Microsoft Watch, Apple iWatch, Kindle Watch – Everyone’s making a smart watch

Microsoft is crashing Apple & Amazon’s smart watch party.

The Verge reports on Microsoft’s Smart Watch, the latest competitor to Amazon’s rumored Kindle Watch

  1. Microsoft Watch will be made of translucent aluminium. It’s Oxynitride Aluminium and it’s 80% transparent and four times harder than glass. Magnesium for the Surface and translucent Aluminium for the Microsoft Watch – Who would have thought Microsoft would fall in love with beautiful hardware.
  2. Microsoft’s Smart Watch was designed and prototyped by the Xbox Accessories Team.
  3. It has been moved to the Surface Team (which makes the Microsoft Surface tablets, which are beautiful pieces of hardware).
  4. Microsoft’s Watch is rumored to have a 1.5″ screen. That seems small to me.
  5. It connects to Surface tablets. It runs on a modified version of Windows 8 and connects with other Windows devices too.
  6. There are removable wristbands in blue, red, yellow, black, white, and grey.
  7. AmongTech claims Microsoft Watch will have 6 GB of storage (mostly for the OS) and LTE support.
  8. Notifications and music are rumored features.

I like the direction Microsoft is going in. The addition of LTE, not to mention the use of a flavor of Windows 8, suggests Microsoft will be making a stand-alone smart watch that also syncs with other Windows 8 devices. That’s much better than a ‘smart’ watch that is a mere accessory.

With features like a translucent aluminium case and LTE and Windows 8 based OS, Microsoft Watch will be a very strong competitor to Kindle Watch, whenever it arrives.

Could Amazon NOT be making a Kindle Watch?

We’ve already covered the plethora of Kindle Watch competitors in the works.

This is what we’d written about the Kindle Watch earlier –

  1. Kindle Watch Probability – 100% if iWatch and/or SWatch (Samsung) and/or Google Glass take off. 25% otherwise. Amazon might wait to see how wearable computing does, before jumping in.
  2. Arrival – Perhaps end of 2014. Perhaps end of 2015. On the one hand, Amazon likes to wait and see. So it might wait to get a year’s worth of data on wearable computing sales. On the other hand, Amazon knows that being too late to the market makes things really difficult. Amazon might gamble on wearable computing sooner rather than later. I’d predict Amazon is cautious and Kindle Watch ships in early 2015.

The biggest recent development in the Smart Watch market is Pebble’s announcement that it has sold 275,000 preorders of its smart watch. If an unknown, crowd-funded startup like Pebble can sell 275,000 preorders, then, surely, companies like Apple and Samsung and Microsoft and Amazon have a shot at selling tens of millions of smart watches.

The major incentive for Amazon is to enter a Hot New Market early. If this ends up being a market of tens of millions of devices sold every year, then Amazon wants to get it right and ship early. If this ends up being a market of hundreds of millions of devices sold every year, then there is no way Amazon can sit it out.

The major disincentives for Amazon are – a company like Apple or Microsoft or Samsung might release something much better than everyone else and would thus take most of the market, there might not be a big smart watch market, the market might get splintered to the point that Amazon can’t sell enough Kindle Watches to reach scale, Amazon might not be able to afford fighting device wars on so many fronts (especially if Kindle Phone is slated for Fall 2013).

Speaking of Apple, it seems Apple is ‘aggressively hiring team members for iWatch’.

Apple’s iWatch slated for 2014 release?

After months of speculation that an Apple iWatch would arrive in Fall 2013, we get news from Financial Times that Apple is aggressively hiring for its iWatch project, and that iWatch might be delayed to 2014. The key rumors –

  1. iWatch might not arrive until late 2014.
  2. Apple is hiring for iWatch.
  3. iWatch involves very hard engineering problems that Apple hasn’t been able to solve. It is, therefore, hiring from outside.
  4. There are 100+ Apple employees working on iWatch.
  5. Apple hired the CEO of YSL. He is rumored to be working on iWatch.
  6. Apple has filed for the ‘iWatch’ trademark in lots of countries, including Japan and Russia.
  7. iWatch might include a display on the strap. This is the most interesting rumor by far.

