The distinction between online commerce and physical retailing has been shrinking for some time. Mobile commerce apps and services provide one example of how that is playing out. But so is a warehouse strategy Amazon is undertaking.
Amazon expects that by building many more warehouses, in major metropolitan areas, it can cut delivery times from two days to one day. In some cases, some day, "same day delivery" might even be possible, though that seems largely out of reach for the moment.
The new warehouses will allow Amazon to cut as much as a day off its two-day shipping times, said Jeff Bezos, Amazon CEO. In at least some cases, Amazon might be able to offer same-day delivery, which would be a serious matter for other place-based retailers.
“We want fast delivery,” Jeff Bezos, Amazon CEO says. At a minimum, “we can work on making it the next day.”
Wednesday, September 12, 2012
Can Amazon Do Next-Day Delivery? Same Day? To How Many Customers?
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Tuesday, September 11, 2012
Economics Don't Work for Over-the-Top HBO
HBO has about 29 million consumers paying $7 to $8 a month, on average, to watch the channel on their cable, telco or satellite TV service. Full retail prices are higher, but there is heavy promotional activity, so average revenue per customer is lower than posted retail.
That often leads potential over the top customers to ask why HBO couldn't just offer a streaming, over the top service for perhaps $8 to $10 a month.
HBO Senior Vice President of Digital Platforms Alison Moore says the numbers don't work.
“Here’s the thing: it’s math,” Moore said about the possibility of splitting HBO into a standalone, over the top service.
HBO currently has about 29 million subscribers, and reportedly receives around $7 or $8 per subscriber per month. So could a separate, over the top service be sold for about the same price? That's the rub.
That figure doesn’t include all the other operating cost needed to support delivery of all those streams, including all the content delivery network and other costs, including sales, marketing, and support.
Going direct to online customers by pitching HBO GO over-the-top would mean losing the support of its cable, satellite, and IPTV distributors. So the bottom line really is that HBO would lose more from its main distributors than it can make from over the top, in all likelihood.
That often leads potential over the top customers to ask why HBO couldn't just offer a streaming, over the top service for perhaps $8 to $10 a month.
HBO Senior Vice President of Digital Platforms Alison Moore says the numbers don't work.
“Here’s the thing: it’s math,” Moore said about the possibility of splitting HBO into a standalone, over the top service.
HBO currently has about 29 million subscribers, and reportedly receives around $7 or $8 per subscriber per month. So could a separate, over the top service be sold for about the same price? That's the rub.
That figure doesn’t include all the other operating cost needed to support delivery of all those streams, including all the content delivery network and other costs, including sales, marketing, and support.
Going direct to online customers by pitching HBO GO over-the-top would mean losing the support of its cable, satellite, and IPTV distributors. So the bottom line really is that HBO would lose more from its main distributors than it can make from over the top, in all likelihood.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Economic Growth So Sluggish that the Apple iPhone 5 Could Boost GDP
![[image]](http://si.wsj.net/public/resources/images/MK-BX105_ECONPH_NS_20120910183916.jpg)
Sales of the new Apple iPhone could add between a quarter and a half of a percentage point to the annualized rate of economic growth in the fourth quarter, J.P. Morgan Chase & Co.'s chief U.S. economist Michael Feroli estimates. The forecasting firm Macroeconomic Advisers reduced its forecasts for economic growth to a 1.5 percent annual rate in the third-quarter and 1.4 percent in the fourth quarter.
So it is that a single smart phone going on sale for the first time can move the needle.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Europe Communications Gear Markets are Global Weak Spot
If you have been following 2012 communications service provider sales and revenue, you know it has not been a good year. That also is true of overall information technology sales.
Measured in local currencies to eliminate currency fluctuations, 2012 IT product growth will be 3.6 percent, lower than Forrester Research's January 2012 prediction of 5.3 percent.
