Olivier pointed out an article on twitter this morning: Five lessons Apple can learn from Amazon. I have the feeling that the article is missing entirely the point, because Amazon and Apple are not playing in the same markets:
- Amazon is using a device to sell books.
- Apple is using books to sell a device.
It’s two different markets.
The strategy of Apple has always been the same: What can I do to sell more devices?
- create a device that will seduce people.
- propose content on this device
- seduce publishers by offering an ecosystem where they can sell copyrighted (DRM) content.
- once they have a significant market share, twist the publishers arm to make the content without DRMs and satisfy consumers.
Apple did it with music: music / iPod / iTunes Store, they will do it again with books: books / Ipad / iBooks.
Amazon is using devices and software to sell more content. Apple has often an evil twist by selling products that consumers own. It is like a pet, a longterm relationship. Content is not. People loves book-object, not book-content. Book-content is something which is entertainment, a few days to a few weeks (except for dictionaries, references books which are services).
Google in another fashion wants the content free, and create an ecosystem without barriers for accessing content. So they push opensource, free content or more permissive licenses, etc. The more the content is open, the more they are able to index it for selling ads.
The summary is
- Content for Apple is a mere commodity for selling devices.
- Content for Google is a mere commodity for selling ads.
- Content for Amazon is their core business.
ps: note that all of that do not please me in any ways.
2 opinions
I somewhat disagree with you here. Not that I’m in the heads of Apple’s board or management, but it looks like they don’t quite consider content to be a mere commodity they (ab)use to sell more devices. I think they’re actually the only company having managed to control both the hardware and content market. Content now amounts to 1/4 of their sales (a mere couple billions), and I wouldn’t be surprised if they were aiming for a cozy fifty-fifty in a year or two.
That’s something a few others have tried to replicate and failed – notably Sony…
Perception ?
According to http://www.sony.net/SonyInfo/IR/financial/ar/2009/index.html
Sony revenues shares for 2009 are:
* 65.1% electronics
* 12.7% games
* 9.3% pictures (aka movies)
* 6.8% financial services
* 6.1% all other (which includes music)
so 15% with content (music revenues have increased this year)
Do we count games into content?
The market is also slightly different because Sony is a producer not only a sales company.
http://ccbn.10kwizard.com/xml/download.php?repo=tenk&ipage=6568695&format=PDF
Apple does not produce an annual report available online. But they fill the 10K annual report. In Apple statement, we can read
“The Company is committed to bringing the best personal computing, mobile communication and portable digital music and video experience to consumers, students, educators, businesses, and government agencies through its innovative hardware, software, peripherals, services, and Internet offerings.”
and then
“The Company’s business strategy leverages its unique ability to design and develop its own operating system, hardware, application software, and services to provide its customers new products and solutions with superior ease-of-use, seamless integration, and innovative industrial design.”
page 44 of Apple PDF document for 2009
* 82% devices (iphone, ipod, hardware, laptop, desktop)
* 7% software
* 11% music and services (including iTunes Store sales, iPod services, and Apple-branded and third-party iPod accessories)