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[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 »

This video is a reminder that Apple is not the only company with a controversial business model and practices. Here’s the Onion’s absolutely wonderful take on Google’s ecosystem. It’s not new but this is a must watch for anyone interested in smartphones.

Apple focuses on delivering the best customer experience but with tight central control, while Google offers much for free — Chrome browser, Android, Gmail, search, Picasa, docs — in return for supporting an advertising-based business model.

New Google Phone Service Whispers Targeted Ads Directly Into Users’ Ears

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Today we heard about the latest additions to Apple’s product empire. Today, we saw the latest extensions of the ecosystem that Nokia CEO Stephen Elop referred to in his eloquent burning platform memo:-

“Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”

He was right that this is more than a fight between individual products like mobile handsets.

“The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.”

But ecosystem is far too weak a word. It implies that all a company like Apple, Microsoft or Google must do is to find a fertile field with favourable weather and let their product seeds grow. If that were enough, Google would not be struggling to foster more than a handful of Android tablet apps, and Apple wouldn’t be sitting on over 90,000 iPad-optimised apps. The difference in app quantity and quality would be much narrower.

Today at WWDC we see how the Apple ecosystem is run. It has a leader, a philosophy, a business model, a model of customer identity. All of these things are critical for success. Switching back to the fertile field metaphor: Apple adds a lot more to the ecosystem than simply choosing suitable environmental conditions for software and hardware to prosper. And, those extra ingredients are why Elop is wrong, or at least not sufficiently visionary in his memo. This is a far greater clash than one between ecosystems. More later when the fuss over WWDC has died down a little.

Earlier today Gmail stopped working, for most people, for about four hours.

It’s not the end of everything, as numerous things I’ve read today argue. It doesn’t blow apart ‘cloud computing’ or putting faith in other companies or other people. Computers break. Parts of the Internet fail. Even phones seem less reliable now. There’s nothing new here. Anyone that relies upon just one digital service, or device, will enjoy painful cold turkey sometime soon.

But what is different now, is how many ways we all have to do something. If our main phone goes down, we reach for our mobile. If twitter dies, then it’s back to Facebook, email, IM or the best option yet: Friendfeed. If one email address stops working, most people reach for another: The main pain with email failing is that incoming messages sent to the broken account can’t be read until that system — Gmail here — comes back up.

I use Gmail as a fallback to my work email because it is so versatile, Gmail has many alternative ways of access: I had few problems during the outage earlier as I access Gmail via IMAP on my PC, and on my iPhone, as well as using the web browser interface. So, I could read stored messages fine. Unlike Hotmail and Yahoo! mail, Google makes access to Gmail easy from regular Internet-standard PC/Mac/handheld/phone email software, complete with full folder management.

But, to take advantage people need to set up their phone or PC email software, and ideally in advance before panic has hit.

Thinking about the so-called cloud services, all the best ones work this way: remote access via a browser plus local sync for speed, fallback when the cloud rains, and for offline use, when the Internet isn’t available like on a plane.

This post was originally published on my Forrester blog.

Much that's been leaked about the Google announcement later today is familiar and evolutionary. What will matter most is how Google communicates the news and how it's received. This will set the tone for the Android smartphone operating system for 2010 and influence how other firms involved in Android — Motorola, LG, SonyEricsson as well as the operators — react and adjust their strategy.

Analyzing rumours is something of a fools game: In the three weeks since the first leak the speculation has shifted from "Google will sell the phone direct, unlocked, unsubsidized and without a carrier partner," which would be a very courageous, even suicidal, strategy in most countries to, "Google will sell a Google-branded phone that will be available both via a carrier and direct," which is a completely conventional strategy, again in most countries especially across Europe (Hint – Even then the subsidized phones are the ones that sell in volume, except in countries where virtually everything is sold without carrier ties like Finland).

The Nexus One phone that was given out to Google employees in December has transformed over the same three weeks from wish-fulfillment dreams of a revolutionary next gen device to a phone that is similar in spec to others available now such as Motorola's Droid (called Milestone outside the US), the iPhone, or HTC's HD2.

Much about the Nexus One appears similar to the first Android phone, the G1. Both are made by HTC. For both, Google was heavily involved in the specification. Both run a new version of Android. Both have the right 3G frequencies for use on T-Mobile US and European 3G networks; in the US that choice will determine the natural network for use which happens to be the same carrier that offered the G1. Both will have Google branding (the question is to what extent). Even the name is interesting: the G1 was commonly called the Google phone by consumers and the media and the G1 even had a Google logo on the back of the case (article from which photo was sourced).

