Thursday, August 12, 2010

And here they come ...

but what will they do ?

From Slashdot:
"The iPad is selling as well as it is in part because no large manufacturer has had a direct rival out yet. But boy, is that going to change in the next few months. Over at Technologizer, I rounded up known information on 32 current and future tablet computing devices, from potentially worthy iPad competitors to wannabees to interesting specialty devices. By early 2011 these things are going to be everywhere, and it'll be fascinating to see how they fare."

But what value will they add ?  Who ... (or how) will a mix of content consumption vs content creation be achieved ?  Media / content "libraries" (like iTunes) need to be created, offered to users, and DRM managed.  Otherwise all you have is a laptop without a keyboard attached - and who needs that.


Lastly - here is an observation from a Slashdot member:
"Go back about five years in the archives of most tech publications and you can find similar stories about "The coming onslaught of iPod competitors." Look how that worked out.

For some reason, the tech community believes that the commoditize-and-cannabalize cycle that typified the 1980s and 1990s is a perpetual law. It isn't, and Apple's success this decade is a resounding rejoinder to that view. Apple's products aren't, in all respects, better than the competitors; what they are is more polished, more refined, and an order of magnitude easier to pick up on and figure out on your own.

The typical screeds about how Apple's success is due to marketing prowess, reality distortion fields, media sycophancy, etc. are all a bunch of red herrings. Apple makes great products, and it's a real shame that more companies haven't picked up on how they do it and why. It's not rocket science to diligently refine your products while at the same time planning their long-term placement growth; it's just more involved than most companies want to be.

So sure, I'm sure there will be an onslaught of cheaper, different tablets that mindless consumers (Who, I might add, the tech community still believes to be largely ignorant about technology. You know, in 2010.) will buy up and the iPad will be dead. It's impossible that, say, every single one of the competitor tablets will be inferior in one or more significant ways that fails to make an appreciable dent in the iPad's adoption rate. Equally impossible that Apple would refine the iPad beyond its current iteration to entice new customers.

I mean, really. I'm not giving Apple the keys to the kingdom carte blanche, as heaven knows they've made their share of mistakes, but on the whole, I think they've been too successful, too visionary, and too aggressive to continue this endless narrative about how, just when they're about to succeed, the commodity tech market comes up aces and wins the hand."


In essence he's saying that Apple (Steve Jobs) is visionary - aggressive - and they produce products that just work for techies and non-techies. And its that product polish and innovation that makes the iPad different. And you can't just clone and cost cut that into a winning product. Also, Apple is not run like most tech companies. I cannot picture Dell or HP having the "corporate fortitude" to try and build something like iTunes. Early on it was derided as a joke and a money loser, and while not perfect it has grown into the media beast that feeds Apples new products as they get off the ground. 

Tuesday, August 3, 2010

Pricing of E-Books Draws Increased Antitrust Scrutiny

When State and Federal regulators go to 4 different e-book vendors (iTunes - Amazon - etc) and find no difference in prices .... concerns about competition (or lack of) and special contracts start to rise. Sounds reminiscent to the price fixing issues around music CDs 8 - 10yrs back.

My forecast is tablets and readers (hardware) will drop to $100 - $190 in 12 months. Software and features such as cloud services will be the differentiater between the tablets. And wrangling about e-book formats - standards - copyrights (DRM) will get very messy. But increasing pressure will force competition ...   But its clear that Apple wanted assurances that Publisher ABC would not allow Amazon (etc) to sell an e-book at a lower price than it listed on iTunes.

Wall Street Journal Article

PART OF THE ARTICLE
Just when publishers and sellers of digital books had made peace over how to price electronic titles, the market is attracting antitrust scrutiny. On Tuesday, Connecticut Attorney General Richard Blumenthal disclosed a preliminary review of the pricing agreements between five of the country's largest book publishers and two leading digital retailers: Apple Inc. and Amazon.com Inc.
The probe comes on the heels of a similar examination opened in June by the attorney general of Texas.
Mr. Blumenthal said he has sent letters to Amazon and Apple asking them to "meet with his office" to address his concerns that agreements in place may restrict rivals from offering cheaper e-books. For instance, he said, "both Amazon and Apple have reached agreements with the largest e-book publishers that ensure both will receive the best prices for e-books over any competitors."
Apple, Amazon and five publishers also have agreed to an "agency pricing" model. Under the agency model, publishers set their own retail prices. They receive 70% of the consumer price, with the retailers taking 30%.
"These agreements among publishers, Amazon and Apple appear to have already resulted in uniform prices for many of the most popular e-books—potentially depriving consumers of competitive prices," said Mr. Blumenthal in a prepared statement.
Both the Federal Trade Commission and the Justice Department have been conducting separate inquiries into whether some of Apple's business practices—including its music business and its mobile-device applications—are anticompetitive, according to people familiar with the matter. The Justice Department's antitrust review of Apple also extends to its deals in the book publishing industry, according to a person familiar with the matter. Amazon's deals are also being examined as part of that inquiry, the person said.
The FTC and the Justice Department declined to comment.
The Justice Department has recently shown a keen interest in the emerging e-book sector.
It has filed objections on antitrust grounds to Google Inc.'s proposed settlement with publishers and authors over its plans to develop a global online library.
"My investigation into agreements between e-book publishers and Amazon and Apple has been initiated independent of any other law enforcement agency," Mr. Blumenthal said. "We look forward to cooperating with any other federal or state agency that may be interested in working jointly."

Five of the country's largest publishers earlier this year adopted the agency-pricing model at the request of Apple prior to the April 3 release of its iPad tablet computer, which doubles as an e-book reader.
Apple, CBS Corp.'s Simon & Schuster Inc.; News Corp.'s HarperCollins Publishers Inc.; Lagardere SCA's Hachette Book Group; Pearson PLC's Penguin Group (USA), and Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH, all declined to comment on the Connecticut inquiry.
Amazon didn't respond to requests for comment.
In addition to owning HarperCollins, News Corp. owns The Wall Street Journal.
The agency model has generally resulted in higher prices for e-books, with many new titles priced at $12.99 and $14.99. Further, because the publishers set their own prices, those prices are identical at all websites where the titles are sold. Although Amazon continues to sell many e-books at $9.99 or less, it has opposed the agency model because it argues that lower prices, as exemplified by its promotion of $9.99 best sellers, has been a key factor in the surging e-book market.
In comparison, digital music pricing, which is set by retailers including Apple, is different depending on the site. Lady Gaga's "The Fame Monster" album, for example, goes for $5 on Amazon but is $7.99 on iTunes.
Bertelsmann AG's Random House Inc. was the only major publisher not to adopt the agency pricing model. It continues to sell its digital titles on the wholesale model, where retailers set their own retail prices.
As a result, a number of new Random House e-book titles are being sold at $9.99 by Amazon and such retailers as Barnes & Noble Inc., even though those retailers lose money on each $9.99 sale.