Category Archives: Amazon

How much cash does Amazon have in the bank?

Not that long ago, there was some noise about the amount of cash that Amazon – a company whic rarely makes much profit – had on hand:

Record Christmas takings have swollen Amazon’s cash pile to as much as $9bn (£5.7bn), the online retailer is expected to declare on Tuesday in results that will inflame the debate over its tax contributions around the world.

(via Amazon expected to reveal cash pile of up to $9bn after record Christmas)

But here’s the thing: Amazon’s cash isn’t like the cash held by a company like, say, Apple:

Most cash that Amazon.com generates comes not from earnings, but from the fact that it receives payment from its customers much faster than it pays its suppliers. During 2011, 76.8% of Amazon.com’s cash provided by operating activities came from the expansion of accounts payable (source: 10-K). Given that Amazon.com’s revenues are expanding fast, this effect translates into a larger cash hoard on its balance sheet.

(via Amazon’s Cash Is Not Amazon’s Cash – Seeking Alpha)

This isn’t cash that Amazon can invest in infrastructure, or product development. It’s just cash that it holds for a short period of time.

What, exactly, is Android?

Toward a More Informed Discussion on Android | TechPinions:

“Android is in no way shape or form the same as OS X, Windows, iOS, Windows Phone, or RIM’s Blackberry OS. When we speak of those operating systems we are speaking of a unified platform controlled by one company whose platform share represents the total addressable market, via single SDK, for developers. Should a developer want to develop for any of those platforms, all they need do is get the SDK for that single platform. Android, however, is an entirely different beast.

Android is not actually a platform, it is an enabling technology that allows companies to create platforms Because Android is open source, all the term Android refers to is the AOSP, or Android Open Source Project. Anyone can take this core code and create their own custom operating system using Android as the core. Google created and manages the AOSP but also has their own version of Android. Amazon does this and has their own version of Android. Barnes and Noble does this and has their own version of Android. I would not be shocked if new entrants as well take the Android platform and make it their own for their own needs as well.”

This is the thing that gets overlooked, all the time. Android is not a single, unified operating platform: it’s a set of semi-compatible platforms, built around the same technology.

Amazon’s version of Android is to Google’s version of Android what FreeBSD is to Ubuntu. You can probably get the same apps to run – but be prepared for some tweaking.

Amazon’s Ad-supported Kindle Price: Too High?

TUAW on the release of an ad-supported Kindle from Amazon:

“Still, the $114 price point seems a little silly; $99 would be a much better psychological buy-in point.”

I think that $25 is a fair reflection of the value of the ads. Remember, these ads are home-screen only, and not in the books. Pundits constantly over-estimate the amount of revenue that ads can bring in, and the expectation that Amazon could price a Kindle at $99 based on these kinds of ads is wrong.

No one in the world knows more than Amazon about pricing for a profit.

Apple denies content purchasing change, confirms content purchasing change

Apple’s Trudy Muller, talking to John Paczkowski:

“We have not changed our developer terms or guidelines,”

But wait…

“We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.” (my emphasis)

So there’s been no change in the rules, but we are now requiring developers to do things differently. But that’s not a change in the rules. Oh no. Citizens, we have always been at war with Eastasia.

Yes, this destroys the model that Kindle currently employs. Kindle offers customers the ability to purchase books outside of the app, either via Safari or a desktop browser. That clearly means that Amazon must now offer the same content via Apple’s in-app purchasing, delivering Apple its 30% due.

We shouldn’t be surprised, because Jean Louis Gassee wrote about this in January:

“Three months ago, without explanation, Apple began withholding approval of new apps using the subscription loophole. Wondering publishers were left without answers.

Then came terse emails recalling the §11.1 of the App Store Review Guidelines :

11.2     Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected

with the following the punch line :

For existing apps already on the App Store, we are providing a grace period to bring your app into compliance with this guideline. To ensure your app remains on the App Store, please submit an update that uses the In App Purchase API for purchasing content, by June 30, 2011.”