Slower economic growth in the United States, Europe, China, and India, is the reason for the slower growth, says Forrester Research
But Forrester Research also points out that the slowdown is concentrated in Europe, and notably, and one technology product category: communications equipment.
In local currency terms, the tech markets of the United States and Asia Pacific will grow by four percent to five percent, while emerging markets in Latin America and Eastern Europe, Middle East, and Africa will expand by over eight percent.
The weak spot will be Western and Central Europe, where the tech market will shrink by 2.5 percent. Software, IT consulting and systems integration services, and IT outsourcing will grow by four percent to five percent or more, and computer equipment by almost three percent.
But communications equipment purchases will decline by almost one percent.
Measured in local currencies to eliminate currency fluctuations, 2012 IT product growth will be 3.6 percent, lower than Forrester Research's January 2012 prediction of 5.3 percent.
Slower economic growth in the United States, Europe, China, and India, is the reason for the slower growth, says Forrester Research
But Forrester Research also points out that the slowdown is concentrated in Europe, and notably, and one technology product category: communications equipment.
In local currency terms, the tech markets of the United States and Asia Pacific will grow by four percent to five percent, while emerging markets in Latin America and Eastern Europe, Middle East, and Africa will expand by over eight percent.
The weak spot will be Western and Central Europe, where the tech market will shrink by 2.5 percent. Software, IT consulting and systems integration services, and IT outsourcing will grow by four percent to five percent or more, and computer equipment by almost three percent.
But communications equipment purchases will decline by almost one percent.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
JP Morgan Raises Tablet Forecast, Lowers PC Forecast
JP Morgan has raised its forecast of tablet sales and revenue, while lowering sales and revenue forecasts for PCs.
The revised 2012 tablet revenue estimate is $57.7 billion, where it was $52.8 billion previously. The revised tablet unit estimate is 118.5 million, compared to 106.8 million previously.
The implied 2012 growth rates of revenue and unit estimates are 50.4 percent and 67.5 percent, versus 40.5 percent and 53.5 percent previously.
JP Morgan also expects increasing pressures on pricing as tablet vendors test price elasticity. So JP Morgan also has revised its 2012 tablet average selling price to $487, down from the $495 previously expected. And JP Morgan admits the ASP reduction "may not be conservative enough," implying a belief that ASPs could drop more than that.
None of those revisions will come as much of a surprise. Tablets are the new "hot" device in the consumer electronics business. Moreover, tablets are well suited to the growing "main" function of a digital appliance, namely content consumption.
In past years, the demand for content consumption was clearest in the case of MP3 players. These days, the primacy of other forms of content consumption, which had been only latent when most people consumed such content on PCs, now increasingly is visible.
As it turns out, for many people, the lead applications for an Internet-connected device revolve around content consumption, not content creation, as was the case for PCs.
So do tablets "replace" PCs? Yes and no. Tablets are not substitutes for PCs where it comes to many forms of content creation. But tablets are useful and viable substitutes for the consumption related functions of a computing device connected to the Internet.
The revised 2012 tablet revenue estimate is $57.7 billion, where it was $52.8 billion previously. The revised tablet unit estimate is 118.5 million, compared to 106.8 million previously.
The implied 2012 growth rates of revenue and unit estimates are 50.4 percent and 67.5 percent, versus 40.5 percent and 53.5 percent previously.
JP Morgan also expects increasing pressures on pricing as tablet vendors test price elasticity. So JP Morgan also has revised its 2012 tablet average selling price to $487, down from the $495 previously expected. And JP Morgan admits the ASP reduction "may not be conservative enough," implying a belief that ASPs could drop more than that.
None of those revisions will come as much of a surprise. Tablets are the new "hot" device in the consumer electronics business. Moreover, tablets are well suited to the growing "main" function of a digital appliance, namely content consumption.
In past years, the demand for content consumption was clearest in the case of MP3 players. These days, the primacy of other forms of content consumption, which had been only latent when most people consumed such content on PCs, now increasingly is visible.
