in an iPod World

Kindle survival: Myth or real?

There have been a series of news about Kindle. First, last week, Kindle announced that the sales of e-books exceeded that of hard copy books. Second, yesterday, Amazon announced that Stieg Larsson, the late Swedish author who wrote the trilogy of "The Girl with Dragon Tattoo," "The Girl Who Played with Fire," and "The Girl Who Kicked the Hornet's Nest," became the first author to sell more than one million e-books through Kindle. Third, Newsweek had a column, entitled "Why the iPad hasn't killed Kindle."

According to the article, Amazon has managed to sell about 3 million Kindle so far since its introduction in November 2007. On the other hand, Apple sold 3.3 million iPad in 3 months. Hmm. This looks like a pretty ugly game for Amazon. Sure. Amazon is surging the sales of ebooks. But, remember, iPad has Kindle app. In fact, buying an iPad did not stopped me from buying ebooks from Amazon. I've bought only two books on iBooks. But, I've bought over 10 books from Amazon and carry more than 30 books through Kindle app on my iPad. Before we conclude that Kindle as a hardware device is surviving, we need to look at the data on how many ebooks were sent to Kindle and how many to iPad. My guess is that a lot of those ebooks were sent to those 3.3 million iPads as much as they were sent to 3 million Kindles.

The real story behind this is decoupling of what used to be known as book into hardware, network, software and contents. Both Apple and Amazon seem to benefit from this decoupling.

Thoughts on Samsung's Galaxy S and Innovation

In response to iPhone phenomenal success in its South Korean home market, Samsung introduced Galaxy S, an Android-based smart phone. I have not seen it. So, I cannot comment on how good or bad it is. But, based on many reviews that came out, one thing is clear. It is not going to be an iPhone killer.

(picture borrowed from Engadget)

If you want to kill an innovative product like iPhone that has redefined what a mobile phone is, you need something very different from iPhone, not something that is somewhat different and possibly a bit better in some areas. We often talk about differences in degree vs. differences in kind. What Samsung needs is a mobile phone that is different from iPhone, not in degree, but in kind.

But the dilemma that Samsung has is that Samsung is extremely good at producing something that is different in degree, but not very good at creating something that is different in kind. Over more than a decade, Samsung competed with Sony -- trying to make what Sony makes a bit better, a bit cheaper, with some additional features. Samsung has developed its capability of being a very aggressive, fast, and competent second mover. It is able to copy its competitor's products and make them better, packing them with more features. Its products can be better, cheaper, smaller, thinner, bigger, larger ... or whatever it can possibly do with them ... than its competition.

When Samsung finally caught up Sony in 2004 in revenue and profit, it finally had a chance to define itself without invoking the image of someone else. Samsung's operating profit of $3.4 billion in 2009 was twice as big as the combined operating profits of nine biggest Japanese electronic manufacturers during the same period. Yet, between 2004 - 2010, Samsung looked hesitant, timid and reluctant in making its own bold statement through its products. I don't have data to suggest what was Samsung's internal innovation strategy during that time. However, what is becoming increasingly clear is that Samsung needs yet to develop its own capability for innovation in kind. Samsung's challenge is that the capability for innovation in kind is quite different from the capability for innovation in degree.

So, what does it have to do with Galaxy S? Well, it seemed to me that once Samsung passed Sony, it seemed not sure what to do, as it never developed the necessary capability to excel in that position. However, once Apple showed up in its radar, Samsung seems to be running with its full throttle open. Samsung finds itself in a familiar place -- chasing an innovative rival that creates innovation in kind. This allows Samsung does what it does best -- innovation in degree. Apple is now new Sony to Samsung.