Now everyone is doing everything. And who can blame them? It’s so cheap, on a relative scale, and it isn’t even that hard, all things considered. It’s not like launching a spacecraft, for instance. Besides, it’s mobile, and mobile is where it’s at, and where it’s going. Google is making devices with location based customized search. Google is making NFC-based home entertainment units. Microsoft is rolling out tablets and Facebook is considering a phone. Apple has been there all along, and so Apple has to think about social and about search apps and the cloud. Everyone is thinking about that, and many are offering up their infrastructure as a service.

These observations are thrown together as such because of themes that emerge out of the mix. Some of these themes explain, and others are in result. Some just happen to be there and are worth a mention. For example, take the pattern of increasingly integrated hardware and software, particularly in mobile products. Apple introduced this tactic to some ridicule (which many now forget), and it has proven successful. While the competition has tried and is still trying to figure out how to monetize mobile – advertising is not quite it – Apple has figure it out. It is hardware sales. Now everybody.

The second-best way to monetize mobile perhaps is commerce. This isn’t only mobile offers, although that too, but also other services, by subscription or otherwise. Foursquare is in that mix, as is Groupon, as is Square and other payment service providers, and one wonders if – or rather when – these will be acquired… and integrated… into someone’s device. Apple has drawn up a sort of blueprint there as well, because mobile commerce integrated into mobile devices is more or less the definition of iTunes. No? Only a matter of time before that becomes a ubiquitous payment solution. There have been rumblings.

All of which leads us to a couple of other subjects of interest. If the pattern of integration, overlap and parallel direction should continue in linear fashion – but these things never do – then the result may be an increasingly segmented (rather than open) ecosystem. Each with its own device, its embedded network, its set of commerce applications, which won’t necessarily communicate across platforms. (Is Twitter’s disconnect with LinkedIn an early sign? Is Apple’s removal of Google Maps in favor of its own product another example?) Should this occur – but these things are hardly ever so cut-and-dry – consumers will have to pick favorites, and this will not be different, perhaps, from the selection of broadband or cable or telephone service provider.

The distinction between content and distribution – implied in the cited instances of distribution – would seem to favor premium content, particularly in an environment of integrated networks that resemble one another more and more. As content itself struggles to differentiate in an increasingly fragmented arena, maybe this too will be integrated at some point, maybe this too will turn exclusive to the network. That is a guess, only a guess, and not even that, more like a statement of possibility, but it follows the same general pattern of overlap and parallel paths and combinations. It also follows another theme, which has been silent but a basis to all the preceding observations:

An open environment is limited by economics, and a self-imposed deflationary system (in an otherwise inflationary market) at some point will be forced to change course. Salaries and the rent have to be paid, investor returns must be generated, cash, at some point, does have to flow. Optionality, at some point, does expire, and there’s an underlying asset that determines its exercise value. In a competitive field in which participants resemble one another more and more, so should their respective valuations. This last remark is one to which we may return at some point, after the dust begins to settle.


Comments are closed.