if connected

Everyone knows the biggest battles in technology are today being fought by a small number of large organizations. We intuitively know who these great powers are: Google, Apple, Facebook, Amazon, and maybe Microsoft. But we’re not so clear on what it is that makes those particular companies the key protagonists rather than other equally large digital companies — Samsung, Sony, Nokia and Yahoo! among them — who appear to be sidelined.

Calling this a battle, or “The Great Tech War of 2012″, misses the point. It’s far too negative a sentiment when these companies’ main focus is on long term strategy. They are aiming to construct a future in which their products and profits will prosper.

These great digital powers are now building Digital Civilizations, rather than a series of mere products, individual platforms or even ecosystems (around a platform). They are pursuing strategies that reach far beyond the confines of existing markets. They are causing widespread market collisions as they push industries to overlap, merge or cease to exist. They are outflanking and disrupting companies that follow less ambitious corporate strategies.

These new Digital Civilizations use identity to tie numerous disparate products, many devices, multiple platforms and product portfolios together into their long term strategy. Each Civilization has hundreds of millions of active users — often with credit cards attached — far more than even the largest telecom operators or media companies. They straddle industries rather than operating within legacy market sectors. They have an organizing ideology underlying their strategy that motivates and attracts talented employees, excites partners, and is the foundation for the marketing that entices users to become their customers.

What defines these Digital Civilizations? What makes them new and different? Many organizations, companies, industry consortiums, and companies have parts of this strategy in place within their current products. But the new Digital Civilizations have all of the following characteristics:  Read the rest of this entry »

[Updated after the Kindle Fire launch event: I've noted what happened in italics. I've not made any other edits.]

Tomorrow Amazon holds a major launch event and will likely unveil its first tablet, according to Techcrunch named the Kindle Fire.

To date, everyone bar Apple has failed with tablet launches. If Amazon mimics Apple then its tablet will fail too. Apple has too many economies of scale, industrial design expertise and supplier relationships for a retail-centric company like Amazon to emulate. Especially, if the Amazon tablet has taken a fast route to market by using the same ODM hardware manufacturer as RIM .

To succeed, Amazon must, and I’m sure will, take a different approach. The success of the Kindle shows Amazon is prepared to think differently from others and to disrupt its own products — in the Kindle’s case to disrupt the cash cow of print book sales — in order to be innovative and seize early advantage in digital markets. If Amazon’s hardware is undifferentiated and virtually the same as RIM’s PlayBook then Amazon has to differentiate elsewhere with content, experience and business models. Otherwise it will suffer the same fate as RIM’s PlayBook.

Amazon cares little about the post-PC world, unlike Apple and Microsoft who are playing that different game. Instead, Amazon is driven by a post disc and post print world where all media will be digital.

Amazon will build a true media tablet. The first true media tablet. The Kindle tablet will focus on the future of all media — TV, movies, music, books, magazines — to enable Amazon to become the dominant digital media retailer. That is Amazon’s ambition.

On that basis, here are the areas to watch for in Amazon’s tablet product launch and what impact each item will have  on the market:

• The extent to which the Kindle tablet’s business model is content-subsidized. Few devices enjoy a lower up front price because of content subsidy. It’s hard to do. Games consoles are the obvious exception but even in that market history is awash with console failures. Nintendo’s 3DS is the most recent struggler. Outside of games almost all devices are priced without a content subsidy. Even Apple sees content revenues as icing rather than a key profit centre that would warrant a lower up front price for iPads or iPhones. Carriers too subsidise iPhones based on communication revenues, not media. Arguably, only Amazon’s own Kindle eReader has extended a content-led device sales model outside of the games market. If Amazon offers its tablet for a very low price, based on expectations of future content sales, then Amazon will successfully disrupt the market and enjoy very significant sales. If the price is tied to hardware costs, then the price will be less aggressive and Amazon’s tablet will compete at a similar price to rivals and consumers will judge it based on the overall product package.
  Update post Fire launch event: Price is just $199 which given the component quality (IPS color screen; dual core processor; same broad hardware as the much more expensive PlayBook etc.) looks to have been set based on expectation of future Amazon content sales.  Read the rest of this entry »