software, services, and hardware, originally isolated three areas of science and technology market, however, as the effect of “giant” spread, more and more technology giants began to cross-border business, is not only in order to seek more revenue, but to create integration platform — a popular, is to build its own ecosystem.
the amazon is one of the most striking predators.
the Fire TV continuation of both the hardware strategy
on April 2nd, amazon has just released a new FireTV set-top boxes. And, according to people familiar with the company is now ready to launch a smartphone. It is enough to show that amazon has positioned itself as a hardware company, ready to play against apple, Google and samsung.
figure 1: amazon in recent year share price
The shape of the
although since this year, but over the past year, amazon’s share price is still rising from $265 to $265. The stock fell over the past three months is the major reason for the slowdown in revenue growth. It is easy to see that the e-commerce giant chose to enter the other hardware business, very important reason is that in order to restore the revenue growth.
the company is currently the world’s largest online retailer, it sells the products covered by the provisions, books, music and digital content, and many other fields. Amazon, however, are not only recently began eyeing the hardware market, as early as in November 2007, it launched Kinlde e-reader. In September 2011, it released the KindleFire tablets. Then gradually upgrade the product. Thus, set-top box or smartphone, is on the premise of constantly overweight, extends the existing strategy.
to build ecological system
amazon hardware products has always been the price is low, its main purpose is through the digital content of subsequent revenue and other products. This is pretty similar with Google. Google to each big enterprise provide free Android operating system, but can through smart phone search ads to earn revenue.
graph 2: the amazon sales revenue growth
and specific to the amazon, it can be through gold members and e-commerce business revenue. Kindle, the Kindle Fire and Kindle FireHD tablets are inherited this train of thought, and the recently released the Fire TV set-top box is no exception, it costs a mere $99.
the Fire TV is mainly a streaming video equipment, positioning is similar to apple’s AppleTV. Through the Fire TV, users can watch the video content from Netflix and YouTube and Hulu. The product can also obtain their amazon InstantVideo service, and listen to the amazon, Pandora and TuneIn streaming music. In addition, FireTV have voice search function, built-in 2 gb memory, highest can parse full 1080 p hd video.
FireTV can even act as a platform, to attract developers to design all kinds of Android mobile applications and games. According to the amazon app store and vice President mike game? George (MikeGeorge) is introduced: “developers have through the Kindle Fire and amazon appstore achieved commercial success. FireTV is to attract developers to design applications and games for amazon and a reason. FireTV is expected to attract a large number of developers, including both the existing Android developers, including host game developers, including PC developers.”
“will be on sitting room and they all love entertainment new consumers interact. We have already attracted 2 k, AOL, Bloomberg, ClearChannel, Disney, EA, ESPN, Gameloft, Hulu, Mojang, Pandora, SEGA, SHOWTIME, Telltale, Ubisofth and Vevo, a group of outstanding developers more developers will also join in the future.” George added.
according to amazon’s practice, the electronic product’s primary purpose is to attract users, and then gradually to promote its various services, sales of various products. The strategy has paid off, in the past few years, the company’s services business revenue growth has been twice the product revenue growth. However, the two revenue growth are slow gradually. And in order to return to growth, the company began to move into new markets through expanding product variety, nature becomes the preferred scheme to add more hardware products.
from amazon’s existing hardware product portfolio, smart phone seems to be most likely to launch new products. It is understood that the company may be in late June launch smartphones, and formal delivery at the end of September, in order to catch the Christmas shopping season this important point.
figure 3: the global smartphone market share
today’s smartphone market dominated by samsung and apple, so amazon must introduce high quality and low price products to succeed. According to market research firm IDC, samsung currently occupies 31% of the global smartphone market, apple is 15%, the total divided up half of the smartphone market. Huawei, lenovo and LG enterprise each have about 2% of the share. It seems that the amazon must introduce some innovation in your smartphone, can truly make a difference.
amazon nature knows this. According to the report, the company hopes to merge 3 d display functions in smartphones, but it will take with special glasses. This phone will also be equipped with retinal tracking technology, so that some images show the similar to the 3 d effect.
service or into a killer
the streaming media service is likely to be the amazon’s killer, enormous additional value for its hardware products. According to market research firm Qwilt amazon gold members exclusive InstantVideo streaming video service, traffic in the United States has exceeded the Hulu and apple. Over the past 12 months, the amazon’s streaming video traffic growth of 94%, and in some American operators in the network traffic growth or even close to 300%.
figure 4: the video website rankings
however, to really dominate the market, amazon is still a long way to go. Single from this measure, though the company had great progress, but still lags far behind Netflix and YouTube, after the merger of both share up to 74%, while just 3% for the amazon.
it is well known that the content is the most important elements of the video field. Amazon also do in this regard, not only buy the copyright, also investment shooting homemade plays, and achieved good results.
amazon vice President of digital video and music bill? Carl (BillCarr) said: “we have to quality of TV shows and movies invested hundreds of millions of dollars. Gold members can without limit to watch their favorite movies and TV shows. As we increase the “alpha” house, “Bosch”, “TheAfter”, “Mozart in the Jungle” and “Transparent” homemade plays, such as the content of the users will no doubt for us to provide more satisfied. Now, FireTV will provide users with the most simple way of content access.”
amazon still trying to popular television’s exclusive rights to publish subscribe for gold members. For example, the company announced on April 1, 2014, to reach an agreement with 20th century fox television company allows amazon gold members through InstantVideo exclusive to watch the TV drama “24” 192 sets of content.
of course, to get the gold medal member, need to pay a fee. And with the content increasing, the amazon provides gold members of the annual fee will rise from $79 to $79. However, in addition to streaming video, gold members from amazon shopping can also enjoy the unlimited two day delivery service.
content rising cost pricing is amazon gives the main reasons, this seems to be right – after all, there is no such thing as a free lunch. But it also confirms the strategic nature of the amazon: sell hardware, but without the hardware to make money. What’s more, a subscription fee is the most dominant cost of users pay.
on amazon’s hardware or become the gold members, extra shopping and contents of the cost, is the amazon’s real value of revenue.
source: tencent technology on April 18, long song compiled