Thought Starters

Content that has caught my eye recently, which includes coverage of Amazon, Apple Pay, Facebook’s financial results, the music industry, income inequality among other things.

Vanity Fair has a feature article focusing on the increasingly fraught relationship between Amazon and the publishing industry. The piece charts how Amazon was originally seen as a counterbalance to to the growing power of Borders and Barnes & Noble, but over time it was Amazon that upset the relatively cosy relationships within the publishing industry (albeit at the expense of the consumer).

Whilst Amazon’s hold on the publishing industry appears relatively secure, the company has received a bit of stick recently for its performance in other market segments (most notably the Fire Phone) .

Bezos’ sterling reputation kept few questioning these initiatives, but in recent months that has started to change. A number of recent initiatives seem to be costing more money while not necessarily showing signs of sure success.

Benedict Evans made a strong case a couple of months ago for Amazon’s approach of  putting off profits as it invested in new market segments, but  Amazon needs to have more winners if this strategy is to work over the long term.

Ben Thompson takes a valuable look at how Apple has carved out a strong strategic position in the payments space by creating a situation of mutual advantage for its customers, credit card networks, banks, and to a lesser degree, merchants:

Apple Pay

Technalysis has forecasted healthy growth in the wearable computing category. Whether its enough to provide a lifeline to Samsung and other besieged smartphone manufacturers remains to be seen:

Wearables

Facebook’s revenue results reported by Benedict Evans point to the company doing a good job of adapting to consumers’ increasing time on their smartphone:

Facebook Mobile

What Facebook is doing a less good of is reducing its reliance on the North American market as reported in Inside Facebook, despite the continued growth of internet and mobile internet penetration in the rest of the World:

Facebook Revenue by Region

Whilst Western consumers are relishing increasing mobile internet speeds, it’s a rather different story for many consumers in the developing world where the cost of data makes internet access a relative luxury. Ben Bajarin talks about the ‘light web’ in which mobile experiences are carefully optimised to reduce the data usage for consumers wary of:

Mobile Internet Developing World

Much has been made  of the move by brands from an era of disruption to engagement, enabled by broadening array of interactive digital channels. Given these changes, its valuable to read Tom Doctoroff’s spirited defence of more traditional marketing agencies.

An interesting counterpoint to Doctoroff’s  view is Faris who points to the lack of interactivity in the majority of digital advertising, pointing to Honda’s The Other Side campaign as where things should be heading:

You get the idea. I guess I just miss ideas that work on the web, where the user is in control of the interaction. Where everyone gets an interactive experience.

Bradley Leimar takes a look at how banks will look to improve their offering using enhanced digital channels that go beyond simply putting a customer interface online:

We are moving away from a banking relationship defined by the goal of being a customer’s primary financial institution to one where we focus on becoming their primary financial application. It’s no longer about wallet share. It’s about app-driven mindshare – as our customers reach into their pockets for their mobile device or use their glasses or other form of wearable technology and think about their financial relationship choices – before, during, and after a financial moment of truth.

The music industry is adjusting from an ownership to a streaming model. Mark Mulligan argues that the music industry needs to drop the pricing of streaming music if it wants to maximise overall revenues:

Music Revenue

Felix Salmon on the other hand focuses his attention on the value of having three dominant record labels in facilitating streaming music services, arguing that an oligopoly in this case serves the interests of consumers.

We take globalisation for granted in the increasingly interconnected world we live in. Given this, it’s interesting to see analysis from Pankaj Ghemawat and Steven Altman which compares how globalised information, trade, people and capital is over the last 10 years:

Globalisation

Thomas Piketty’s Capital in the Twenty-First Century has sparked renewed interest in the issue of income inequality. Oxfam has looked into correlations between income and inequality and health outcomes pointing to some of the more tangible negative outcomes associated with income disparities within countries:

Inequality

 

Sorapop Kiatpongsan and Michael Norton’s research points to the vast gap between the income of CEOs and their unskilled workers across different countries, with the wage gap being much larger than most people saw as being appropriate:

Wage Gap

The featured image is 25% Black by Elian in Cordoba, Argentina and found on eksoystem.

Thought Starters

A mixed collection of materials looking at societal trends and the impact of technology on the way we live.

The European Commission has released the Sixth Report on Economic, Social and Territorial Cohesion. The title might not roll off the tongue but it provides a broad range of European statistics including health outcomes, the environment, human development, demographics, crime, the economy and education among other things:

Change in Population The Economist has created an index of where the best country to be born is by looking at a range of quality of life indicators. Care to move to Switzerland?

