There are simply too many things going on for any one person even to know the key basics in every relevant field, never mind become an expert or have some insight.
No-one can be an expert on all of those
I completely agree with Benedict. When one person can not synthesize a multitude of areas, a team of experts is the answer. Each person in this fictional team is a “T” expert — meaning having a decent understanding of a variety of areas and a deep understanding in the area(s) of core concentration. When the understanding of such a team is put together the result is a solid understanding. One needs to be careful to have few gaps between the stems of “T”s to avoid cracks and blind spots.
Here is an update on digital camera market performance in 2012. The Camera and Image Products Association of Japan provides data on the number of units produced, shipped and their value. Most major digital camera vendors participate in this research. With a majority of digital camera vendors hailing from Japan, the data from CIPA is a good proxy for the industry. Let us read into the trend based on the shipment data.
- SLR camera unit shipments continued to grow. 2012 saw 28% more shipments.
- One in 5 digital cameras shipped was an SLR.
- Basic camera shipments continued to decrease. 2012 saw 22% fewer shipments. This is the worst drop since 2006.
- 2012 saw a break in price erosion of the past several years. Basic cameras held the price. SLRs on the other hand reversed the trend and sold for higher price.
- Price of basic camera, on average, held steady at $115.
- SLR camera ASP went from $429 to $467.
- On the whole ASP improved significantly to $187.
- SLRs accounted for 51% of total revenue.
- Revenue from basic cameras fell by 22%.
- SLR revenue increased by 41%.
- Overall revenue increased slightly.
All the above charts are based on US Dollar equivalents (1 JPY = 0.0125 USD) of prices and revenues reported in Japanese Yen.
The following table shows growth rates of various aspects.
Square payments is a disruptive innovation. Square started as a new market disruption by enabling people who until then could not accept credit/debit card payments, to do so from the convenience of a smartphone or an iPad. As expected, according to theory of disruptive innovation, there was no response from the incumbents.
Again in line with disruptive innovation theory, as incumbents are expected to, Square moved up market with its Register app that turns an iPad into a register. Register is also a low cost disruption. It is much cheaper to get started with a Square App on a iOS device than to install a traditional “cash” register. Incumbents will start feeling the pressure now.
A primary advantage that Square has over traditional can registers is that it is a software solution. Product enhancements are cheap and easy for the merchant. It rides on the mobile device boom. Imagine the possibilities for the passenger in a Taxi cab fitted with a iPad for Square Register, news updates: news updates, email, … endless.
I think Square activity will be a barometer of the economy. It will be a window into consumer behavior similar to FedEx shipment trends, payroll churn data from ADP. Such insight in its raw form might not be of commercial value to Square. Remember Mint? Mint provided a convenient way to gather credit cards, loans, banking accounts, and stock trading accounts in one place to get a complete picture of one’s finances. Mint was able to gather some insight into consumer behavior. However, Mint failed to create a thriving business model to leverage such insight, and was acquired by Intuit. Mint.com continues to pitch credit card, loan offers that could lead to savings. the pitches are customized based on user activity (annual fee on a credit card, APR, etc.,). However the revenue from providing customer leads was clearly not big. As @asymco says, Square is sitting on a mountain of valuable data. I suspect they will find a way to leverage it and thrill users with better experiences, even if not monetize it directly. Yes, the age of Big Data.
There has been much talk about NFC for payments. NFC requires more change in user habits than the solution pioneered by Square. With Square, people continue to use their credit cards and pay their bills at the end of the month as they always did. Merchants need not retool to accept NFC payments; Square builds on the millions of mobile devices in merchants’ and consumers’ hands. But this leads us to what is missing in Square.
An element of disruption is missing in the way Square works now. Square accepts traditional credit cards and debit cards as the only mode of payment. The value chain still includes payment clearance houses which presumably take a cut of the 2.75% processing fee that Square charges for every transaction.
I suspect Square is working on a means to eliminate payment processing houses from the value chain. Preloading user account with money is the quickest; direct debit from a bank account might be easy; mimicking credit card functionality is the toughest: there is a lot of risk in providing credit to user and ask to be paid later. Given the prevalence of credit card usage, Square would have to live with payment clearance houses until it cracks the hard one. No wonder then Visa is one of the early stage investors in Square. Linking a checking account to Square might be the best in the short term.
