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June 20, 2014

The Secret Is In The Computing Platform

Posted by Suryaprakash K. (View Profile | View All Posts) at 5:43 AM


Amazon CEO Bezos Introduces Smartphone [Source: http://www.youtube.com/watch?v=Lz5WnBpf8XU]

This week, as another tech giant (Amazon) unveiled their own smartphone, I recall something Steve Ballmer used to tell his Microsoft colleagues about this hyper-competitive sector. Jump on the back of the big bear and don't let go, he'd say. He was referencing IBM as the big enterprise that Microsoft would jump on the back of in the 1980s. Getting on the back of a tech giant and not letting go is pretty interesting advice, I'd say. It's just as pertinent today even though many of the players have changed. And with the unveiling of an Amazon smartphone, that business advice from the 1980s is essentially turned on its head.

Amazon, you see, is already a big bear and wanting to get bigger. By launching its own mobile device, Amazon is essentially shaking off any enterprises that have been riding on its back. Amazon, with its own platform, has a clear and direct route to its consumers and will be further along in its strategy to sell everything to everyone. Consider that Microsoft, which has long been the dominant desktop platform, and Nokia, once the world's most popular mobile phone, together are but bit players in the current smartphone market. In some ways, I think that because the current market doesn't really care about legacy, Amazon might be all the more successful launching its own mobile platform.

Of course, people still enjoy shopping on larger screens (desktops and laptops), but if a smartphone outweighs size with a dazzling array of convenient features and apps, digital consumers will follow.

ComScore, a financial Web consultancy, recently released its first-quarter sales projections for desktop Internet commerce. Spending rose 12 percent year-over-year to $56.1 billion. That makes it the 18th consecutive quarter of year-over-year growth and the 14th consecutive quarter of double-digit growth. Here's where it gets even more interesting: Mobile commerce spending over smartphones and tablets accounted for another $7.3 billion in the first quarter. That's a 23 percent rise year over year. So if you combine traditional desktop spending with the red-hot growth of mobiles, you're looking at a total of $63.4 billion in just the first quarter of 2014 alone.

It's not that desktop e-commerce isn't going to continue to be extremely important to every enterprise in the retail space. It's that the mobile platform is growing all the more robustly. And because players like Microsoft that rule the desktop platform aren't necessarily as prominent in the smartphone space, it suggests that the mobile arena is wide open for smart entrants.

It's also an arena in which first movers might very well have a tremendous advantage. Think about the impending IPO of Alibaba and the splash it could make in the North American market. A lot of its strategy is based on transforming e-commerce to an online-to-offline model. Doing so, I think, will necessitate a smart and significant mobile presence itself. I suppose Amazon is trying to stay ahead of the race by establishing its own mobile platform.

So just how many devices over several platforms can a digital consumer realistically use? The simple fact is that as the slices of the pie increase, everybody's slice gets a little smaller. That's why I think digital companies would do well to constantly endeavor to stay at the top of their game.

Comments

Amazon has followed suit - Facebook had very unsuccessfully tried to launch its own mobile platform and Google's very own Nexus series failed to make any serious threat towards the likes of Samsung (ironically) and Apple.

It would be interesting to see how 'firefly' works in real time and how the average digital consumer responds to a phone which endeavors to know more about you than yourself!

Glad to see the SoS button make its way on to the phone - that was one feature on the new Kindle series that was really well thought of and received.

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