If Apple’s iWatch is set for 2014, then it becomes even more important for Amazon to release its Kindle Watch quickly. It has a window of opportunity – the 2013 Holiday Season. Amazon can take significant market share in the smart phone market if it releases Kindle Watch before Christmas 2013.

Will there be enough space/demand for a Kindle Watch?

Let’s say Amazon releases a Kindle Watch. Who’s going to buy it?

  1. Apple iPad and iPhone owners will flock to the iWatch.
  2. Windows users will mostly choose the Microsoft Watch, provided it’s good. Microsoft’s smart watch working with Windows is a big plus.
  3. Android users will generally choose Google’s Smart Watch (strong rumors) or one of the ‘fully open’ Android watches.
  4. People who want longer battery life will choose an eInk screen based smart watch like Pebble.
  5. Samsung Galaxy owners will tend to prefer Samsung’s Smart Watch. Samsung also has a $4 billion a year marketing budget that it can leverage.
  6. Lots of companies like Dell and HP and Acer are releasing smart watches of their own. These will take some market share.
  7. Lots of startups are releasing smart watches. Some of these are very innovative and will appeal to the early adopters much more than the ‘safer’ smart watches that are merely accessories for phones and tablets.

Basically, there are quite a few challenges that Amazon and Kindle Watch have to overcome, including –

  1. With so many companies releasing smart watches, how does Kindle Watch stand out and get attention?
  2. With so many smart watches splitting up available sales, how does Kindle Watch sell enough to hit economies of scale and innovate and evolve?
  3. With so many people aligned to existing, established ecosystems, how does Amazon convince them to leave their existing ecosystems and choose a Kindle Watch?

Amazon does have its own ecosystem – perhaps 10 million to 30 million Amazon customers who would prefer a Kindle/Amazon device to any other device. However, the key questions are – How many of those people will buy a Kindle Watch? How many of those people are even remotely interested in a Kindle Watch?

With every new entrant to the ‘How New Smart Watch Market’, three fundamental questions take on increasing importance –

  1. Is there a Smart Watch market?
  2. Is this a millions of smart watches a year market, or a hundreds of millions of smart watches a year market?
  3. Is there place for Kindle Watch in this Smart Watch Market?

We don’t know the answer to any of these questions. A lot of companies are betting Yes for the first two questions. Is Amazon betting yes for all three, and making a Kindle Watch? I certainly think it’s a bet Amazon has to make. It’s been slow to Tablets and Phones and it can’t keep setting itself Herculean catching-up tasks.

Apple price-fixing case will helps books and ebooks and readers in ways people don’t realize yet

In the wake of Apple being found guilty of conspiring with Publishers to fix ebook prices, people are reacting in very emotion-driven ways.

How could the Judge find Apple guilty? How could the Judge make things easier for Amazon? What will save us from Amazon now? Does this really help customers?

People are reacting so strongly that this story is the #1 story on both Techmeme and Mediagazer.

It’s interesting to see most people miss the point completely –

  1. Apple eBook Ruling doesn’t do much for consumers.
  2. For Consumers, not much changes. For Apple, a lot could.
  3. Forbes find it hard to believe Apple is wrong – Did Apple conspire to raise prices?
  4. David Streitfeld at NY Times – E-Book Ruling gives Amazon an Advantage.

Let’s look at what this ruling REALLY does.

Precedent

This court verdict, especially if upheld on appeal, establishes precedent.

  1. Any group of powerful companies, when trying similar things in future, will know that they are going to get slapped. Particularly true in books and ebooks and Publishing.
  2. Precedent that doing something wrong will probably get you punished.
  3. Precedent that any company (group of companies) that causes prices to go up 30% or more for consumers, illegally, will get brought to justice.
  4. Precedent that even a media darling company like Apple can’t bypass Justice. If you read some of the Press’ articles it’s just disappointing to see them use weak strategy like ‘Amazon shouted and screamed in meetings’ to try and get Apple off the hook. Precedent that all the media could be your dumb brainwashed little lapdogs and you’ll still get brought to justice. This is a very big deal.
  5. Precedent that you can’t fool all of the people all of the time.

