Microsoft changing value chain

I think part of Microsoft DNA is running after Apple in the consumer arena. After copying the window User Interface of the Mac computers 25 years ago, they are currently copying its value chain. I mean Apple integrated value chain. If you think of Microsoft as a software company, you are wrong. It is now a service and device company.

Microsoft value chain

Microsoft value chain

As Apple did they want to control every step of their value chain from content and services to devices.

They have services like skype, skydrive. They aggregate content and provide platforms both software and hardware. And since it is a device maker with Xbox, Surface PCs and tablets, and Mobiles with the recent Nokia acquisition.

What they still miss is some retail presence like apple stores. The danger here for Microsoft is to upset its long standing partnership with PC manufacturers. But can they fight back at Microsoft move in their backyard? The answer seems no. Linux isn’t an alternative in the mass market, neither is Chrome OS from Google or Android. Microsoft has been upset at their tablet attempts with Android. Now PC makers have a few years before Microsoft gets the lead in the PC consumer market. Some are trying to reinvent themselves like Dell who wants to focus on the business segment.

The missing part for Microsoft is Distribution and Retail. Will Microsoft open some flagship store or some corner within existing stores like Darty, Fnac, Saturn, Currys, or PC world ? I bet they will.

Vertical integration seems to be the unstoppable business model, every IT giant is running after including Google and Amazon. Until someone finds a smart and disruptive new business model.

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iPad Mini : The day Apple has become boring

I won’t comment the pros and cons of the iPad Mini. What struck me is that it isn’t an innovation and Apple isn’t the first mover in this category. The 7’’ tablet segment is already occupied by the Nook, the Kindle Fire, Galaxy Tab 2 7, Nexus 7, etc.

They will for sure sell loads of this iPad mini as they did for the iPad. But the introduction of the iPad mini is just a non event as it is a follower move. I think Apple has lost his mojo and starts to be as boring as a standard manufacturer.

The iPhone, a collateral damage of SIM only offers

Apple iPhone has lost 10% market share last quarter in France. iPhone’s share of the French market fell below 20 per cent. The reason is the success of SIM only offers from all the 4 operators.

With no subsidy an iPhone 4S 16GB at 629€ is very expensive and few people can spend so much in a mobile.

Apple has crushed the competitions the last years because consumers had to pay only 50€ for an iPhone with a contract. At the same time, other smartphones where at 20€ so for 30€ difference people used to go for the Apple iconic device. There was no space for devices between a ZTE competitively priced device pushed by operator at 1€ and an iPhone at 50€.

Now with the iPhone so expensive for SIM only users, there is some room again for 400€ smartphones. Nokia Lumia 800 is at 449€ in France and it should be able to breathe and find some audience.

As SIM Only offers are available on the Internet only, IT retailers are starting to offer credit for the acquisition of a smartphone.

Darty ad

Instead of getting involved in endless lawsuit with Apple, other smartphone manufacturers should go to the European Commission to have mobile subsidy by operators banned in Europe.

Mobile subsidies are already illegal in Belgium .Banning subsidies would be the best way to confine Apple in the very high segment and get some space for their products. In that case Apple may have the same market share it has in the PC area: around 6% and not its current 20%.

What to expect from Apple iTV?

What can we expect from the coming Apple iTV set coming before this summer according to the persisting rumors.
The secret is well kept and so far nobody knows the screen size, features or price of the TV set.

Apple iTV - TV set concept

But can assume the 5 or 6 areas where Apple will try to offer an outstanding user experience. I believe these areas will be :

  • Gesture or voice based control
  • Seamless and easy integration with other Apple devices to stream content
  • Video call service based on face time
  • Video on Demand and Music through iTunes
  • Browsing
  • Applications based on objective-C
  • And Games

The last one is the tricky one. Will Apple TV set have enough power to run more than casual games? I think so as it will be a key differentiator and one of the justification of the price gap with other brands.

Smart TV in the deception zone of the Hype curve

Smart TVs were a big hype 18 months ago and were to replace every internet device in the home and drive millions of consumers away from their favorite TV channels to the magic world of interactivity.

Even though TV manufacturers have had always a very careful speech, some enthusiastic futurologists were predicting a big tsunami that will smash every other way to consume the Internet in the home.

Technology Hype Cycle

Technology Hype Cycle

Since that time, Google have failed to launch its first version of Google TV. The market is still waiting for the first Apple TV set due in June 2012 apparently. Rumors are growing…

The first Content Service Providers are a bit disappointed by the Return On Investment of their TV first services.

I think we are the deception zone of the Hype Curve, but the connected TV is there and there for a long time. It will not replace Tablets or PC but TV connected TV services will find their audience.

The main showstoppers today to the growth Smart TV are

1. Distribution

Shops don’t have internet connectivity to show off properly connected TV services. Sales assistants need to be trained properly

2. Monetization

  • Monetization of Smart TV services are an issue as there is little or no advertising method.
  • There is no payment mean natively integrated in the TV set that would enable a 2 click purchase (1 click and a PIN code confirmation).

The latest figures of smart TVs that have been really connected to the Internet are growing to an impressive 50% from 20% 6 month ago.  For sure connected TV will find their place in our digital lives. It will just take a bit longer than expected.