How's My Strategy?

[howmystrategy-blog]

How might Apple disrupt TV?

Let's just say that Apple finally introduces THE Apple TV. Not the cute Apple TV add-on device (which is pretty decent for $99). But a real, full-fledged, large format, HD screen that hangs on walls and does cool stuff. 

The question is: what would be the disruption?  What would be the game changer? 

For the iPod, the big disruption to the existing market was iTunes.

For the Macbook, though "incremental", the disruption was the design and form-factor (aluminum unibody construction w/ magsafe / macbook air). 

For the iPhone, the game changer was the app store.

For TV?  Seriously, what could be the huge disruption?  Is Apple negotiating deals with media companies to offer an over-the-top "cable-esque" subscription package, fully integrated in?  iTunes like pricing on a per show basis for live events, even if "cord-cut"?  Most of the likely candidates for disruption are either UI or Content based (TV content or large screen App Store etc). Interaction-related is also a possibility (eg. motion control, SIRI, connection to your other Apple devices). But where is the "big win" for Apple so that people instantly get how the iTV is different?

Honestly, this is probably why the long-rumored Apple TV has taken so long to be announced.

[howmystrategy-blog]

Apple is becoming an Incrementalist

Tomorrow, Apple is expected to introduce a low cost smart phone and new colors of what will likely be the iPhone 5S. 

If Apple does not introduce something that potentially disrupts a "significant" category (Televisions are a $100bn+ industry segment so that would likely be the best one) then Apple truly is at risk of becoming an Incrementalist rather than a disruptor/game changer.

[howmystrategy-blog]

Samsung Iterates Like Hell

Samsung's new Galaxy Gear Smart Watch + new Galaxy Note 3 further cements Samsung as the pre-eminent iterator in human electronics. They get product out FAST and maybe even before they are really ready. And they are not afraid to have bugs...Samsung's rapid pace of Iteration (not necessarily Innovation) reminds me of Microsoft in the old days when they would scramble to get products out fast (Internet Explorer 1 was a dog, Windows 3.1 was terrible etc) and then iterate until they get it right.

Iteration + pace + scale + global logistics makes them a force to be reckoned with.  Iteration is their primary defense against product flops as well.

[howmystrategy-blog]

AOL Buying Adap.tv Will Add Essentially Zero Multiple

AOL could be looked at broadly as 3 core businesses:

1. Content (HuffPo, Patch, Techcrunch, Engadget et al) 2. Advertising Technology & Network (Advertising.com et al) 3. Legacy Connectivity (AOL Dial-up Access)

If you look at #3, the public markets essentially assign a negative multiple to the revenue in this line of business as it is clearly legacy and shrinking, with minimal strategy value.

#2, the Ad business, does quite a bit of revenue. Estimates of revenues between $500-$600mm are common.  However, with a total market cap of only about $3bn, AOL is not getting much of a premium on this business.  Ad tech businesses typically are getting somewhere between 1.5-5x multiples on revenue depending on margin and growth rates.  

So the question is: with Adap.tv, isn't AOL essentially doubling down on an area of low multiple "credit" assigned by the public markets?  and if so, why not make a bigger move into Content Marketing which would augment their core Content business and lead to more "credit" being assigned by investors?

[howmystrategy-blog]

Microsoft is Yahoo'ing Nokia

Microsoft essentially took over Yahoo's search business as a defensive move against overwhelming market leadership (Google).  Microsoft is now essentially doing the same thing with Nokia's mobile business - taking over a now-also-ran as a defensive move.

In comparison, Google's acquisitions have been more successful as a whole because they are usually "strategy-defined" (Doubleclick, YouTube, etc) rather than defensive or follower moves (Wildfire).

It might be better to say that Nokia is Yahoo'ing Microsoft...