You can paint any picture you like. The bottom-line is that Apple and Publishers introduced the Agency Model and caused tens of millions of readers to either pay higher prices or wait for 6 to 12 months. That’s just not the right thing to do. What kind of parent raises their kids to do things like that? Seriously – would you raise your kids to exploit other people in that way? To take away a book they were dying to read for 6 to 12 months, unless they paid an exorbitant price for it?

Readers are the people who pay for EVERYTHING. To mistreat them like this is just wrong.

Note: Most companies, including Amazon, have their own little ‘we’re too big for our breeches’ episodes. That’s why it’s important to show that no company, no matter how big and powerful, can get away with doing wrong things.

Creative Destruction and Ensuring Progress

What Apple and Publishers were trying to do, and what now Amazon is trying to do, is stop the Creative Destruction that is happening in Publishing.

It’s inevitable. The existing gatekeepers will fall. Then the new gatekeepers, so happy to seize the opportunity that they don’t see the barbarians at the gate, will fall.

If we let Apple and Publishers get away with it, then it makes Amazon and the new gatekeepers feel they can get away with it too. Now, they know they might get caught. They will still try. However, we have PRECEDENT and we have punishments.

The second great revolution in publishing is not going to end with one gatekeeper replacing another. It’s going to end when gatekeepers are replaced by servants. Servants who serve authors and readers instead of lording over them.

The Court’s decision ensures that some of the obstacles slowing down the much-needed creative destruction are struck down. More importantly, it ensures that the people busy setting up new obstacles think ten times before doing evil.

Room for New Players

Who’s going to take books and publishing forward?

  1. Publishers and Apple, who want to pretend we’re in the paperbook world.
  2. Amazon, who wants to pretend that we’re in the paperbook world with Publishers replaced by Amazon.
  3. Readers and Authors.
  4. New Players that serve Readers and Authors.

Only 3 and 4 are actually interested in progress.

The dream situation for Publishers is for eBooks to suddenly stop growing or die out. The dream situation for Amazon is for eBooks to replace books but within Amazon’s closed ecosystem.

Readers, Authors, New players – they all want a new system. They will get it.

Why? Because attempts by the existing gatekeepers and attempts by the self-anointed rising gatekeepers, to impede progress –

A) Will only delay the inevitable.

B) Will lead to court decisions like this one, and give the guilty parties the double slap of public shaming and destruction of their strategy.

The number and types of moats that can be built to protect the existing castles and fortifications just got reduced drastically.

Consumer Focus

What won the case?

The fact that the HARD FACTS showed that prices went up due to Apple’s efforts. That this was bad for consumers.

At the very least, this ensures that future meddlers and scum, who try similar tactics, will try to minimize damage to customers when they try to corner the market.

That can only be good for readers. If all the players involved are painfully aware that any exploitation or abuse of readers/customers will lead to eventual justice.

Better shot for Indie Authors

If companies had the option to just make indie authors disappear, they would.

Now, any attempts to hinder/hide/handicap indie authors will be rethought. Because if these methods get found out, and it can be shown that it led to higher book prices for readers, then it’s the exact same mess that Apple got into.

You can bet a lot of emails are getting deleted at various eBook platform companies regarding handicaps and boosts and pricing methodologies that are not pro-customer.

No company will want trouble of the sort Apple has gotten into. At best, they will stop their meddling with indie author rankings. At worst, they will use even more subtle, hard to track methods – these, in turn, will perhaps be less effective.

This ruling HURTS Amazon, not helps it

Why could Apple and Publishers pull off the Agency Model? Because they had the power. This is the KEY thing everyone is missing. Without power you can’t do much abuse.

What company has the most power now? Amazon.

So, the company most likely to abuse power is Amazon, not anyone else.

If the Court and the Judge clearly indicate that they will not stand for abuse of power that hurts consumers, then Amazon is going to be wary. What damage can Apple do in books now? Not very much. Amazon, on the other hand can cause lots of problems. This ruling serves as a strong warning to them to not abuse their power too much.

