Ikea To Sell Electronics?

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It starts in Europe, but you know it’ll expand.

So it appears that Ikea is starting with a specialty-manufactured TV in China, and Magnus Bodesson, the guy in charge of living rooms (and who’s name may be as cool as Baldur Bjarnson and Richard Baldovin) notes the advantages Ikea has in pricing.

Ikea selling electronics actually makes sense:

  • They have the floorspace and warehouse space.
  • They do a lot of home elements that aren’t furniture despite their image as a furniture company.
  • They already promote their furniture with mockups of TVs, etc. in their stores anyway – and as they sell “complete sets,” electronics plays into it.
  • They have insanely huge reach.

So I’m pretty sure they’ll prototype this, it’ll work or break even, and they’ll go and try more.  You know who gets in trouble?

Best Buy.

Ikea could, with relative ease, throw in a lot of basic electronics and home goods.  They could do their own brands/rebrands, but it might also be easier to use local/popular brands.  They have a supply chain that works.  They have money.  People are already in a shopping mood when they come in.

So if they start moving TV’s and other home devices, Best Buy is the one that takes the big hit in my opinion.  Admittedly it’d probably take Ikea awhile to ramp this up (1-3 years), so there’s a chance for Best Buy to implode on its own.  But if they’re still playing in the home electronics space, this could be a finishing blow.

I never saw Ikea getting into this space.  Makes me wonder what else I’m missing . . .

– Steven Savage

 

 

How Amazon’s Success Destroys Itself?

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Earlier, Serdar linked to an excellent article by Baldur Bjarnson (current winner of ‘The Most Viking Name Ever’ six years running) and his fascinating analysis of Amazon’s situation and what they (or someone else) should do.

Of course I say “read the article” but part of why you come here is hard-hitting analysis, deep insight, and guys making fun of people’s names.

His essential argument is that Amazon has a surprisingly weak position, margin issues, technical issues, and strengths with vulnerabilities.  The end result could be a market like the ever-dismalifying comics market in his opinion.  His arguments are pretty solid.

However his most fascinating argument is that Amazon’s integration could destroy it.  As bookstores disappear and less publications are seen, Amazon could end up catering to a specialist audience.  It’s sad to say, but people already aren’t reading enough books anyway (in my opinion), and I can see a case where e-Books end up having issues finding audience due to lack of awareness and competition that never existed before.

I’ve chewed over this idea as it seems to fit some other models – extraction models.  Amazon runs on pretty tight margins (if not “no margins” in some ways).  This could be seen like any extraction industry, or even as a flashback to the “getting eyeballs” from the pre dot-bomb day, neither of which are exactly encouraging metaphors.  There’s already plenty of competition in the form of open formats or even that clunky but beloved format PDF.

So after reading this article, here I sit, teetering on the abyss, and wondering if Amazon actually will turned out to have messed up.  Having been through many Comic Meltdowns, the metaphor sits in my mind uncomfortably – weird variants, cool promotions, hopeful indies, price arguments, and even a narrow channel (Diamond).

– Steven Savage

 

Further Thoughts on E-Publishing And Missing Out

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Serdar brought up the point that in a way, publishers brought the Amazon mess on themselves because they resisted e-book technology. I think he had a brilliant insight, and want to expand on it further.

Let’s take a look at the whole Kindle idea. In many ways it’s a bare-bones thing (at least before the Tablet), a black-and-white-display (however with cool e-Ink), simple delivery, basic formatting. The Kindle is impressive as a unified system, but except for that e-ink, it doesn’t seem that innovative, from file format to the menu

But what Amazon did is string the links together in a chain that worked. They pushed it, they stuck buy it, they evolved it. I myself used to think the Kindle sounded ridiculous, now I own one. The Nook sounded like a runner-up, and now I not only hear great things, I have a friend who can’t put her’s down.

The iPad? Yeah.  Some issues but the big lawsuit shows Apple was big enough to talk with . . .

Of course each “link” chain should be obvious, but the Publishers didn’t  follow that.

All those publishers had money. They had technology. They had allies in book chains. They had people talking about eBooks and playing with formats.

They didn’t do anything. They left it to Amazon and Apple and Barnes and Noble. The Publishers avoided or dodged, didn’t take risks, and by and large let everyone else into the mobile space.

An alliance of publishers could have rallied around ePub. It could have backed a new device. It could have done all sorts of things. It didn’t exist and it didn’t happen.

Now what? I’ve launched books on my own, and the only reason to have a publisher is the marketing advantage (and there’s several small and mids for that). So many are exploring e-books. EVERYONE has to be on Kindle, and B&N is coming from behind (which I need to address in my own books).

It’s going to get wild, isn’t it?  Maybe people thinking of working for traditional publishing need to be thinking outside the box . . .

– Steven Savage