Where to be born

Retale have pulled together an interactive infographic using U.S. Bureau of Labor Statistics data to providers users with the opportunity to see how the activities of different audiences vary by demographic in the US:

Time Survey

JWTIntelligence has pulled together a report looking at changing family structures in the US. Among the trends highlighted is the evolving nature of the nuclear family, growth in solo living, multigenerational and silver families and the rise of friends as part of family type networks:

The Internet of Things has been getting a lot of attention from the technology sector. The Wall Street Journal looks to pour some cold water on things by pointing out the failure to institute common standards as providing devices interacting that aren’t from the same brand:

Without a common software standard, devices will remain locked into what the German industry experts calls “island solutions”– brands that have a portfolio of products that can talk with each other but won’t be compatible with other brands.

The number of apps available to smartphone and tablet consumers keeps on expanding, but the average consumer only users four according to research from Nielsen:

App Usage

The GlobalWebIndex continues to infographics providing a window into global consumers use of digital.  Recent releases have looked at where WhatsApp, Vine and Pinterest are making an impact:

WhatsApp

Zeynep Tufekci gives an impassioned defence of Twitter in its current form, pointing to the advantages of surfacing content by the human flock rather than an algorithm:

I honestly doubt that there is an algorithm in the world that can reliably surface such unexpected content, so well. An algorithm can perhaps surface guaranteed content, but it cannot surface unexpected, diverse and sometimes weird content exactly because of how algorithms work: they know what they already know. Yet, there is a vast amount of judgement and knowledge that is in the heads of Twitter users that the algorithm will inevitably flatten as it works from the data it has: past user behavior and metrics.

As Twitter broadens its offering to partners by integrating ecommerce functionality with consumers’ Twitter stream with the  trialling of a Buy now button. Whilst the trial is relatively limited in scope at this stage, we can presumably expect to see it rolling out more widely soon:

Research from AOL Platforms points to Youtube as having an important role in introducing products and closing the sale when compared to other social media:

Purchase Funnel

Facebook’s quarterly earning figures released in July pointed to the company as doing a good job of growing its revenues. Analysis from Neustar suggests this position may well continue given that Facebook’s network offering is proving a leader in terms of reach efficiency and average cost although its position is trumped by ad exchanges in the quality of its audience:

Cost Index Online Advertising

Facebook is looking to be more sensitive to consumers’ privacy concerns with the  launch of its  Privacy Checkup to help users better manage their privacy settings:

A report from PageFair points to a 69% increase in the number of consumers using adblock software in the US, raising concerns that online media may be increasingly threatened by declining ad revenues.

Adobe recently released its U.S. Mobile Benchmark Report providing a range of charts shedding light on how users and marketers are taking advantage of mobile. Among the interesting statistics is the use of GPS location data and use of beacon technology:

Location Data

Another interesting data point to emerge from the Adobe presentation is the flatlining of tablet’s share of page views. This provides further ammunition to some commentators’ arguments that tablets are getting squeezed between phablets (smartphones with screen size between 5.01 to 6.9 inches diagonally) and PCs:

Tablet vs Mobile Usage

The growing importance of phablets is given further credence by Flurry’s recently released figures which point to growing market share and TECHnalysis Research’s forecast for forecasted sales in the coming years:

Unit Forecast by Sales notebooks desktops tablets smartphones phablets
Unit Forecast by Sales notebooks desktops tablets smartphones phablets

Apple’s launch of the iPhone 6 and 6 Plus is likely to provide a boost to its smartphone marketshare.  Samsung on the other hand is likely to find itself increasingly squeezed between Apple above and a growing array of Chinese based manufacturers (Xiaomi, Lenovo, Huawei, Coolpad etc) at the mid to lower end:

Smartphone Market Share

Amazon’s Fire Phone was released with much fanfare in late July but the fact that it’s now dropped the price by $200 suggests it hasn’t been a winner among consumers.

Putting this all in perspective is Benedict Evans’ valuable blog post looking at Amazon’s failure to post a substantial profit despite its large revenues:

Amazon Revenue vs Income

Evans points to Amazon’s willingness to reinvest any potential profits back into the business. Some of these investments aren’t going to be an immediate success, but others such as the Kindle have enabled Amazon to gain a market leading position:

Amazon Profit Model

Reddit gets strongly criticised by T.C. Sottek following its failure to take action on the release of nude celebrity photos:

Reddit, he wrote, is “not just a company running a website where one can post links and discuss them, but the government of a new type of community.” So, then, what type of government is Reddit? It’s the kind any reasonable person would want to overthrow.

