Amazon's Play
daringfireball.net
daringfireball.net
It's amusing that Gruber can see the brilliance when amazon does it, but not when Google does it. This is exactly google's strategy with android, except that it doesn't involve users buying content. Google makes money when you use the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple only wins if you buy an iPad.
>It might be hard to see the Android section of the chart so I expanded it below at 400% the original:
http://www.asymco.com/2012/05/15/android-revenues-in-perspec...
"Android" revenue as a whole to be compared against Apple's hardware revenues would need to include Samsung, HTC, etc. And then I'm sure Apple's margins would still be higher due to their excellent supply chain, but it's not like they aren't spending any money making all that hardware.
http://www.asymco.com/2012/02/03/first-apples-rank-in-mobile...
Linking to asymco is getting cliche ...
Asymco does pretty partisan analysis which has previously been debunked earlier. http://news.ycombinator.com/item?id=2471026
Wasn't he and Gruber making a lot of predictions and analysis that Android would never overtake the iPhone in sales? When that did happen,iPhone on Verizon was surely going to kill Android's ascendancy. When that failed to stop Android, they moved to the next metric that favors Apple, profit share.
It's like, before he writes some articles, he thinks.. okay here are some new numbers, how do I make Apple look good and Android/others look bad with these numbers? The only problem is that some people on HN give the Apple fan blogs too much traction on HN. Hell, Paul Thurrott's http://winsupersite.com is even hellbanned on HN from being submitted for the crime of being a Microsoft watcher site for which the punishment here is flagging to death.
Netscape could still be alive this way, but web would be way smaller.
Now, think your argument again.
If a customer downloads your free app from iTunes and then upgrades to your Subscription offering using an In App Purchase, then you have to share 30%. What Apple is asking for is that if the subscription is generated from inside of the app, you give a 30% revenue share on those subscriptions. That's why they disable links from your app to your website... because those revenue opportunities originate from Apple.
I am not a huge fan of this approach, but it's definitely more defensible than requiring a SaaS provider to give 30% of all subscription revenue to Apple. Apple does generate and give app developers a steady source of traffic/app customers, and it's not unreasonable for them to get some consideration for it. That said (and this is totally subjective), 30% does feel high to me.
Oh, and how much net profit has Android yielded Google?
Probably a whole lot. When my sister, who would otherwise be in front of a computer at most half an hour a day, can get an android smartphone for 150 euros and idly browse the Web all day, Google makes a shitload of money they wouldn't have if all these people were on cheap nokias.
http://techcrunch.com/2012/04/21/real-time-research-ios-domi...
Interesting framing and perception - I've never read anyone say that "Mozilla charges Google for being the default Firefox search engine", it's always been "Google pays Firefox to be the default Firefox search engine".
Same result, really, but it's interesting how much of a change it implies, passive vs active, etc.
Then again, markets are funny things. In a world without Android, I can't imagine the expensive iOS ecosystem being the only game in town. Something might have filled the sucking void at the cheap end of the market, but what?
So without Android isn't it safe to assume HTC would still be pumping out Windows phones, perhaps at $389 retail rather than $349?
It sounds like what we really want is a histogram of web usage vs number of users :)
http://techcrunch.com/2012/04/15/mobile-paradox/
http://techcrunch.com/2012/05/12/mobile-facebook-and-google-...
I only found this, about limited ad revenue sharing: http://paidcontent.org/2010/03/26/419-androids-secret-sauce-...
http://support.google.com/googleplay/android-developer/bin/a...
"the remaining 30% goes to the distribution partner and operating fees."
When I read that a couple weeks ago, I assumed distribution partners meant carriers, though I guess I don't really know what it means. Also, operating fees probably means Google, so I stand corrected.
Android has cost billions but what if Apple and Microsoft shared the mobile market and replaced the default SE with Bing or Yahoo? That was Google's worry and that's why they spent billions for years. That huge expense was essentially hidden by filling web search pages with ads in commercial niches to the point of making them unusable. When earnings grow by double digit questions are few
I thought it was pretty clear that they're an e-commerce powerhouse.
You must not think much of your soul if you think what they do is auctioning it off.
Until they do that Android is not a win.
if google can encourage people to use the internet more by selling smartphones, they win. The point of android is not to cannibalize iOS market share, it's to eliminate the dumbphone. They don't want anybody to ever be without internet.
If what you said where true more of their revenue would come from mobile. It doesn't, look it up.
The best way to win at that game is to either force the market to adopt the system they can manage ("with Google" approved Android phones and the market) or make the web the only worthwhile source of truth among a hodge-podge of OSes that try to bolt on proprietary components. Even the major commercial forks of Android have not yet proved to derail this from succeeding.
