apple v amazon business today


And has any of these firms even considered launching cloud-based content services like Apple has with iCloud? It is tempting to think that the


omnipotence stems from the application of a charismatic leader employing in his products a sublime combination of cutting-edge sleek technology allied to a robust application of leading marketing techniques to drive a very simple and wonderfully effective sales operation. Things that the competition can't offer. Well maybe not - until now. In Amazon's Jeff Bezos, Apple is at last, or for once, going to have to face off with a business leader - NB: not product - who totally gets it when it comes to giving people in a market what they want. And who can match the company for having deep strategic thought. Such thought seems to have


spotted what could be Apple's Achilles heel: video. Even as it was sweeping all before it, it can't be denied that video has been a troublesome arena for Apple despite the huge amount of film and TV content that iTunes offers. The battle between Adobe and


Apple may seem to the vast amount of end users as something that is totally irrelevant but to the industry it was a big sign saying 'my way or the highway' for Apple despite the manifest advantages in the online video industry of supporting the industry's standard. Then there's the iTunes business


model. It's really all about discreet one-off purchases of content. Fine for


video on demand applications for films but it's not how people buy TV shows. For TV, the vast majority of people subscribe to services, whether that is cable, satellite or IPTV pay-TV offerings - or even, in the UK, the BBC Licence Fee. And this is where the newly


launched Kindle Fire comes in. In its composition it contains all of the right technology in a very sleek form factor, especially the graphics. But the fascinating thing is not the what, it's the why. Why is it a good 2-inches smaller than the iPad? Why does it cost half the price and, even better from a business perspective, a price that is said to be $10 less than the bill of materials cost. Who in their right mind would do that? A smart company looking for an edge, that's who. To its core Amazon is a phenomenal


business. Its business model is this: whatever you want at the best price in a manner that makes it as simple if not simpler than iTunes to buy and buy content as well. Yet Amazon isn't offering a pale imitation of iTunes, it's offering access to over 100,000 films and TV shows from Amazon Instant Video, including thousands of new releases and TV shows, available to stream or download, purchase or rent. Kindle Fire also comes with one free month of Amazon Prime Members - an unlimited, commercial-free streaming service comprising over 11,000 movies and TV shows at no additional cost. This is something that iTunes cannot offer - at present anyway - and makes the overall


Amazon isn't offering a pale imitation of iTunes, it's offering access to over 100,000 films and TV shows from Amazon Instant Video, including thousands of new releases and TV shows, available to stream or download, purchase or rent.


proposition a real TV service running on a device whose form factor - not just price - takes it away from face to face competition with the iPad. But why with its grip on the market


should Apple worry? For this one reason: the huge significance of video in the tablet market. “Tablets, in particular, have become a primary video device, both inside and outside the home,” said Keith Nissen, research director of analyst In-Stat in August 2011. “By 2015, our research projects that 65% of the US population will own a smartphone and/or tablet. As these devices become a centre-point for video engagement and consumption, content providers, device manufacturers, and operators need to support a multi-screen usage model that reflects social interaction, screen interaction, personalisation, and mobility.” At the end of the day, unlike the


other competitors, Apple now has to contend with someone with a very compelling product that works in a market segment, the 7-inch device arena, that it doesn't own, offering access to more - better is a subjective word - TV and film content than it does and all at less than half the price. Moreover a company helmed by an inspirational leader with a supreme business head, one that decided to launch Kindle Fire six weeks before Christmas. Smart, very smart. The kind of business smart that Apple hasn't to date gone ‘mano a mano’ with for a very long time, if at all. And TV and video is the battle ground. It's going to be fascinating to watch.


www.ibeweb.com l november/december 2011 l ibe l 7


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