What's new? What's to watch for in today's announcement?

• Precisely how strong will the Google branding be? Other Android phones have Google branding, it's the extent, not its presence that will be significant. How much of a brand message does Google wish to communicate?
• To what extent, if any, will the sales model differ from the traditional carrier business model?
• How will the phone be sold in other countries and who by? The G1 was sold under the name HTC Dream by carriers other than T-Mobile across the world. Are the new business model rumours specific to the peculiarities of the US market alone?
• Will other phones, tablets, devices or the Chrome OS be discussed today?
• Will Google choose to send any words of reassurance to handset makers or carriers about the future direction of Android?
• Again, how will Google communicate what it's doing? How will Google position its new products and what does that mean for future product portfolios of everyone working with Android?

Google unveils Android mobile phone platform, Open Handset Alliance

My first reaction to this, is that Apple and Nokia have already reacted, pre-emptively, to Google’s announcement that there will be shipping products sometime in late 2008 with the Google-inspired OS! Google’s news release is only a few hours old, the products are a year off, and yet the hype is already exploding!!!

Specifically:

Nokia’s Symbian Series 60 OS is already available to licensee companies, already differentiates on third party applications, plus Nokia already has a Linux platform on currently shipping shipping products (Read this report: Nokia Embraces the Whole Internet with the N810, published today).
My key finding seems especially prescient after Google’s announcement of its platform play:

The N810′s importance is vastly greater than the niche, savvy, youth audience, to which it will appeal or that small sales of previous tablets indicate. With the Internet tablet range, Nokia is incubating both desktop-quality technologies, and a new business model that is independent of the constraints of the traditional mobile value chain.

And Apple’s iPhone runs a very capable Unix-based OS, and will be open to third party applications (read this previous post: Nokia vs Apple: History Repeats with the iPhone SDK).
Again, this part of that entry seems prescient:

I find it doubly fascinating that no one has argued that Apple should license the flavour of Mac OS used in the iPhone to third parties. How times change. Except, of course, at Microsoft and Symbian where they continue to seek out new licensees for their mobile OS’s. History repeats.

Special Guest blog from Benjamin Lehmann:
A Belgian court has ruled against Google after a complaint was lodged regarding infringement of copyright by the Google News service. Although the ruling was issued on September 5, details only emerged yesterday. Copiepresse, who brought the case, handles copyright for the Belgian Press (French-speaking and German-speaking). The court ruled that links and summaries of articles in the Belgian Newspapers it represents, for example La Derniere Heure, La Libre Belgique and Le Soir, should be removed from Google News.
This move is not entirely unprecedented: Agence France-Presse (AFP) brought a similar case against Google last year. However, it is difficult to see what these organizations stand to gain in the long term from suing Google. By cutting themselves out of Google News, the Belgian press is only curtailing traffic to its online properties. Instead they should be competing to attract audience onto their sites via news feed aggregators, and adopting strategies to keep that audience onsite once they have arrived.
Online properties are increasingly important for newspapers seeking to target compelling younger audiences. A very small percentage of online consumers in Europe aged 15-24 are classed as heavy news readers (6 hrs plus pw), whilst over half are classed as heavy internet users. Newspapers face competition for new audiences from a growing number of news providers online, for example, portals, broadcaster online presences, news content owners, consumer generated content sites and RSS feed aggregators.
Online properties in Europe are optimizing their sites in order to attract traffic from search engines and aggregators. The large majority of newspapers in Europe are offering syndication of their content via RSS. The concern of Belgian newspapers is that deep-linking to their stories disrupts their site navigation: it allows users to circumvent the homepage, and hence avoid advertising and other sections which they would otherwise encounter en route to the story. However, it’s important to emphasize that Google news presents as much an opportunity as a threat to newspapers seeking to generate audience online. Newspapers should deploy strategies to maintain branding, engagement and advertising throughout individual stories, and seek to migrate audience from search engines and syndication feeds onsite.
Tactics for pursuing this strategy include:
a. Maintaining homepage-style navigation panels throughout site;
b. Embedding textual hyperlinks to related stories;
c. Selling banner and contextual advertising throughout the site;
d. Deploying audio and video to add value to stories.
JupiterResearch clients interested in learning more about the role of newspapers online should refer to Barry Parr’s report, The Future Of News. Alternatively, my forthcoming report, Defining The Role of Newspapers Online, will offer a European perspective on the matter.
Benjamin Lehmann,
European Content and Programming.