Winning the Hardware Software Game Winning the Hardware-Software Game - 2nd Edition

Using Game Theory to Optimize the Pace of New Technology Adoption
  • How do you encourage speedier adoption of your product or service?
  • How do you increase the value your product or service creates for your customers?
  • How do you extract more of the value created by your product or service for yourself?



  • Are Device – Content Systems Moving Towards Compatibility or Incompatibility?

    Public vs. Private Information on the Internet

    Does Hardware Drive Software, or Vice Versa?

    Why Have Past Consortia for Compatibility Failed, and Why Would DECE Now Succeed?

    So Are Device-Content Systems Moving Toward Compatibility or Incompatibility?


    There are two trends occurring in the digital world that seem to be at odds with one another.  The first is that towards incompatible hardware/device – software/content ecosystems and the other is towards compatible ecosystems.

  • For Smartphone Profitability, Focus on Software Beats Hardware

    A recent NYT article, ‘Why Japan’s Cellphones Haven’t Gone Global” by Hiroko Tabuchi, presents a dichotomy in the Japanese cellphone market: while the technology is extremely advanced, the market has evolved in such a way as to effectively isolate the Japanese market from the rest of the world. This will become increasingly problematic for Japanese suppliers (of both hardware and software/content/services), since the Japanese market is shrinking.

  • How Do Bricks-and-Mortar Retailers Compete with the Internet?

    Follow Apple’s Lead?

    Establish an Online Presence?

    Product Differentiation

    Offerings with Online Advantage

    Offerings with neither Online nor Offline Advantage

    Offerings with Offline Advantages



    I wrote a previous blog entry on retailing competition between offline and online stores, Will Smartphone-Enabled on-the-Spot Price Comparisons “Upend” Stores’ Business Models?This blog entry takes the previous analysis a step further and considers more explicitly how offline stores might be able to compete with Internet providers. In particular, this examination considers the increasing tendency of consumers to use bricks-and-mortar stores to test out new products, but then buy the products at lower prices on the Internet. How can bricks-and-mortar stores prevent such free-riding or otherwise continue to sustain viable businesses despite the existence of lower prices on the Internet?

  • Is Apple's Ecosystem Successful Because of or In Spite of Apple?

    Does Apple Dominate the MP3 Player & Smartphone Markets?

    Apple iPod & iPhone Sales Timeline

    How Did Apple Manage the Growth of Its Ecosystem to Create Value?

    Would Even More Value Have Been Created If Apple’s System Had Been Open?


    A recent article in Newsweek, “Think Really Different” by Daniel Lyons, laments the fact that Apple’s ecosystem is a closed system, which represents paradigm shift from the prior, open system the PC industry and post-Internet world had evolved into:

  • Playing the e-Book Game

    The e-Book Pricing Battle

    The following is a brief history of the e-book pricing battle that has been taking place. The passage quotes heavily from three articles:

    “Publishers, Amazon in Flux in e-Book Pricing Fray” by Phil Wahba and Alexandria Sage, Reuters  

    “Amazon Looking Foolish in e-Book Flap” by Therese Poletti, MarketWatch

    “Cost of an E-Book Will Be Going Up” by Motoko Rich and Brad Stone, NYT

    Being first to market, Amazon established a $9.99 e-book pricing model.

    Amazon was first on the market with an electronic book (e-book) reader (e-reader), the Kindle.  Being first to market and having a large market presence together provided Amazon with enough leverage vis-à-vis publishers as to be able to establish a low, fixed sales price of $9.99 for all sales of e-books to Kindle users. This single, low, fixed price for all books is analogous to Steve Job’s iTunes music store pricing model, which initially sold all songs for 99 cents each.

  • Playing the Platform Game

    The purpose of this analysis is to better understand the dynamics of internet platforms. The analysis considers the three basic types of platforms:

    • Vendors (WalMart, Apple, Pandora, etc.)
    • Social Media (Facebook, LinkedIn, YouTube, etc.)
    • Matchmakers (eBay, Uber, etc.)

    And will seek to address such issues as

    • Who are the different players in each type of platform game? 
    • How do the players' actions combine to generate value in each type of game?
    • Who extracts what value?
    • Which types of platforms and configurations have the greatest value potential? 
  • War Between Amazon & Apple?



    Amazon vs Apple


    I just Googled “Apple” and “Amazon” and “war” and got 40,300,000 hits, with such headlines as

    The Amazon-Apple War Is On

    New $199 Amazon Kindle Stokes Fire in War With Apple

    Amazon Ignites Tablet War with Fire, Takes on Apple

    The Amazon-Apple War Is On - Kindle Fire, 7" Tablet for USD199

    But is Amazon’s release of its new tablet really an indication that it is trying to take on the Apple ecosystem?  I don’t think so.

  • Why Did Apple Block Potential Profits from Pre Users?

    The latest battle in the Smartphone Wars was won by Apple, who blocked users of the Palm Pre from being able to access iTunes. Since Apple makes a profit on every sale from iTunes, why would Apple want to cut off the potential profit source associated with Palm Pre users buying content on iTunes?