Tim Harford looks at how we can improve our forecasting, pointing to better understanding probabilistic reasoning, working collaboratively and being open minded as key contributors:

Masha Gessen looks at how the Russian population is being squeezed between declining birth rates and falling mortality rates, pointing towards a loss of hope as a key contributor:

If this is true—if Russians are dying for lack of hope, as they seem to be—then the question that is still looking for its researcher is, Why haven’t Russians experienced hope in the last quarter century? Or, more precisely in light of the grim continuity of Russian death, What happened to Russians over the course of the Soviet century that has rendered them incapable of hope?

The featured image at the top of the page is a PARKER by GoddoG and DelwooD in Biarritz and found on GoddoG’s Flickr stream.

THOUGHT STARTERS: CONTENT THAT HAS GOT ME THINKING 20

With the recent Google I/O developers conference, there’s been no shortage of coverage of the mobile sector which is reflected in this blog posting. You will also find a critical look at the sharing economy, shopping malls, teens use of social media and the use of longform advertising among other matters.

Figures from PWC forecast that the UK economy will retain its strength over the next fifteen years  driven by a less rapidly ageing population and strong labour force participation when compared to its European counterparts.

April Siese takes a critical look at the sharing economy, pointing out that the benefits are likely to be unequally distributed:

Sharing-economy supporters see services as ways to disrupt the currently ineffective system, though their attempts are firmly targeted at a demographic with a disposable income—and with little regard for the underserved communities that they’re affecting.

James Greiff looks at the decline of the shopping mall in the US, pointing to the growth of ecommerce and social media’s role as social media as meeting place.Missing Mallrats

Monitise have pulled together a report looking at the growing use of mobile technologies and associated financial services globally, with a particular focus  on UK and USA. Mobile payments globally

Digital identity is growing in importance as consumers look to means of connecting a growing array of digital devices and services. In the UK the Government Digital Service is pushing forward with its Identity Assurance programme using third parties to authenticate consumers’ identity. Bob O’Donnell profiles current attempts in a sector that is still only in its early stages of development.

As more of our reading shifts to smartphones, Kevin Roose points to the book as becoming increasingly marginalised as we move away from the printed words and ereaders:

The silver lining of the app-ification of books is that it has increased the potential audience for e-books. Now, everyone with a smartphone has the ability to download and read any e-book from any publisher with a few taps. The bad news is that, if current trends hold, fewer and fewer people will have a device that is strictly for reading. Books are becoming just another app, and the publishing industry’s glorious e-reader future seems to be fading from view.

Bob Lefsetz looks to the future of the music industry as it continues its inexorable move from ownership to streaming.

Kantar have a web resource which allows users to assess changes in smartphone OS market share over time in key markets including UK, France, Germany, USA, China and Japan. BGR reports on collapsing market share on the part of Windows Phone which is looking less and less like a contender in the smartphone marketplace.

Smartphone OS Marketshare

Providing a contrasting approach is Benedict Evans who looks at the marketshare of different mobile operating systems across different market types as well as comparing mobile app revenues from iOS and Android.

Mobile Marketshare

Ben Bajarin contrasts the different approaches of Apple and Google in the smartphone marketplace.

To put it simply, Google’s strategy is dumb glass + smart cloud. Apple’s strategy is smart glass + deep cloud integration/synchronization. This is the clear departure in hardware philosophy the two companies will take. And it will dictate the types of customers each ecosystem has.

In a related piece, Benedict Evans takes a critical look at Amazon and Facebook’s attempts to take a more involved role in the mobile ecosystem.

Samsung is likely to feel the financial squeeze as it faces increasing competition from emerging Android handset manufacturers and an inability to deliver differentiation in other parts of the mobile value chain according to Jan Dawson.

The launch of the Amazon Fire Phone has left a few analysts intrigued or puzzled, particularly given the price point. Michael Mace portrays the move as a market experiment rather than a concerted effort to gain market share within the smartphone sector.

Facebook still dominates among US teenagers despite talk of an exodus as reported in eMarketer and Forrester.

teensocialscatter

Contently talking about short films/longform advertising as a better engage with consumers  who are spending more time with online video and provide opportunities for content that entertains rather than simply disrupts.

The featured image is a piece by Momo for the  Bien Urbain festival in Besançon and was photographed by Laure Saint Hillier & David Demougeot for Ekosystem.

The featured image is a piece by Momo for the  Bien Urbain festival in Besançon and was photographed by Laure Saint Hillier & David Demougeot for Ekosystem.