There will be copy cats and the first one is Paypal Here. Again, this includes payment clearance houses. For now, Paypal’s advantages seem minimal: a slightly smaller processing fee at 2.7% (vs Square’s 2.75%), same day availability of funds in merchant’s paypal account (vs Square’s next day to merchant’s checking account). Paypal is limited to Paypal users, Square is open to anyone using a smartphone and a credit card.
Competition is not standing still. The opportunity in mobile payments is big and everyone would love to have a piece of it. Just one example: Mobile network operators are hard at work via Isis. MNOs have been seeing less love these days though.
Square is promising.
Image source: NYT bits blog
Production and shipment data for digital cameras from Japanese vendors is now available for all of 2011. I had discussed the data from 2010 in an earlier post here. The Camera and Image Products Association (CIPA) of Japan provides data on the number of units produced, shipped and their value. Most major digital camera vendors participate in this research [pdf]. With a majority of digital camera vendors hailing from Japan, The data from CIPA is a good proxy for the industry. Let us read into the trend based on the shipment data.
- SLR camera shipments continued to grow. Shipments increased 22% in 2011.
- SLR camera growth was the lowest in six years apart from the across-the-board bad year in 2009.
- For the second time in six years, basic camera shipments decreased on an annual basis.
- SLR units accounted for 13.58% of total shipments.
- Prices of both SLR and basic cameras continued to fall. On average, a SLR camera sold for $429, and a basic camera went for $116.
- The price erosion was much less than previous years.
- On the whole, ASP in $ terms improved slightly to $158.
- SLRs accounted for 63% of total revenue in 2011.
- For the second time in six years, revenue from basic cameras fell.
- SLR revenue increased but failed to make up the decrease in basic cameras, resulting in a reduction in overall revenue for the year.
All the above charts are based on US Dollar equivalents (1USD = 79.70 JPY) of prices and revenues reported in Japanese Yen. Yen strengthened again in 2011, adding to Japanese vendors’ woes. In Yen terms, the performance was worse. The following table shows growth rates of various aspects.
The-internet-of-things (TIoT) has been a buzz word for a while now. The idea of adding intelligence to devices and appliances around us and connecting them in a manner to help get our job done in an intelligent and intuitive manner is compelling. There are several hurdles to overcome.
What It Takes
I would broadly categorize the pieces of this puzzle into:
- Equipping the device/appliance.
- Brains for awareness of the self and the environment.
- A means to connect to external world and exchange information.
- Intelligence to adapt itself as instructed over the network.
- An ecosystem for developers.
- A compelling business proposition.
The technology to make the devices intelligent and connected have been around for a while: sensors and connectivity are ever more prevalent even in small form factor devices such as smartphones.
Mobile Or Not
As in any battle, there will be winners and losers. The consortium of cellular network operators would love to have all devices connected via their mobile networks. Vendors of connectivity solutions such as Wi-Fi, Zigbee would say the best means is to connect devices to a local network and then connect over the Internet. Each solution has its merits. One can foresee which solution will win in various scenarios by thinking through the lens of the job the user is trying to get done. For a home energy management system controlled by a connected thermostat, Wi-Fi is a good solution. Cellular connectivity for a thermostat would be an overkill. For a scavenger robot winding its way through gutters, mobile network connectivity is fitting.
Going without mobile network connectivity will be beneficial in a couple of ways:
- No monthly data service charges.
- Device vendors can create products faster bypassing MNO’s adoption, approval process. Proof is no farther than this Engadget article: How an AT&T smartphone comes to life.
- Device vendors can reach customers fast and direct. Case in point: Nest thermostat is sold directly and through Bestbuy.
What We Need
- A zero configuration mechanism to add devices to a network. For home automation, Bonjour comes to mind. A mobile ad hoc network is due for things more mobile.
- Intelligent software to process the data.
- User interface. Smartphone, Tablets, or whatever comes next, are well placed to be the interface between the user and TIoT. Apps for individual devices is a good route.