Both Apple and Amazon have reported severe drops in profits.
Which makes me somewhat suspicious. High flyers who suddenly have crappy quarters, just makes me wonder how high the highs and how low the lows. In other words, did they -- for strategic reasons -- pile their profits in one quarter, and pile their loses in another?
But it also got me to thinking how, up until now, all I've been thinking about is how Amazon's Kindle is affecting bookstores. But maybe I should have been considering how the Kindle might be affecting what, up until recently, was Amazon's own core business:
You know, what was once their main reason for being.
Much like Barnes and Noble making their own business model obsolete by selling the Nook.
There is no guarantee, it seems to me, that these new high tech businesses will make them as much money as their old businesses did.
After all, the same dynamics that save them money on the digital, also make it possible for competitors.
In other words, no one was likely to pop up and be competitive to either Amazon or Barnes and Noble in the selling of physical books. They were pretty safely in the lead.
But I can see plenty of opportunity for smaller players to compete with them on the digital.
Not only the physical e-readers themselves, which I expect will eventually be divided into expensive e-readers and cheap knockoffs, which would make both the Nook and the Kindle in the no man's land in the middle, but also the digital content.
Smaller, more agile providers; or someone out of the blue, like Netflix.
Meanwhile, they've also opened themselves to competition from the big boys -- for instance, Apple, and it's IPad.
I'm still not sure I understand why businesses subvert their own business models.
Their answer -- if we don't do it, someone else will -- just seems lame. Sure, other people can try. But they might not necessarily succeed, especially if you aren't being cooperative.
This is doubly true for the publishers, who are making themselves unnecessary.
Yes, I understand that the music industry tried to fight it and failed. But I'm not sure caving in completely is the answer, either. Much less instigating the change and leading the charge.
4 days ago