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21 Apr 2014
17 Apr 2014
This week, Google held the first developer conference for Project Ara, their initiative to develop a truly modular smartphone. As with any potentially disruptive product, traditional analysts have been skeptical because of the trade-offs in size, weight and power consumption. The flaw with this line of thinking is that it focuses too heavily on high-end customers and today's smartphone users -- most critiques of disruption theory in consumer contexts suffer from the same flaw. In reality, a shift in the basis of competition and, consequently, business model innovation often takes root among non-consumers or low-end customers. The real challenge lies elsewhere.
15 Apr 2014
According to recent reports, Facebook is in the early stages of building an electronic payments service. The rumored focus on emerging markets suggests that this service may have a tie-in with Whatsapp. More importantly, an e-payment service could meet one of two possible goals with respect to Facebook's (or Whatsapp's) business model.
10 Apr 2014
In my last post on "field-of-vision" tech, I hypothesized that these products were unlikely to be "good enough" for mainstream usage for at least five years. Initially, their success will not depend on mainstream appeal, but on their value to a certain niche of "non-consumers". The traction seen by Google Glass in sectors like medicine seems to be consistent with this pattern.
7 Apr 2014
In 1998 AOL paid $287 million to acquire ICQ, a pre-revenue instant messaging (IM) client with a "massive" base of 12 million users. In just three years ICQ's user base grew to 100 million, but it never seemed to take off as a business. Over the past few months, some observers have drawn parallels between the valuations drawn by dot-com era products like ICQ and smartphone messaging apps -- Whatsapp's $19 billion valuation is usually part of the argument. In reality, there are major differences between the dot-com bubble and what we see today.
3 Apr 2014
23% - That figure alone explains Amazon's goal for Fire TV. In 2013, it was estimated that the Kindle ecosystem was responsible for 11% of Amazon's revenue, but 23% of its operating profit. However, the revenue numbers also include $4.5 billion in Kindle device sales (6% of Amazon's revenue) which were sold at break-even. This means that 23% of Amazon's operating profit came from a business that accounted for just 5% of its annual revenue.
1 Apr 2014
Xiaomi's CEO, Lei Jun, revealed some interesting figures last week that could shed some more light on the potential of their business model. While most of these figures refer to sales volume, we can also use them to gauge the potential of future services revenues -- Xiaomi's core monetization strategy.
27 Mar 2014
Yesterday, Facebook announced its second blockbuster acquisition in less than a month as it purchased Oculus VR for $2 billion. Oculus VR's virtual reality headset was built to focus on immersive gaming experiences, but Facebook aims to eventually expand its use cases. Does this put Facebook in a position to create the next major platform?
25 Mar 2014
A few days ago, I came across an interesting report stating that Google has attempted to sway South Korean developers away from KakaoTalk's mobile gaming platform. Assuming the report is factual, let's take a look at Google's motivations in context of the potential threats to their business model.
21 Mar 2014
When Apple announced their China Mobile deal a few months ago, I commented that the analyst community seemed to lack clarity about the nature of the Chinese market. My hypothesis was based on the identity-utility continuum and the pricing model used by Chinese carriers. Information from China Mobile on initial iPhone sales seems to validate this hypothesis.