Amazon, Apple, Google Have Different Business Strategies, No Matter What They Sell

Amazon, Apple and Google sell all sorts of things, and likely will sell more types of things in the future. But even when all three firms compete directly, they have different business models. Apple makes its money on hardware, Google on advertising, Amazon on lifetime value of a customer. 


To be sure, Amazon sells lots of stuff, ranging from hard goods and electronics to books and video content. But Amazon's view of pricing always starts with "lifetime value of a customer." That frightens many observers, who worry about Amazon's profit margins. 


But Amazon wants to maximize the lifetime value of each of its customers. Apple wants to maximize the profit margin on each device it sells, Google preferring to build advertising volume and revenues. 


So Amazon might consider doing lot of things neither Apple nor Google would attempt. 

55% of Twitter Usage is on a Mobile Device

Mobile use of Twitter is growing about 40 percent a quarter, the company says. For any application or service provider that believes "mobile first" is a fundamental matter of business strategy, that's important. 

Facebook May Not be a Bank, But App is Going to Help Facebook Users Conduct Banking Transactions

Facebook is working with Australia's Commonwealth Bank to create an app that will allow Facebook users who are bank customers to make payments to third parties as well as Facebook friends using Facebook, Fortune reports. 


Engagement and traffic, not direct revenue, is Facebook's expectation for how the app will create value. To the extent that users and their connections, preferences and values are Facebook's "product," the banking capability is expected to help Facebook monetize those relationships and values in an advertising or marketing context. 

Tuenti, Telefonica’s Social Network, Launches Globally

Few tier-one global telcos have taken the over the top application opportunity as seriously as  Telefónica.  


Telefónica Digital believes it can develop significant businesses beyond  connectivity services. The unit expects to drive annual revenues of approximately €5 billion for Telefónica by 2015 with an annual revenue growth rate of 20 percent revenue growth, 


Among those efforts is Telefónica's Tuenti, a Spanish social network with 13 million users, is launching a global beta version, including a web application (www.tuenti.com), a web app optimized for mobile (m.tuenti.com), and native applications for Android and BlackBerry. Applications for iPhone and Windows Phone will be available in the coming weeks.

 

This marks the beginning of Tuenti’s international expansion, now available in six new languages (German, French, Italian, Dutch, Slovak, and Czech) in addition to the already existing Spanish, English, Portuguese, Catalan, Basque, and Galician versions. 

Telefonica’s footprint spans both mobile and fixed operations across Europe and Latin America, covering 25 countries and 309 million users,

How Big is the Unified Communications, Collaboration Market?

In 2011, the worldwide net or "true unified communications market was $2.7 billion, up 20 percent from 2010, according to Blair Pleasant, COMMfusion LLC president. Pleasant is one of the more-careful analysts where it comes to unified communications and collaboration markets. 


The problem is that "UC" includes lots of capabilities that customers might buy simply as "point solutions" or stand-alone systems that are not fully "unified," as the term UC implies. 



The "Total UC-capable market," as Pleasant defines it, includes the total end-user revenues attributed to all of the UC components, including IM/presence, unified messaging, conferencing (not including end points), call control/IP PBX, and “other,” including softphones, business process integration software and APIs, she notes. 


That might add up to about $12.2 billion in 2011, up eight percent from 2010, growing to $20.8 billion in 2016, Pleasant says. 


"These numbers don’t necessarily represent the true UC market, however," says Pleasant. "If someone purchases an IP PBX and a conferencing/collaboration product, even if they’re from the same vendor, does this constitute a UC sale?"


"Not necessarily," she says. 


To be sure, UC is vitally important to service providers and others in some parts of the communications business. But in a global market that generates $2 trillion annually, that is a relatively small segment of the business, really. 


That is not to say it is unimportant to any number of interests in the ecosystem. It is to say the business is fragmented and a specialist niche, from a "total revenue" perspective. 



The component growing at the highest compound annual growth rate is conferencing and collaboration, growing at 50 percent CAGR, she says. 

Mobile Remote Payments Activity Doubles

Mobile payments, especially of the "remote payment" variety, have more than doubled over the last year, and are used by 33 percent of consumers surveyed by IDC Financial Insights. Of those consumers that had made a mobile payment, more than half used PayPal Mobile (56 percent), with Amazon Payments and Apple's iTunes service statistically tied at about 40 percent. 


For the most part, that activity was centered around purchases of virtual goods on a remote basis, especially digital downloads of apps and music. Still, IDC notes, more respondents reported buying physical goods with their phones than online services, digital goods, or virtual currency, IDC reports. 

What Would an Amazon Smart Phone Mean?

Amazon.com Inc. is testing a smart phone, the Wall Street Journal reports, though it isn't clear Amazon definitively has concluded to market such a device. If Amazon does decide to get into the smart phone business, which one might characterize as yet one more way Amazon is trying to create a massive installed base of content consumption devices, that move could come late in 2012 or early in 2013.


The ramifications could be significant, though it also has to be noted that would-be contenders in the tablet and smart phone markets stumble frequently enough that it isn't so clear what the impact might be. 


Aside from the obvious matter of greater competition in the mobile device market, any such move by Amazon would change strategic thinking at rival firms. It might go without saying that a robust content or app ecosystem now has become an important part of the value proposition for tablets and smart phones. 


An Amazon entry into the smart phone business would heighten that aspect of the competitive landscape. Where Google and Apple have been competing in both "apps" and content, Amazon would add a new potential niche of sorts for content-driven competition. 


In fact, that might be one of the more-important implications. Where mobile service providers have competed on the basis of value and price for a basket of features anchored by voice and text services, handset suppliers have competed on the basis of application richness.


Amazon conceivably could create yet another approach or segment of the market oriented around content consumption, with a heavy slant on books, magazines and printed content, rather than music or video. 


For Amazon, the fact the voice communications and messaging are available would be only a part of a value bundle anchored by content consumption.


For service providers, the bigger concern might be that any such Amazon move could prompt a response by Google or Apple, Facebook or some other entity that similarly might change the traditional mobile services context. What any of those competitors could do is redefine "what" mobile service "is," and what features are part of mobile service.