Watch this all the way through. This was apparently an internal report for Penguin Publishing, a group I now figure might survive if they are thinking this way instead of lamenting the complexities of the iPad.
Brilliance.
Posts Tagged ‘disruption’
Apple’s true killer app: disruptive business models
Tuesday, 05 January 2010 23:26
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Great analysis from Paul Denlinger at The China Vortex about the upcoming Apple Tablet, and what its real impact will be on the market.
As Denlinger points out, most people assume that the secret of Apple’s success is their reliably sexy user interface. Sure, that’s a critical factor in its dominance of the premium computing market – the stuff works and is beautiful. What makes Apple so influential as a company is its ability to change business models, making everyone else a follower.
Sure, iPod was a great little device, but others had portable MP3 devices, however ugly. It was iTunes that got people thinking of MP3s as legitimate purchases instead of illicit stolen files. The music publishing world is still reeling, and Apple is the number one music retailer in the world. The iPhone is not only cool, it introduced the App Store that allows each phone to be user-customized, with prices set by the free market. They don’t yet own the market, but the word “app” is now an accepted concept in the business lexicon. Sexy brings you to the dance, and wonky, quantifiable, innovatively-engineered business models take you home.
And so what awaits the Tablet?
Now, in order to make the Apple Tablet a real success, it has to have certain functionality which will not cannibalize iPhone and Mac notebook sales. This is why it’s point of attack will have to be on books, magazines and the publishing industry. It will offer developer tools for Apple’s digital publishing solution. Already there is talk about Apple’s new SDK for this new platform.
My prediction is that this new SDK will make it apparent why Apple has not been friendly about offering Adobe’s Flash access to the iPhone, since Apple’s solution will offer much of the same feature set as Adobe Flash, but will be more tightly bundled in on the front and back ends to the device and to the store. (Steve Jobs likes closed ecosystems where he controls the whole experience.) Tough times for Adobe’s Flash and Microsoft’s Silverlight: all dressed up and nowhere to go.
Speaking as an author, the industry is ripe – no, begging – for disruption. And as usual, it’s the Googles and Apples who notice first.
This will be fun to watch.
Music’s digital decade
Monday, 04 January 2010 19:37
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Courtesy of Forrester Research, a great graphic describing the innovation of the music industry, from 25 billion euros in 2000 down to 10 billion euros today.
Competitive Futures has been using the music industry as the poster child for strategic disruption since the beginning of the decade. I remember discussions with music executives around the turn of the millennium. Mostly, they were caught in the “moral” indignation of “kids” “stealing” music when they should be paying $18 (closer to $30 in Europe!) for static music media.
My favorite discussion was with an industry exec who attempted to sell me on the notion that “Compared with going to the movies, which is $8, a CD is a great investment because you can play it again and again. It probably should be $100 or something.” Nice. Try.
The conclusion: just because you don’t want to face reality doesn’t make it have less impact.
2009: Collective disaster / 2010: Individual success
Sunday, 03 January 2010 16:59
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Psychologically, many are glad to have 2009 behind us. It is difficult for people to work in conditions where so much seems out of control, ready to collapse at any moment. The moment seems to have passed. The one facet of 2009 that was clear was the willingness, often at great long-term cost, for government policymakers to keep the status quo with our major institutions. For 2010 – 2020, we can use this political reality, and make more solid plans.
This is not to say that we think that everything is back to “normal.” Have a look at our strategic outlook last year on the major drivers of disruption; none of them are fundamentally different.
Disruption will continue to be the theme of 2010 -2020; those megatrends still hold. Still, the likely stability of 2010 is something you can use.
We have one lesson for clients about studying the future: Just because there is a crisis doesn’t make it a crisis for everyone. When you make solid strategies, disruption can become massive opportunity. In the past decade, the music industry has melted down. It is not a catastrophe for Apple, who launched billion-dollar devices that changed the landscape of media, and then followed up by becoming the world’s largest music retailer. The oil crisis of the 1970s took Shell to the top of the petrochemical industry. Look ahead, think differently, make bold decisions and catastrophe for some can mean success for you.
Perhaps last year many were attempting to avoid the collective catastrophe that comes when all of our institutions catch on fire at the same time. This year, choose your own success.
Investing in Car 1.0 on the eve of Car 2.0
Thursday, 11 December 2008 11:26
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The new Tom Friedman article is essential for its analysis of the coming shift in business models. Like every other human with a functioning brain stem, the Detroit Bailout stinks to Friedman:
…America’s bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay. It will be remembered as pouring billions of dollars into the CD music business on the eve of the birth of the iPod and iTunes. It will be remembered as pouring billions of dollars into a book-store chain on the eve of the birth of Amazon.com and the Kindle. It will be remembered as pouring billions of dollars into improving typewriters on the eve of the birth of the PC and the Internet.
And I did not know this about gas mileage 100 years ago:
Do not expect this innovation to come out of Detroit. Remember, in 1908, the Ford Model-T got better mileage – 25 miles per gallon – than many Ford, GM and Chrysler models made in 2008. But don’t be surprised when it comes out of somewhere else. It can be done. It will be done.
And it will happen to more than just this industry.