> that try to bolt on proprietary components
$ cat /etc/motd
Welcome to Ubuntu 12.04.1 LTS (GNU/Linux 3.2.0-30-generic x86_64)
* Documentation: https://help.ubuntu.com/http://www.ralree.com/2011/11/25/removing-advertising-from-u...
If this is no longer the case that's great. :)
Android gives Google a large number of devices where Google is the default search engine and (assuming we're talking about the "official version") always will be.
That's a big win - default search in the browser is something they and others pay a lot for and for (official) Android devices Google aren't paying that. The reason that they pay that money to others (including Apple) is that that's a way of serving and selling ads to the mobile platform.
Amazon makes money whenever you buy their content. Google not so much.
When you have a strong platform player that have decisive power over how they locate information — in the case of Apple, (1) control over the default search engine in Mobile Safari, (2) control over what web browsers are approved for their App store (3) has their own maps app backed by their own services and partners, which doesn't include Google (4) demonstrated capability and intent to build alternate ways to access information such as Siri (5) demonstrated animosity — I'd say Google doesn't feel like they win if you buy an iPad.
So correction, it should be "Google makes money when you use their services".
Not necessarily. It simply means they have more incentive tying you down to their 'product' and stifle any competition. Google on the other hand couldn't care less about what device you use as long as you use their services.
At least with a physical device, you may be able to subvert any ill intentions.
You should really tell them they're screwing their tying down plans with their Data Liberation initiative, the Google Takeout and all those APIs.
Funny, my Kindle has ads. I believe you mean IF you pay the $15 extra, and for all I know is that $15 allows you to turn off ads. As far as I know, it doesn't preclude Amazon from selling your information and choices to third parties. Someone correct me if I'm wrong.
Ad clicks is the product, and not users' data. If you setup an ads campaign, you will see that the adwords experience is not nearly as polished as other Google products - and why should they care, businesses just HAVE to use adwords to gain traction. If anything, Google treats its ordinary users as clients, and forces its advertising monopoly on advertisers.
Google's using data they aggregate about me to pick and choose which ads I should see, ideally optimizing for ones that I'll click on. Those clicks are sold to advertisers.
Google's selling our clicks to advertisers. We are the product they're selling.
uhm..what? There's no ads in android itself, and I almost never look at ads on my phone..
Please note that I don't think this is a bad thing, and I love and use Google's products myself very happily. But there is a difference between Google who is collecting revenue from advertisers, and Amazon/Apple who are making their money primarily from consumers.
Well, it's not the same at all.
For one, Google wins a minuscule amount of money if you use the internet. Amazon probably makes more off selling 1 (ONE) Kindle book than Google makes from you using their search engine all year around on their tablet.
Second, noone buys those other tablets (apart from iPad/Kindle). The numbers are 1/10 the iPad numbers and less.
Third, Google doesn't even win when people use Kindle Fire, despite it being Android. IIRC, Amazon switched the search engine to Bing.
>Google makes money when you use the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple only wins if you buy an iPad.
And how does that work for Google vs Apple revenue/profits so far?
I think it's a bit premature to write off all other Android tablets entirely. In 2009, Android phones also seemed like they weren't in the same league, and none of us could imagine living in a world where Android outsold iOS devices 2-to-1, but it happened.
Direct link to APK: http://forum.xda-developers.com/attachment.php?attachmentid=...
That said, I vastly prefer Netflix to Amazon Instant Video.
Still, he has his moments of clarity.
You mean the same tech writers who have been breathlessly talking about tomorrow's iPhone 5 announcement for months? A device that fits this description exactly?
The source (http://9to5google.com/2012/09/05/eric-schmidt-1-3-million-an...) says "Google CEO Eric Schmidt announced on stage that 1.3 million Android devices are being activated daily, of which 70,000 are tablets."
So tablets account for more than 5% of Android activations (not one half of one percent)
Unless I'm mistaken and 1.3 million is by some weird definition 13 000 000.
I had the opposite reaction. Hearing this line, hearing about the ads on the lock screen, and seeing this slide (http://www.blogcdn.com/www.engadget.com/media/2012/09/amazon...), I immediately knew I wouldn't be switching from an iPad to a Kindle.
If the Kindle Fire implementation is similar, I wouldn't hesitate on that count. (There may very well be other reasons not to get one... We'll see when they come out!)
1) When you turn your Kindle off, there will be a full-screen ad.
2) When browsing books at the main menu, a small horizontal bar across the bottom of the screen will display an ad. You only come to this screen by choice, though -- if you were in the middle of a book when turning off your Kindle, when you turn it back on it will go straight to where you were in the book without showing this menu.
Since they never interfere with reading, they are extremely non-intrusive. I think they are personalized but not positive.
Interesting how you were willing to consider the device beforehand, but that was a deal breaker.
