asymmetric competitor lose and a symmetric competitor win?
We begin with Tesla and Apple. We continue with aluminum vehicles and re-visit information asymmetry as Horace exploits it to buy a Mercedes on eBay.
We talk about car APIs (Aux input jack and ODBII) and much, much more.
A brief discussion considers the perils of endless line extension up and down the market, perhaps fueled by financialization.
This is a good one.
Designing emails that look beautiful, render perfectly and drive strong response is increasingly difficult. That’s why Campaign Monitor compiled the top 100 emails of 2013 into a free eBook, alongside tips on design and content. The Top 100 Email Marketing Campaigns eBook features brands like Fitbit, SmugMug, Panic and includes:
- Highly performing newsletters with open rates of more than 50%.
- Examples of great layouts & responsive designs.
- Emails that go against best practices and still drive top results.
- Campaigns that saw open rates improve by 20% after A/B testing, and more.
Check out the free eBook at campaignmonitor.com/top100.
Campaign Monitor makes software that lets you create and send beautiful emails. Today more than 800,000 designers, agencies, and amazing companies across the globe rely on Campaign Monitor to manage their email marketing.
One of the axioms of hardware business is that prices fall over time. The consumer price index for personal computers and peripheral equipment from 1998 to 2014 is shown below:
The price index suggests that prices for computers should be 54% of 2007 levels. Charles Arthur illustrated this on a global basis using a separate set of data.
The data shows that the weighted average selling price (ASP) of a PC has fallen from $614.60 in the first quarter of 2010 to just $544.30 in the third quarter of 2013, the most recent date for which data is available.
The purpose of Airshow is to:
- Understand how data can be used to persuade through an appeal to logic as well as through empathy.
- Understand the basics of “data cinematicism” including the techniques analogous to cinematography and direction.
- Understand story development techniques including how to facilitate the audience’s entry into the story.
- Learn how to build a cinematic presentation.
The method we devised borrows heavily from the techniques of cinematography and screenwriting to impart meaning to the audience beyond the literal words spoken or images shown on screen. These techniques are demonstrated with “feature presentations” and then deconstructed in interactive lectures. Throughout we also weave Aristotelian rhetorical tips and present from the Asymco repertoire of stories.
Prior to Apple’s earnings report I read at least one article suggesting that the most important indicator to watch was Apple’s margin. I suppose this was due to a recent decline in margins from a peak gross margin of 47.4% in Q1 2012 to 36.7%.
As the graph below shows, margins began to recover by Q3 2013 and are nearly on par with year-ago levels.
The guidance for the present quarter is a gross margin between 37% and 38%. This would imply a flat q/q GM line (blue line above.)
This is not quite catastrophic.
To better understand margins, it helps to compare them with other companies. When Apple reached that peak of near 50% gross margin I noted that such a level was higher than Microsoft’s and Google’s. The irony being that Apple was nominally an (implied) low-margin hardware company while Microsoft was an (implied) high-margin software company and Google was an (implied) high-margin internet services company.
Here is the picture with the last two years added:
Horace Dediu and Guy English discuss the future of TV, how we consume media, and the fate of console-style devices. From Apple to Nintendo and beyond, is there one box to rule them all, or can there be?
Interview segment: Cinematographer Barry Braverman talks about working with director Wes Anderson (uncut version to be posted as Screen Time #54)
- Apple TV Gains its Own Shopping Category | AppleInsider
- Horace wrote one of my favorite Asymco articles in 2011 that applies here: Hiding in Plain Sight
- AirPlay Configuration Files Hint at Next-Gen Apple TV Hardware |AppleInsider
- Mobile Gamers Aren’t Playing NIntendo-Style Games | ConsulGamer
- Barry Braverman’s website, and his IMDb credits.
- Bicycle Thieves, aka The Bicycle Thief aka Ladri di bicciclette | Wikipedia
- Bottle Rocket (and Murita Cycles) | The Criterion Collection
- Umberto D (click through for restored trailer) | The Criterion Collection
Horace and Moisés discuss the excitement surrounding Microsoft’s hire of new CEO/poet Satya Nadella, Apple’s recent numbers announcement, and yet more on Google (and their sale of Motorola to Lenovo).
The increase in net sales of iTunes, Software and Services in the first quarter of 2014 compared to the first quarter of 2013 was due to growth in net sales from the iTunes Store, AppleCare and licensing. The iTunes Store generated a total of $2.4 billion in net sales during the first quarter of 2014 versus $2.1 billion during the first quarter of 2013. Growth in the iTunes Store, which includes the App Store, the Mac App Store and the iBooks Store, was driven by increases in revenue from App sales reflecting continued growth in the installed base of iOS devices and the expansion in the number of third-party iOS Apps available. Net sales of digital content, including music, movies, TV shows and books, from the iTunes Store was relatively flat in the first quarter of 2014 compared to the first quarter of 2013.
Apple Inc. Form 10-Q.
During the last quarter Apple changed the pricing for iWork and OS X to zero.
I estimate the net effect to have been a reduction in revenues from those software titles of about $350 million for the quarter. Nevertheless, increases in services and app revenues means that the iTunes total reported revenues increased to a new record.
The total with estimated contributions by media and service components is shown below right.
Note that revenues do not reflect total billings. As Apple reports only the 30% of App transaction values, the full iTunes/Software/Services transaction values are shown in the above graph on the left.Notes:
- OS X server is still priced at $20 and iWork for previously unlicensed devices and computers is still priced above $0 [↩]