Asymco’s Horace Dediu on Capital Spending’s Transformation of the Electronics Industry – YouTube.
A video of Horace Dediu’s presentation at IBM’s Electronics Global Leadership Forum in Taipei on 23 October 2012. Horace discusses how Apple’s enormous capital spending is reshaping the global supply chain for the industry.
In the parlance of developers Apple keeps “throwing exceptions.” This quarter the iPad surprised with a significant decline in sales growth. I placed a table showing the sales growth for this quarter as well as the previous 22 quarters at the bottom of this post.
Here is a quick review of each line:
The Critical Path, The First Year is now available on the Asymco Store.
You can order here: Asymco Store — The Critical Path Book.
This is a quick note to mention that I’ll be speaking at the Tools of Change (TOC) Frankfurt Conference this October on the eve of the Frankfurt Book Fair. Conference details:
You can get a 20% discount if you use the following code when registering:
TOCPartner20TSpeaker
I’ll be speaking about the jobs publishers are hired to do. Without giving too much away, here is my synopsis of the talk:
We’re inclined to “categorize” or “segment” media according to its attributes. We think of visual, auditory or written forms as distinct. Within each of these definitions of media we further sub-segment according to the way they are packaged. As in books, periodicals, or TV vs. film and albums and singles. These definitions are convenient because they describe the product and the product has evolved into a distribution chain and a therefore a market. It becomes therefore analogous to think of a book market and a TV market and a periodicals market as if these are what people actually desire.
But what people desire are more basic things. They desire to feel good or to be comfortable or to escape into fantasy or to be aroused. They have thirsts for knowledge or flights of fancy or needs for belonging. Authors and story tellers have sought to serve these needs for as long as we’ve been humans, regardless of the medium. When you step back and ask what the real “markets” are you realize that we’ve categorized according to technical and business means of delivering these needs.
Business theorists have a word to describe this categorization: segmentation according to product attributes. It’s a common practice to define markets according to products rather than what these products are hired to do. The great Harvard marketing professor Theodore Levitt used to tell his students, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” The idea that you can categorize by what consumers want to get done rather than what you are selling them is not new but it’s still a very hard thing to get your head around. It’s become known as “Job to be done” segmentation and has changed product planning for many firms. If you apply this method to your industry you realize that the products you sell are in competition not with other products like them but with completely new products. A newspaper may be in competition with Angry Birds and a TV show with FaceBook and a Movie with a cinematic themed video game.
If you take the history of story telling and job to be done analysis into consideration you realize that technology has always played a part in how stories are told and re-told. This technological progress is accelerating and we are now in an era where apps are the new medium which can encompass much of any of the previous story telling mediums. Apps are so flexible and so easily distributed and consumed that they threaten to converge multiple media types. I’ll explain how app economics are affecting not just games, but all forms of publishing.
Jenn Webb of O’Reilly writes:
With its recent release of the new Kindle Fire HD tablets, some have argued that Amazon has declared war on Apple and its iPad. But how serious is the threat? Are the two companies even playing the same game? I reached out to analyst Horace Dediu, founder and author of Asymco, to get his take. Dediu will speak on all this and more at TOC Frankfurt on October 9, 2012. Our short interview follows.
read the interview here: Kindle Fire vs iPad: “Good enough” will not disrupt – Tools of Change for Publishing. (O’Reilly Tools of Change for Publishing).
Amazon will sell as many Kindles as they make, but the number they will make will not be the most they could make.
The logic of selling a product which has a profit model unrelated to the cost of goods sold is tricky. The incentives are different. The risk is not selling too few but selling too many.
For this reason I think the total number of new Fire units to be sold has already been determined by a production order. You cannot think about the business from a demand point of view. If the product would be free then the demand would be infinite. The decision about how many will be “sold” will depend on the goodwill of the producer.
