As Ryan tweeted, this really is “condensed years of blog posts and project experiences into a 30-minute talk.”
Mr. Ben Thompson at his best. The article is so good. Important piece to my business theory puzzle.
You’ve read that software is eating the world, but this goes deeper.
I suspect that nearly every industry will belatedly discover it has a critical function that can be digitized and commodified, precipitating this shift. The profound changes caused by the Internet are only just beginning; aggregation theory is the means.
“Fasten your seatbelts”, 15 minutes of business insight.
The New Yorker got unprecedented access to Apple’s Jony Ive and we got a small-book-sized article that gives us a glimpse into their design process. Well worth a read.
Another one by Ben Thompson about how Microsoft is seemingly becoming in terms with the new reality:
The cloud, though, changes that. Once you remove the burden of support and maintenance – that’s handled by the service provider – it suddenly doesn’t necessarily make sense to buy from only one vendor simply because they are integrated. There is more freedom to evaluate a particular product on different characteristics, like, say, how easy it is to use, or how well it supports mobile. And it’s here that Microsoft products, particularly the hated SharePoint, were found to be lacking.
Great commentary by Ben Thompson on the Apple Watch introduction:
The Apple Watch section began with the iconic “One more thing…” at 55:44,1 and these were the extent of Tim Cook’s words before we got our first glimpse of the Apple Watch:
We love to make great products that really enrich people’s lives. We love to integrate hardware, software, and services seamlessly. We love to make technology more personal and allow our users to do things that they could have never imagined. We’ve been working incredibly hard for a long time on an entirely new product. And we believe this product will redefine what people expect from its category. I am so excited and I am so proud to share it with you this morning. It is the next chapter in Apple’s story. And here it is.
Then came the introductory video, and we never got an explanation of why the Apple Watch existed, or what need it is supposed to fill. What is the market? Why does Apple believe it can succeed there? What makes the Apple Watch unique?
For even more Ben’s insight listen to this episode of his podcast.
Ben Thompson says it:
Utimately, though, Samsung’s fundamental problem is that they have no software-based differentiation, which means in the long run all they can do is compete on price. Perhaps they should ask HP or Dell how that goes.
In fact, it turns out that smartphones really are just like PCs: it’s the hardware maker with its own operating system that is dominating profits, while everyone else eats themselves alive to the benefit of their software master.
Ben Thompson writing for stratēchery:
Think about commerce in the same time periods and contexts I recounted above: in the time of addresses and telephones, most commerce involved driving to the store. It was a purposeful and burdensome activity, rather like a scheduled phone call. In the era of the web, ecommerce became a word, but it still entailed going to a computer, a journey that seems simple, but in reality is often far removed from the motivation to buy, which may arise from an ad seen on TV, or a dress in a windows, or the recommendation of a friend. With mobile though, and particularly with messaging, the omnipresence of both a communications channel as well as a purchasing channel means the separation between the thought of buying and actually making a purchase is very small indeed.
Josh Bersin about knowledge workers:
A “Power Law” distribution is also known as a “long tail.” It indicates that people are not “normally distributed.” In this statistical model there are a small number of people who are “hyper high performers,” a a broad swath of people who are “good performers” and a smaller number of people who are “low performers.” It essentially accounts for a much wider variation in performance among the sample.
Marco Arment writing:
They did everything that the press, analysts, and prevailing wisdom at the time were telling them to do. Everyone was pressuring them to be more like Apple, so they tried.
The problem isn’t that they botched it (although they did, in some ways). The problem is that Microsoft isn’t Apple, and Microsoft’s customers aren’t Apple’s customers. They tried selling a more Apple-like attitude to their customers, most of whom don’t want and won’t tolerate an Apple-like attitude. That’s why they’re not Apple customers.
Michael Mace writing for his MobileOpportunity blog:
I believe Google’s mission statement to “organize the world’s information” is no longer a meaningful guide to its actions. To me, the company looks less and less like a unified product company and more and more like a post-modern conglomerate.
The idea behind the “Internet of Things” is that network connectivity is moving into almost everything. If that’s Google’s investment thesis, it could rationalize an investment in almost any industry. Appliances? Absolutely. Shipping and logistics? You bet.
Ben Thompson excellent again. The price of undifferentiated software converges to zero and therefore three main business models he sees are:
- Software free + hardware where you make profit margins
- Software free + advertising
- Software as a Service for businesses where the competitive environment will provide ever better products that the businesses have no problems to pay for.
My contention is that app time will impact many of these incumbent media and that both the effect and the consequences will be hard to measure in advance or even ex post facto. These new media objects are not measured easily and therefore are flying under the radar of traditional metrics used by the industry. Such absence of reliable measurement is one of the hallmarks of a disruptive shift in industry: You can’t perceive what you can’t measure and you certainly can’t manage it.
I believe the logic for Apple is that usage of the products determines their value and therefore placing powerful software in the hands of more users means they will value the entire system more. This leads to the notion of greater “stickiness” or “lock-in” but also to higher satisfaction and loyalty, rate of upgrades and even more third party purchases and yet more usage.
This is the virtuous cycle platform custodians seek to engender. This is what Apple is trying to build and the transition of apps into the system bundle is part of this re-enforcement.
One wonders how long before Apple’s approach becomes the norm for other platforms.
Thomas R. Eisenmann answering the question what is entrepreneurship:
[…] entrepreneurship is the pursuit of opportunity beyond resources controlled.
The article goes much deeper, of course.
Horace Dediu thinking about the Apple’s M7 chip:
Perhaps this is why Apple chose to describe the iPhone 5s as “forward-thinking”. The M7 and the Touch ID are like research projects whose actual value will be realized at some future time, in probably different contexts. The M series of chips may become Apple’s “low end” microprocessor as the A series climbs the trajectory into core computing tasks (read: phone, tablets, TV, laptops).
M might be the chip for the wearable segment, woven into a whole new fabric of uses and jobs to be done.