Nov 27
On his podcast with Dan Benjamin The Talk Show, episode #68, John Gruber said, of the way he views the Kindle Fire’s competitive position relative to the iPad:
The Fire is way more interesting, because it’s not an iPad rip-off. I mean, clearly it’s following the path that the iPad blazed in terms of basic form factor, and that the key to tablet computing is touch-based interfaces. It’s not the previous Microsoft style of styluses and full Windows operating system.
He’s right, of course, but what I anticipated him to say was, “The Fire is clearly sailing in the iPad’s wake, but that’s not to say they’re copying iPad.”
The truth is, as everyone knows, Apple didn’t invent the tablet computer. Microsoft didn’t invent it either, but they were the first to bring an actual product to market (AFAIK) with the Windows Tablet PC.
But the Tablet PC didn’t catch on. It didn’t leave a wake for others to follow. To stretch the boating metaphor, it was like a cargo ship scraping its hull on in too-shallow water.
The iPad followed the Tablet PC’s path, but it sails in deeper water — water that wasn’t there before. Apple brought the ocean.
And now the ocean is there, the Kindle Fire has an ocean to sail in. What we haven’t found out yet is, are they another boat in iPad’s wake, or just waterskiers?
Later in the podcast, Gruber makes the point that quite possibly zero people who have bought a Kindle Fire were first-time Amazon customers:
That you can say, ‘Look, if you trust us, and you already have an account with us…’ And I can’t help but think that almost everybody… I mean how many people do you think have bought a Kindle Fire, who didn’t already have an Amazon username and password? I mean, maybe zero! It might literally be zero people who’ve done that.
Thinking about what makes the Kindle Fire the first credible competitor to the iPad, it occurs to me that Amazon and Apple both have an immeasurably valuable asset to their names: millions and millions of credit cards.
Once a company already has your credit card details, it is so much easier for them to get you to give them money. This is obvious, but to finish the point, the user experience of entering credit card and shipping address details is long and painful. You have to type a lot of personal details into the website of a company you just met, and any mistake might mean you don’t get what you want, or worse, lose some money.
To flip it over, the point is that every account they have, with credit card details, is an expression of trust from the customer. Credit Card = Trust. You are already in business together. The asset that both Apple and Amazon have is the trust of millions of people.
And it’s all about trust. Amazon was the first truly successful retailer on the Internet. They basically invented online commerce. They had to invent a lot of the technology that allows us to use credit cards — a hopelessly insecure technology conceived in simpler times — on the new world of the Internet. When it comes to using credit cards online, Amazon brought the ocean.
Apple started building its stockpile of credit card accounts much later than Amazon, with the iTunes Music Store. And they leveraged the trust they had earned from making stuff that “just works” to add more accounts with the App Store. Steve Jobs quoted the number of accounts a few times in keynotes, particularly at WWDC, to encourage developers to write more apps, which sold more iPhones and iPads, which got them still more credit cards. This feedback loop has generated a great foundation for Apple to sell things to people, and it’s probably not even 10% of Amazon’s credit card accounts.
If credit cards are a proxy for trust, or at the very least a gateway for digital commerce, then what other companies have this? Seriously — who else has as many credit cards on file as Amazon and Apple? Nobody, right? Certainly not Google, and probably not PayPal, either.
If you stop and think about that, it implies a potential for almost all digital commerce to go through Amazon and Apple. That’s an incredible prospect. And it’s why I expect Apple to enter the market for ad-hoc payments. Maybe NFC, maybe something like Square, maybe something more like EasyPay, maybe something totally different.
But no company can do that without Trust. So the only question is, will it be Apple or Amazon?
willhains posted this