Or maybe it's a matter of principle...
I own a 3G Kindle that pre-dated ads. When I saw the ads on my wife's newer kindle I actually opted-in to add ads to my version. The ads are more attractive that the default screensaver and occasionally you get a really good deal. (like $5 Amazon credit)
On the other hand, I don't think it's hard to see that most other manufacturers' philosophies go along the lines of "Let's make everything we can think of and see what sticks." Microsoft, for one, is only starting to turn around from its philosophy of "We want to be everywhere in your life" to focus on customer experience. These approaches are business-centric, and don't present anything that the consumer can trust or grab onto, especially when you think about the various music stores and other half-hearted approaches at retaining consumers who buy their products.
Intrinsically, I think customers understand the lack of focus - that these manufacturers are fundamentally focused on gaining a share of the pie rather than making customers really happy with what they just bought. With Apple, it's "Look at all these neat things I can do with all these apps"; with Amazon, it's "Look at all the stuff I can buy and read/listen to/watch." Other companies are only recently coming on board, and as long as they're not focused on giving the customer something to do with their products, they're going to miss out.
But if anything I'm thinking of downgrading to an e-ink reader. I spend way too much time looking at backlit screens in a typical day already.
Amazon does makes a decent margin above the marginal cost of the $299 kindle fire HD and on the kindle fire HD LTE: http://www.eetimes.com/electronics-blogs/other/4395833/BOM-b...
It's hard to tell if they profit even after including fixed costs, but they might.
But pricing it's low end model slightly above it's BOM is a signal to competitors: "we don't care to profit from sales, if you'll compete, you'll lose".
I wonder what Google has planned to fight for the top? Google's Nexus line is their first step into the battle. They're obviously trying to get involved in the media game but they know they're late compared to Amazon and Apple. Surely they will be stepping up their game for the next release.
Google can compete on price though, since they make money from the services they offer, just like Amazon.
I am a huge fan of AWS, love the Amazon's "pay what you use" philosophy. However, I bought a Kindle Fire before, and since decided not to buy any more in the future. Not matter at what price. Sometimes you shouldn't be doing what you are not good at.
I'm currently an iPad user.
If I don't have the iPad now, I would be torn between buying the two.
The Kindle Fire is cheaper. Amazon's customer service is great.
But the most compelling reason is they have Amazon Prime. Being able to access all the Amazon Prime free movies and TV shows is a huge draw, at least to me.
There will be those who will buy it to install their own Android versions also. Small group though.
If I were to recommend either tablets to friends, I'm not sure which one I will recommend. Prior to this release of Kindle Fires, I would have recommended the iPad without much thought.
The Nexus 7 is pretty cheap too, is there any good reason to buy a kindle over one?
Not really. Some analyst expects 8 million shipments Nexus 7 by the end of 2012. The guesstimate was based on LCD screen shipments.
The implied statement is compared to iPad, nobody is buying Android tablets.
They might be selling faster than they can be manufactured, but it's still a tiny fraction of iPad sales. All of Google's revenue is a tiny fraction of iPad revenue.
Q3 2012, Apple iPad revenue: $9.171B on 17M units Q2 2012 (different calendar system), Google revenue: $12.2B.
I was thinking of iPhones. Q3 2012, Apple iPhone revenue $22B
- They are all over with their tablets trying to compete with iPad or Samsung ones, it doesn't seem to have the same focus of the original: simply a good device to consume digital content. They will lose if they try to compete like that, trying to release full-featured tablets at low margins.
- Their event is way too much like Apple's WWDC. I mean, even the slides look like they are done on Keynote. It doesn't give a good impression.
Why would they lose? The Kindle Fire seems like a great device to consume content: movies, music, books, and also many popular Android apps.
- Their event is way too much like Apple's WWDC. I mean, even the slides look like they are done on Keynote. It doesn't give a good impression.
Doesn't give a good impression to whom? Do you think the average Amazon costumer cares? I don't.
It was nothing like WWDC--there was no developer conference. It was a single presentation. That they possibly used a major presentation application to run a presentation is not very surprising. They probably had coffee in the back of the room too.
Facebook's strategy is to own everyone's on-line "sharing". Google's strategy is to own everyone's "search" (broadly defined). Amazon wants to own everyone's retail experiences.
Amazon would love it if slick devices were cheap enough to just give away -- they'd know instantly how to make huge money off that. Google and Facebook? Not so much.
http://daringfireball.net/linked/2012/07/27/amzn
http://daringfireball.net/linked/2012/07/27/amzn-profit-corr...
The whole Apple is superior to Company X because Company X makes far less profit might be what his target audience revel in, but is non-sequitur and gets old fast. How would he have reacted a similar comparison with, say Microsoft when Apple was not doing so well?