September 2012

Do you have to own the whole experience to deliver it well?

Wired magazine has a great article about the recent exodus/exorcism of Kindle from their shelves in Dumped by Walmart, Amazon Should Fear Other Frenemies. This is part of a bigger shift taking place in consumer electronics and bleeding over into other categories as well. When Apple opened their retail stores, they started the process of cutting out long term partners Best Buy and Walmart by adding retail operations to the mix. When Amazon got into the eReader business, confused product manufacturers found their partner becoming their competitor.

For both Apple and Amazon, these seemingly erratic moves make sense for their business for one particular reason, providing a consistent experience that drives brand loyalty and growth. We’ve gone through decades of splitting up the actors involved in delivering an experience, starting with Ford Motor Company dismantling their River Rouge plant where they used to feed in iron ore on one end and drive out finished cars on the other end. Now the automotive industry is messy disaggregation of smaller firms all depending on the retail channels of the Big Three. Johnson Controls, a spinout of Ford, now provides interiors for most of the automotive industry.

Starting with the development of their own trackpad for MacBooks, Apple started spinning more and more functions and components inside, becoming even more vertically integrated in the quest to deliver a unified and compelling experience. But what does this mean for their former collaborators turned competitors, ranging from retailers like Best Buy to component suppliers like Synaptics or Samsung? For Apple, and now Amazon, as they find components of the user experience becoming more critical, they become candidates for spinning in, leaving former partners scratching their heads and gawking at their balance sheets wondering where the revenue went.

When does it stop? Does Samsung open super stores? Does Walmart start to sell wPhones? Is Apple’s next move to buy a carrier or launch their own network as rumored with the original iPhone launch? When does it make sense for Apple to start processing their own Bauxite ore into aluminum or Amazon to manage their own paper pulp forests for books? What does this mean for consumers and for the market diversity required for the darwinian pursuit of innovation?

Twitter shows market more engaged with iPhone 5 launch than iPhone 4s

While there’s little surprise that the iPhone 5 has already sold out near term inventories, what is a surprise is how much more the public was engaged with the iPhone 5 launch over the iPhone 4s launch.

Much has been written on the mixed response of the market to the iPhone 5 but little as compared the iPhone 5 to the iPhone 4S launch in Oct. 2011. Argus Insights has done a historical analysis, looking at the social media mentions around the iPhone 4S launch and comparing that to the iPhone 5 launch. We’ve also extracted the number of retweets as a way to measure market engagement with the two events.

As you can see from the graph above, the raw volume of traffic for the iPhone 5 launch was more than twice the volume of the iPhone 4S launch almost a year ago. Along with the obvious argument that there are just more people using Twitter than a year ago, more than doubling of volume also indicates an increased level of excitement for this particular product launch. Argus watched the traffic change minute to minute during the launch as excitement ebbed and waned for the different features being discussed on stage. When we look at the level of retweets, it’s even more telling the differences between then and now.

Again, the level of retweet traffic was almost twice of the iPhone 4s launch. At Argus Insights we believe this higher level of retweet actually indicates a great audience engagement with the iPhone 5 launch over a year ago. We view retweets as an indicator of the general twitter audience engaging with the event. Sure a lot of people are excited about the iPhone 5 and much of the traffic was from the press in the room but a significant amount of their messages were amplified through retweets.

We believe this indicates the iPhone 5 will be a bigger launch than the iPhone 4. In fact, when you see how wide spread the location of the traffic is for the post launch of the iPhone 5, you realize how many people across the United States were tracking the launch in real time, sharing their hopes and hatreds of the new device.

The same view for the launch of the iPhone 4s shows traffic not as wide spread as for the iPhone 5.

So while the phone itself received a mixed reception, the sure volume shows that this will be a big launch for Apple and their competitors.

Pre launch iPhone 5 buzz spoils the surprise

We’ve been tracking the iPhone 5 launch craze for a few weeks now. With probably more buzz than an election campaign, the iPhone buzz volumes (Twitter alone) for the iPhone 5 peaked at over 20,000 per minute when the iPhone was first unveiled.

Prior to launch, what were people talking about? What was driving the conversation? What features were most anticipated? We analyzed the pre launch buzz using the post-launch realities of Lightning, Passbook, etc. and found that across the board there were more leaks than a cardboard canoe with even the names of unannounced features in rather broad distribution, for secret information, prior to launch. Additionally we can see that the market is stacked against Siri and mixed views on NFC in general. We’ll be back soon with the post launch analysis.

You can also see that excitement around the launch was pretty widespread across the US market. We are merging multiple pre launch data streams and will update this view as soon as we get the post launch information.