Apple has a perfect right to do this, of course. But my bet is that either Amazon will ultimately sue, or it will offer content through IAP – at 30% 42% more than it usually charges. I wonder who will blink first.

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In praise of Kindle

Getting the out-of-box experience right with consumer electronics is hard, which is why so many companies get it wrong. With the Kindle, Amazon has produced a customer experience that Apple would be proud of. In fact, it’s arguable that the integrated experience of Kindle is actually better than anything Apple has done.

Open the box, there’s the Kindle. On screen is a message, telling you how to plug it in to charge and how to turn it on. This message isn’t printed on a cheap sticker – it’s actually on the Kindle screen. One of the advantages of eInk is that you can put something on screen and it will stay there, without drawing power, until the screen is refreshed.

When you turn it on – and like Apple products, it has enough charge to do so straight away if you wish – it’s registered to your account. All your books are there, in the archive, ready to be downloaded. You don’t have to configure anything, because the 3G connectivity is set up.

And there’s a welcome message from Jeff Bezos, personalised with your name. Surprise, and delight.

Then there’s the design of the Kindle itself. With its third iteration, Kindle has crossed the chasm between portable device and just “device”. It’s like a wallet, or a set of keys: We don’t call them “portable wallets”, or “portable keys”, because the portability has reached such a stage that it’s intrinsic to what it is.

The same is true of Kindle. It’s slim and light enough to slip into a bag and forget, just as you would a wallet or a set of keys. It adds so little weight that you can effectively forget its there.

The design of it is beautiful, yet functional. The one jibe is the row of keys, which are small and a little clunky. Everything else feels and looks great.

Even the power charger goes above and beyond. Like the Apple iPhone chargers, it’s like a slightly over-sized plug. In fact, it’s so much like a plug that you probably would struggle to spot it on a four-way block – which is probably why they’ve printed a neat little Amazon logo on it.

The integration with Amazon is, as you’d expect, seamless. Buy a book, boom – it’s downloaded in seconds. The experience of managing the Kindle, subscriptions, and so on on Amazon’s site is clear and easy.

Of course, the price you pay for this integration is buying books from Amazon and nowhere else. You can’t loan the books to anyone else, and there no way (yet) for someone to gift you a book from your wish list. But given that the prices of the books is so low, most customers won’t care. These are, like the original paperbacks, throw-away books. If I can’t read them in 50 years time, will I really care that much?

If you’re considering getting an iPad primarily to read books from Amazon, consider getting a Kindle instead. The iPad can do lots of things that the Kindle can’t, and never will be able to do. It’s a crappy browser, it doesn’t do email, there’s no apps. But it’s also much, much cheaper and unless you’re reading in low light (where the Kindle’s e-ink screen fails) it’s generally a better reading experience.

Even if, like me, you’ve got an iPad already, I’d still consider getting a Kindle if you’re a voracious book reader. It can slip into a jacket pocket, and go with you when you don’t want to carry a bag. It’s ideal for those situations when you’ve got to take a laptop, and don’t want the extra weight of the iPad. And the syncing is completely silent, completely invisible, and totally in the background. You never have to worry about whether you’re started the app and synced your books, which isn’t true of any other Kindle platform.

Now, if you’ll excuse me, I’ve got a book to read.

Smartphone market share

Apple smartphone growth puts competition in the shade

Canalys has released its smartphone market share figures for Q1 2010, and the big winners are undoubtedly Apple, HTC and Motorola, all of which posted treble-digit growth in unit shipments compared to the equivalent quarter of 2009.

Smartphone market share

To put that into a little context: Apple’s worldwide market share increased by 4.4%. This increase is almost the same as Motorola’s entire share of the market, even after the excellent growth it showed over the quarter. Continue reading

Amazon caves in to Macmillan, pouts and sulks

Macmillan E-books – kindle Discussion Forum:

We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.

Someone should tell them that companies which have a monopoly over their own ebook-reading hardware and use DRM to tie books to that platform really don’t have a lot of a ground to be pouting over “monopolies”.