Kindle Review – Kindle Fire Review, Kindle 4 Review

This is yet another post on the benefits and dangers of going open. My utter confusion about what’s best stems from the fact that -

1. No one actually knows what’s best for customers. 
2. Some customers don’t care.
3. Some customers care a lot about openness.
4. It’s definitely not in the platform owners’ best interest to open the platform.
5. It’s definitely in the interest of non-platform owning companies to ask for the platform to be opened.
6. It’s worthwhile for some companies to create new open platforms and push them.

There are just three hypotheses this post will put forward -

1. Platforms are extremely lucrative. Opening them up endangers that.
2. There is no such thing as a benevolent company and they are not buying you a Free Lunch.
3. At some level customers don’t care if a company dies i.e. the same customers asking companies to do the right thing will not turn around and maintain profits for the company.

A lot of this stems from the Kindle Sudoku Apps and the one person who complained that $1 for 10 Sudoku puzzles is too expensive when they are available free elsewhere.

Platforms are extremely lucrative

Take Apple -

1. iPhones are subsidized by Carriers.
2. Carriers can afford to do this because they will make money back on subscription plans for data and voice.
3. At the $600 to $700 retail price there is NO way tens of millions of iPhones would be selling without subsidies.
4. The huge market size means the App Store can become a force. It means 100,000 apps are released by developers. 
5. App Store adds more value to the iPhone and generates more revenue.

It’s all connected.

Open is a Trojan Horse trying to compromise this profitable Platform

Google is pushing for an ‘open’ App Store so they can push Google Voice.

Now consider what Google Voice is trying to do -

1. Make voice calling free or very cheap.
2. This would kill voice plans i.e. customers wouldn’t need it.
3. Make iPhone customers into Google customers.
4. This would reduce Apple loyalty because instead of seeing Apple and associating the iPhone with Apple, they’d associate it with Google.

If Google gets to run Voice freely, carriers can no longer subsidize iPhones – They don’t have the voice plan revenues any more.

Basically, opening up the platform kills the value carriers can make from it, which in turn kills the ability to sell iPhones at $100 and $200.

This in turn means carriers can’t subsidize the iPhone - which lowers the sales rate and weakens Apple’s revenues and the App Store.

There is NO benevolent company except ones that are turning down money

Everyone loves the delusion that a company that is supposed to make its founders and shareholders and employees richer is a Care Bear that wants to keep giving us gifts and buying us lunch.

That’s just not true.

Let’s say a VoIP company like Skype takes a look at the App Store. Here’s their thinking -

1. Apple and AT&T spent a bunch on R&D and infrastructure to set up this platform.
2. They are now making a ton of money off of it.
3. How could we come in and steal the most profitable part?

It doesn’t matter whether they sell it as ‘best for the customer’ or whether they’re honest and say ‘it’s too good of an opportunity to pass up’.

1. Skype did not think ‘How could we best serve customers and make zero money’ – No, that would be Wikipedia and Craig Newmark.
2. If a company is selling for billions (like Skype or YouTube) or making billions (like Microsoft, Apple, Google) they are NOT benevolent self-sacrificing entities.

Take Skype – its founders are suing eBay – the same company that bought it out for billions. Even billions of dollars aren’t enough for these companies.

Yet, people live under the delusion that these same companies want to give them things for free. Perhaps it’s not delusion.

People go with their best interests

This is a simple reality that people themselves ignore.

1. Apple is the greatest company because they gave us this shiny, pretty iPhone.
2. Wait a minute – they won’t let us use free VoIP – Apple is evil.
3. Skype and Google are giving us free VoIP – they are our new favorites.

There are two different value propositions being offered -

1. Apple says if you sign up for a voice and data contract you can get this great iPhone for super cheap.  
2. Google and Skype say you can get voice calling for super cheap.

Customers want the Best of Both Worlds. They want to take Apple’s offer and get a $100 iPhone and then they want to turn around and stop paying for voice calling.

It’s about time we called a spade a spade.

1. People love to hear ‘open’ because it usually means free.
2. Companies that lost the race to create a platform love ‘open’ because they can steal other companies’ customers.

You can look at it in one of two ways i.e.

1. It’s all positive and customers want to work in co-operation with the company that gets them the best deal. 
2. It’s customers optimizing for themselves and companies optimizing for themselves.

In either case it’d be great to stop bringing in morality and good and evil into simple business decisions.

Good and Evil are Business Strategies being used very well

In every single area we always have the losers complain about how the #1 company is evil and how the losers are good and open -

1. Microsoft is Evil because it owns OS and Office software and they leverage their market position unfairly.
2. Apple is Evil because it won’t let other companies take it for a ride. 
3. Google is Evil because they’re using their position in search to attempt hostile takeovers of other markets i.e. books, browsers, etc.

It’s just tiring to hear people focusing on Good and Evil instead of building a great product.

We live in a free world. If you think Apple isn’t good – then build a better phone. Stop trying this ‘right thing to do’ nonsense.

the Kindle and the Kindle Store

Amazon is going to have to face all of this (in some ways it already is). No one cares that Amazon invested time and money and effort into resuscitating ebooks.

Nah, when it comes to our best interests we only have short-term memory. How evil of Amazon to not let every other company get a free ride. How evil of them to try and make money off of ebooks.

We’re less than 2 years removed from a world where $10 release date ebooks didn’t exist and yet we want cheaper and cheaper. Who cares about authors or publishers or Amazon. Free is best for us and everyone else doesn’t matter.

If another company launches a great eReader App Store Amazon will be forced to open up a Kindle App Store - Hello Trouble .

Filed under: Reality Tagged: | future of books, lack thereof