Saturday, 11 February 2012

What I've been reading this week

I’m firmly of the belief that participants in the TMT industry need to read widely in order to understand the present and future dynamics of the market. To that end, this post is a collection of the articles that have caught my eye.

This week – $50k the price of ideology, Airforce, NOAA dispense with RIM, Amazon beats up HMV and forces Indian retail consolidation while Netflix “destroys” TV

New business models

Fascinating – ideological hacking has replaced criminal hacking as #1. Also worth noting the rise of attacks originating in Asia. No corporate can overlook this threat to their externally facing web properties.

Although extorting $50k doesn’t seem particularly ideological. Slightly amusing that the torrent got malware infected within hours of being uploaded. No honour amongst thieves!

Bye bye RIM. Even government doesn’t think security is enough of a differentiator to choose Blackberry.

And in tablets, the Airforce doesn’t like Playbook, even though rather a lot of military equipment runs on the QNX operating system, which is important because...

...27Mn tablets shipped in Q4 2011, which is quite amazing seeing as the format has only been in existence for 2 years. Also incredible that iOS has retained the majority of market share, despite being only available on one device and at a high price point. Nothing will change in 2012 – Android just isn’t as good a user experience on tablets. Yet.

Amazon is annihilating HMV in media retail. HMV’s attempt to get into electronics at a time when that market is falling off a cliff in the high street seems typically misguided.

So is this the time for Google to go into retail? I’m not sure that the company has that in its DNA, even if it does start to launch more own brand products in tablets and TV

Singapore is an interesting microcosm – small and very rich. A nice place for Paypal to experiment with mobile retail using QR codes. Suspect we’ll see more of these pilots this year as it’s a simple way of creating AR experiences.

Groupon is a flash in the pan. That is all. It just isn’t differentiated and search gives consumers plenty of opportunity to find better deals.

Digital media

The average social gamer is 39 and 17% of the 100Mn or so players do so on Google+. I’d not have expected that. Mobile is a big issue that social networks have to cope with. At the moment there’s no compelling ad platform and revenues are drifting away. My other concern is the use of social aggregators on smartphone operating systems and applications like Flipboard. I predict a difficult year for social.

Zynga is trying to do a Rovio (and a Pixar) and license its brands for merchandising. Not sure that this will be a biggie. As the article points out, Zynga’s games are aimed at adults. Although they could change it...

Roku has been available in the US for years. It’s a reasonable product and cheap, but I can’t see them gaining much traction. Likewise YouView – a technology that solves no problem.

I’m sure Netflix do want to “destroy” traditional TV. They won’t do it in the UK though, because UK audiences like their content locally produced. It might do okay against Lovefilm, Blinkbox and Blockbuster (yes, they still exist), but not against linear TV.

New technology

Bandwidth capping is becoming more prevalent and online video streaming becoming more habitual, so I expect to see lots more of this kind of protocol-based solution to bandwidth constraints over the next few years

The strength of HSPA in Europe has meant that LTE networks has been used exclusively for mobile Internet dongles. No more, as Vodafone prepares to launch the first LTE mobile handset. UK consumers have at least another year to wait.

I think magnetic hard disks are done in the PC market. The floods have increased prices at a time when people need less storage in the box and SSDs offer much better performance, with greater longevity and lower power consumption.

Emerging markets

A week after Amazon launched in India, two of the incumbents announce a merger. My gut feeling is that the incumbents will have their work cut out, provided Amazon can get a handle on local market conditions. I’d expect them to go poaching some people from the incumbents over the next year. Important for Amazon to get this one right as margins get squeezed in developed markets.

Broadband in South Africa isn’t very fast and isn’t very well penetrated. But no surprise there. I’m sure this sort of story will continue to be used to justify why cellular is the way forward for African broadband. It isn’t, thanks to physics. In ZA, the solution will doubtless be to build out more fibre and to introduce more advanced DSL products, which have already demonstrated their potential to supply up to 100MBit/s connections.

Africa is such an exciting market for consumer goods. This FT article shows how the major brewers have moved into the continent – 1 in 4 of Diageo’s employees are now based there. With consumer goods come advertising opportunities. With advertising come media platforms, of which TV will doubtless lead the charge.

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