Going Vertical

I think Amazon is currently the coolest company in the world.

Now that's a judgement of mine that changes, depending on how well a company is executing a strategy, and how clear it is to others what it is that they're after. Ideally, a well executed strategy results in an industry game-changer, and catches others off guard...Nintendo's Wii or Apple's original iPhone and now Siri are amongst the best recent examples.

Amazon is doing this now and it's dead-clever.

They have for a while now been at one of the spectrum of the technology play that so many other companies are involved with. Only instead of building consumption devices (pods, pads, laptops, tv's etc), they've been building up content. What Amazon saw (I'm guessing) was that there was only one other player in the space that had content, and coincidentally, it was doing the best versus the others. That player of course being Apple.

If you think it's all about the design and elegance and white earbuds contributing to Apple's success, think again. They have the largest depth of Apps out there for their family of 220M+ iOS devices, at almost 470,000 unique offerings. That compares to the 270,000 unique offerings for the Android world - and they have a larger mobile share overall than Apple. My favourite company to pity - the nice folks at RIM with their Blackberries, thought it was about enterprise email far too long and stumble into the content breadth offering at 35,000 Apps. So, Apple has an advantageous long tail of Apps. Add to that the dominance of iTunes and it starts to become clear what powers the Apple steamroller. Great devices, deep and wide content and some degree of manufacturing efficiency mean the other tech players can't match them. Wonder who owns Samsung Galaxy Tabs..? Me too.

No doubt the good people at Amazon see this, and thought long and hard about how to emulate and take down these companies, to be leaders in the space. The key was content. Amazon happen to have a little bookstore of their own, and if books=music, then it starts to be about the consumption rate, not the technology interface if you're looking to monetize the space. Notably, it isn't about the devices, a fact few have noticed.

That was all fine and reflects the status quo until recently. In fact, Amazon weren't particularly noteworthy until recently. I'm guessing that was the plan. Some time back I bought a Kindle reading App across my own devices and it's better than anything native out there. Amazon was 'co-ompitioning'. Recently however, Amazon showed us what they are up to, and it's astounding. Firstly they unveiled the Kindle Fire which drops the price floor out of the tablet/reader market. Suddenly these are cheap and potentially commodities - beware HP, Sony, Apple etc. Secondly, Amazon announced they were willing to bypass publishers and BE the publisher and the retail storefront for authors. That extends and locks in interest into their content. Then, as icing to the cake, they announced they were willing to lend (as in free, as in library) books as well. Amazon's done a check-mate type move in content, and have marginalized the technical move so many others had focussed upon. They are device agnostic, and have scuttled the tablet market as a by-product of their strategy execution.

It's about the content, and if my crystal-ball on this is correct, this move singlehandedly changes the landscape in this space. Amazon has gone vertical, and unlike the attempts before this (Time Warner + AOL for example) they have a clear solution set for those in need of instant gratification.

In the future, we'll see cheap commodity tablets made in China, Apple as 'record' label for artists and Google moving to secure a major content play - I'm guessing a TV studio such as NBC Universal. All that will help others catch up to where Amazon is today..let's see what they do next.