What Amazon tries to do with the brand is ensure that the Fire is in the hands of its most ravenous consumers. That is why it’s not sold in all markets or through all channels. They are sold through Amazon.com in the US (limited sales in UK as well). This is because a large number of the product in the hands of users who only use it for browsing or in areas where Amazon does not have content deals or where its ads are poorly targeted (e.g. India, Indonesia or Madagascar) would be a disaster. It may not be all that helpful to Google to have Android in those markets but as you would expect it’s still a profitable business for Apple.
So one way to think of the Fire is as a promotional item (aka swag) for another business (Amazon.com). Using this frame of mind, assessing its “threat” to another business which charges for the product itself is like assessing whether free t-shirts from trade shows affect the sales of clothing or apparel in general. They do, but mostly the sale of cheap t-shirts. I doubt that people stop buying more functional clothing because they have hundreds of free t-shirts. And then there’s the problem of looking like an advertisement.
A 2 minute video introduction on how I use Perspective to create interactive presentations:
[vimeo 47865727 w=442]
50.2 million.
That’s the estimate from IDC. So why bother asking?
Because that is an estimate. Of the 104 million Android phones shipped in the quarter (itself an estimate from another, possibly different methodology), I could only account for 7 million actually reported. That figure comes from a close reading of an investor presentation from Sony. HTC does not report their shipment numbers. It stopped some time late last year. Neither does Motorola now that it’s a part of Google. Huawei is silent except for setting targets and ZTE published a press release citing IDC’s estimate of its own shipments.
But most glaring of all is the absence of any mention by Samsung of its performance. The company stopped reporting any data on either overall phone shipments or of smartphones within that total since Q3 2011. We may have been able to estimate Samsung if we had more competitor actuals, allowing us to back into a figure. But we don’t.[1]
Which leaves us with IDC’s estimate[2]. But the problem is that since the industry is growing so quickly it is very sensitive to assumptions. Consider how difficult it is for consensus estimates for Apple’s iPhone shipments to come near the actuals–and that’s for one quarter, and knowing all the previous quarters with precision. The absence of visibility into the assumptions made by market analysts (or their methods) should lower confidence in the results.
Consider that IDC specifies 50.2 million Samsung smartphones, implying an accuracy down to 100,000 units. Is this accuracy believable?
There is reason for doubt.
I start with the following graph:
It shows the estimates for Samsung global shipments (latter four quarters are estimates without the benefit of company reports.) I separated the component of shipments that Samsung reported as part of its submission to the Samsung v. Apple trial in California. Note that this (orange) segment consists of most US smartphone shipments. It’s not all US Samsung shipments. It notably excludes the Note, the latest Nexus and the Galaxy SIII.
Continue reading “How many smartphones did Samsung ship in Q2?”
I extend a heartfelt thank you to all 831 backers of my first Kickstarter financed book project. Thanks to you not only will there be a way to refer to and cite the podcasts but, since the project reached 980% of its target, the project allows me to explore new means of publishing and content production.
Clay Christensen said that a disruptor should be patient for growth but hungry for profit. The Asymco experiment is continuing and is staying true to this principle.
The Critical Path: The First Year by Horace Dediu — Kickstarter.
One week into this project and the response has been phenomenal. We are at nearly 500% funded. There are 414 backers so far and the average pledge is nearly $34. This means that the vast majority of people (328 so far) opted for the $35 pledge. Many pledged even more than $35.
Perhaps it’s only symbolic but the interest in the hard copy version was something I did not expect. It’s gratifying that people would prefer to have a physical representation of the work. It also means that I have to think carefully about the production of a good quality paper book.
The abundance of support allows me to invest in design, editing and perhaps illustration as well as the text. I will also have to do a lot of signing.
Thanks again to all who have contributed. I’m completely humbled by the level of support and can only promise to keep doing that which has been so resolutely defended by you all.
via The Critical Path: The First Year by Horace Dediu » What I’ve learned so far — Kickstarter.