As it turns out, for many people, the lead applications for an Internet-connected device revolve around content consumption, not content creation, as was the case for PCs.
So do tablets "replace" PCs? Yes and no. Tablets are not substitutes for PCs where it comes to many forms of content creation. But tablets are useful and viable substitutes for the consumption related functions of a computing device connected to the Internet.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
89% of Mobile App Store Downloads are "Free"
Once upon a time, many thought mobile app stores would create a huge app sales business. It hasn't turned out that way.
Free apps will account for 89 percent of total downloads in 2012, according to Gartner. Worldwide mobile app store downloads will surpass 45.6 billion in 2012, with free downloads accounting for 40.1 billion, and paid-for downloads totaling five billion.
In-app purchases, on the other hand, will drive 41 percent of app revenue in 2016. Gartner expects the number of downloads featuring in-app purchase will increase from 5 percent of total downloads in 2011 to 30 percent in 2016, and its contribution to the store revenue will increase from 10 to 41 percent in the same period.
"In terms of the apps that consumers are buying, 90 percent of the paid-for downloads cost less than $3 each," said Sandy Shen, Gartner research director. "Apps between 99 cents and $2.99 will account for 87.5 percent of paid-for downloads in 2012, and 96 percent by 2016."
Gartner expects Apple's App Store to have more than 21 billion downloads in 2012, which is an increase of 74 percent over 2011.
Free apps will account for 89 percent of total downloads in 2012, according to Gartner. Worldwide mobile app store downloads will surpass 45.6 billion in 2012, with free downloads accounting for 40.1 billion, and paid-for downloads totaling five billion.
In-app purchases, on the other hand, will drive 41 percent of app revenue in 2016. Gartner expects the number of downloads featuring in-app purchase will increase from 5 percent of total downloads in 2011 to 30 percent in 2016, and its contribution to the store revenue will increase from 10 to 41 percent in the same period.
"In terms of the apps that consumers are buying, 90 percent of the paid-for downloads cost less than $3 each," said Sandy Shen, Gartner research director. "Apps between 99 cents and $2.99 will account for 87.5 percent of paid-for downloads in 2012, and 96 percent by 2016."
Gartner expects Apple's App Store to have more than 21 billion downloads in 2012, which is an increase of 74 percent over 2011.
Global Mobile App Store Downloads, 2010-2016 (Millions)
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |
Free Downloads | 22,044 | 40,599 | 73,280 | 119,842 | 188,946 | 287,933 |
Paid-for Downloads | 2,893 | 5,018 | 8,142 | 11,853 | 16,430 | 21,672 |
Total Downloads | 24,936 | 45,617 | 81,422 | 131,695 | 205,376 | 309,606 |
Free Downloads % | 88.4% | 89.0% | 90.0% | 91.0% | 92.0% | 93.0% |
Source: Gartner (September 2012)
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
74% of U.S. Mobile Users 25 to 34 Have Smart Phones
U.S. smart phone penetration continued to grow in July 2012, with 55.5 percent of mobile subscribers in the U.S. now owning smartphones, according to Nielsen. This is a significant increase compared to July 2011 when only 41 percent of mobile subscribers owned smartphones.
Overall, young adults are leading the growth in smart phone ownership in the U.S., with 74 percent of 25-34 year olds now owning smart phones smart phones, up from 59 percent in July 2011.
Teenagers between 13 and 17 years old showed the most dramatic increases in smart phone adoption, with the majority of American teens (58 percent) owning a smart phone, compared to roughly a third (36 percent) of teens saying they owned a smart phone just a year ago.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Subscribe to:
Posts (Atom)
-
We have all repeatedly seen comparisons of equity value of hyperscale app providers compared to the value of connectivity providers, which s...
-
It really is surprising how often a Pareto distribution--the “80/20 rule--appears in business life, or in life, generally. Basically, the...
-
One recurring issue with forecasts of multi-access edge computing is that it is easier to make predictions about cost than revenue and infra...
