Friday, September 30, 2011

Why Kindle Fire will torch everyone except Apple

Amazon is smart.

Yes, they're late to the tablet market, but they used that time to create a strategically superior product to the tablets from Motorola, HP, Dell, and the other iPad wannabes.

Unlike those brands, who looked at the market leader and asked, "how can we give iPad users more for a little less?" Amazon asked, "How can we give others exactly what they need at a price that radically realigns the category?"

At $199, the Kindle Fire is 60% cheaper than the least expensive iPad. Since most tablet usage is at home, it has only WiFi, gives you access to Amazon's huge catalogue of books, music, magazines and video, and offers a limited suite of the most popular Apps.

It only has 8 gigabytes of memory, so storage is limited, but that's part of the strategy to make users reliant on the Amazon cloud service, generating significant amounts of annuity revenue through purchase and storage of Amazon's content.

This is a classic disruption strategy. While everyone else is battling for the same customers at the top end of the category, Amazon found a way to open the market to a huge swath of people for whom a $500 tablet just doesn't make sense.

Very few people who "need" an iPad will trade down to get one of these. But those tablets stuck in the middle will see their volumes fall to a product that's just good enough but a whole lot cheaper. The fact that Amazon is being launched with an integrated multimedia ecosystem guarantees it.

I hope Amazon has their production ramped up because they'll sell every one they can make this holiday season.

Wednesday, September 28, 2011


Knowing history is important. What's been done can offer lessons for the future. But often history handcuffs a company and its future.

Every business is on a path and it's hard not to look back at milestones, strategies, and tactics that worked just a few years ago. As they say in the brokerage business, however, past performance is not a guarantee of future success.

Kodak's success selling film in the '70s, doesn't necessarily make it relevant in the world of digital photography.

Miller and Bud's historic strength in distribution doesn't help it in a world that's looking for better beer.

Miles of paper, barrels of ink, and presses as big as a battleship won't help the New York Times distribute information in a world that wants its news on a smartphone.

Every once in a while, every business should press the reset button. If for nothing else than to see what's happening in the world around them and determine if where they've been has any relevance to where the world is going.

Tuesday, September 27, 2011

Preaching isn't marketing

If you want to get people to change their behavior, don't tell them they're stupid, ignorant, fat and going to die, as the Physicians Committee for Responsible Medicine is planning to do.

The objective of this billboard is to convince the people of Green Bay, Wisconsin (it's scheduled to be installed on the main route to Lambeau Field) to reduce their cheese consumption.

The problem is, the head of PCRM thinks Wisconsinites are ignorant as evidenced by this statement: "People have really no idea that cheese can cause what makes them fat and what makes their children fat," said Dr. Neal Barnard.

We know. Cheese, like just about every other food, when eaten to excess can make us fat. Some of us choose to indulge in moderation. Others not so much. But you're not going to alter that behavior by vilifying something they love, something so fundamental to the culture, something so damn delicious.

"We know what's best for you" never works in cause marketing. Especially when there's little truth behind the message.