This ruling is a warning to Tech Companies that try to prostitute users and their rights

You could bet $1 million dollars that in dozens, if not hundreds, of companies’ boardrooms, this ruling is being discussed and has served as a warning.

If you do things that hurt consumers’ best interests, then you might be brought to justice. All these companies know that they aren’t the media’s darlings, or America’s Favorite Tech Company that makes everything in China, or the company that made thousands of people rich via its stock (well, up to $700 it did).

If Apple can get hammered, then so can they.

In Summary – It’s about the Future of Books

This isn’t about allegiance to a company, wariness of another company, or about looking out for your own selfish best interests.

It’s about what THE RIGHT THING TO DO is.

What’s the right thing for readers? What’s the right thing for authors? What’s the right thing for the future of books?

District Judge Denise Cote has ruled in favor of doing the RIGHT thing for Readers and Authors. Every few years, there’ll be a company that has power in books, and tries to exploit readers and/or authors for its own selfish interests. It’s up to readers and authors and the DOJ and the Judicial system (which might be our only hope) to fight against this. Only the powerful can prevent abuse of power. Only readers and authors and the judicial system can protect the future of books and reading and readers and authors.

Apple found guilty of conspiring to fix ebook prices, Karma smiles

While there are a lot of ‘I Love Apple’ and ‘I Dislike Apple’ based opinions, it’s quite easy to see, if we step back from our personal perspectives, that –

  1. The Agency Model would not have happened without Apple’s help.
  2. Apple, and in particular Steve Jobs, was quite happy to go around telling people how it has ‘ensured prices will be the same everywhere’. It takes a special type of hubris to say it on tape.
  3. The Agency Model led to a LOT of readers feeling the pain of either paying $13.99 or more for new releases, or having to wait 6 to 12 months for prices to reach below $9.99.

With that in mind, it is refreshing to see Apple found guilty of conspiring to fix ebook prices. Apparently, Apple’s ‘If we didn’t do illegal price collusion, then Amazon would have done it’ and ‘People at Amazon screamed and shouted, and were very un-gentleman-like’ defences didn’t work.

Paid Content points out that there’s a lot of HARD EVIDENCE the Judge used to make her ruling –

Cote also pointed to what she said was clear evidence that the conspiracy led ebook prices to go up:  ”two weeks of moving to agency [pricing led to an] increase of 14.2% for their New Releases, 42.7% for their NYT Bestsellers, and 18.6% across all of the Publisher Defendants’ e-books.”

Apple will, quite predictably, appeal. However, I really don’t see how it can win an appeal given there is an inordinate amount of evidence that Apple’s actions did, in fact, lead to higher book prices for customers.

A Blow in the Perception Wars?

Apple perhaps doesn’t care about ‘damages’. It does care about the perception. For Apple it’s ALL about the Perception Wars. Like the most popular girl in high school, it doesn’t really matter if she’s suspended. She just wants to make sure she was suspended for doing something ‘cool and rebellious’ that ‘stuck it to the man’ and not something tacky that hurt fellow students.

The new ‘Special Divisions’ VP at Apple, the former head of YSL, now has to work just a little bit harder to make sure the poor little rich girl still wins the Prom Queen crown.

Karma is calling

Remember how Steve Jobs (he still seems to figure rather prominently, doesn’t he) promised to wage thermonuclear war on Android.

Perhaps he should have shown the other cheek.

It seems Samsung won against Apple on some patent (probably for holding a device vertically with one hand (actually, it’s wireless related)) and on June 4th ITC banned the Apple iPhone 4 and the Apple iPad 2. The ban goes into effect in 30 days, unless the President overrules it (doesn’t he use a Blackberry? There goes that option).

Apple has asked for a stay, claiming it would do massive irreparable harm to Apple and to its wireless provider partners. Well, they should have thought of that before selling phones that could be held with one hand.

After all the drama and all the patents on things like rubber banding (yes, you can get patents for how scrolling a list ends, for the visual effect no less) it is poetic justice that it is Apple that might be forced to stop selling iPhone 4 and iPad 2.