Unpacking the Week’s News: Friday, February 17, 2017

Amazon Chime Adds Value for AWS Customers Turning Amazon into a more Appealing One-Stop Shop – by Carolina Milanesi

Earlier this week, Amazon released a new video conferencing app called Chime. Chime is a managed service that runs on AWS. Users can access it through apps on iOS, Android, Windows, and Mac. Amazon Chime offers online meetings, video conferencing, voice calls, chats and content sharing. This adds to WorkMail, WorkDocs and WorkSPaces already offered by AWS. Amazon offers three service tiers:

  1. Amazon Chime Basic allows you make 1:1 voice and video calls, and to use chat and chat rooms, on all your devices. It’s a free service
  2. Amazon Chime Plus adds the ability for you to share your screen during meetings and enables integration with your company directory. It costs $2.50 per user per month
  3. Amazon Chime Pro offers the full set of features for online meetings, including scheduling, hosting, recording, and personalized meeting URLs, for up to 100 people. It costs $15 per user per month.

Amazon Chime is entering a market that has big players such as Microsoft’s Skype for Business, Cisco Spark, Google Hangouts and LogMeIn with GoToMeeting. The video Amazon is showing on their site seems to make ease of use the key proposition. That’s very smart given that ease of use is the last thing that comes to mind when you think about dialing into a group call/video with systems like GoToMeeting. This will certainly appeal to users and the aggressive price points will appeal to IT managers. While I struggle to see Chime becoming a first pick for companies that are not already using AWS, I see this as adding an important service that could make AWS a one-stop shop for some organizations.

There might also be some organizations that would want to leverage Amazon’s Deep Learning platform, Lex, to deliver chatbots within Chime. This could clearly be a differentiated offering for Amazon in the context of a one-stop shop. It also remains to be seen if Amazon wants to take a more direct approach in the enterprise when it comes to digital assistants. While Lex offers a platform for developers, Amazon might decide to deliver a “Work Alexa” to compete more directly with Cortana or Watson.

Samsung Heir’s Arrest Unlikely to Impact Sales – By Bob O’Donnell

The family heir to the Samsung group has been facing legal and political battles for some time but the situation took a turn for the worse this week when a South Korean court ordered Vice Chairman Jay Y. Lee’s arrest on bribery, perjury, embezzlement, and other charges. Embroiled in the intrigue of South Korean politics and massive demonstrations about government corruption, many leaders of South Korea’s family-owned conglomerates known as “chaebols” (of which Samsung is the largest) have been under intense public pressure for greater transparency recently.

Outside of Korea, the question boils down to how will this impact Samsung’s various businesses, notably Samsung Electronics, and the Samsung brand? Frankly, probably not much. Given the company’s surprisingly respectable smartphone shipments last quarter after the disastrous Galaxy Note 7 recall, it’s clear the Samsung brand is remarkably resilient. Potential leadership, or even structural, changes that could eventually happen at the company as the result of this arrest will likely have almost no short-term impact, and probably not much long-term impact, on the company’s sales.

The truth is, most people who buy devices from a given company don’t really know or care that much about company leadership. So, while this story may grab a lot of headlines and create a lot of bad press for Samsung, it won’t likely impact their financial results. Plus, even if there are significant changes in company structure because of this event, they would likely take years to happen, and several more years to really be felt.

On top of that, despite the fact there are many companies that have “Samsung” at the front of their name, most of these companies now operate independently. Witness the challenges that Samsung SDI, the battery maker, had with Samsung Electronics, the phone maker. In a completely coordinated single company effort, something like the Galaxy Note 7 battery issues wouldn’t occur, but SDI is just seen as another supplier by Samsung Electronics, not a division or even a sister company.

While there’s no question the latest developments for Samsung leadership are unfortunate, it’s important not to overestimate what their true impact will (or will not) be.

One of YouTube’s Biggest Stars gets Dumped – By Jan Dawson

One of YouTube’s biggest stars, Felix Kjellberg, who goes by PewDiePie on the site, was this week dumped as a content partner by Disney over several videos with anti-semitic remarks and imagery as reported by the Wall Street Journal. YouTube subsequently also dropped him from its next round of original content as part of its YouTube Red service.

Kjellberg’s problematic videos had largely flown under the radar from a mainstream perspective. Apparently, management at Disney and YouTube were either unaware of their content or considered them to be innocuous. But the high profile reporting forced both companies to act fast. Kjellberg took a couple of days to respond and then only did so with a barely apologetic video which was mostly defensive and highly critical of the news media in general and the Wall Street Journal in particular.

This blowup is indicative of the single biggest challenge YouTube faces as it tries to build a subscription business: it is entirely reliant on performers and creators who are used to being able to publish whatever they want, talk directly to their audiences without an editor, and who will continue to do so even as they collaborate with YouTube on exclusive content. In many cases, these individuals’ brands even depend on being somewhat provocative as a key asset, but that’s always a double-edged sword when it comes to entertainment.

YouTube’s challenge here is it can only directly police these personalities as part of their original content and has no control before the fact over their publicly released material. It now has to walk a fine line as it tries to work through how to ensure this doesn’t happen again while continuing to give its creators the freedom they’ve always enjoyed on the platform. Of course, in trying to build a service like YouTube Red, big stars like Kjellberg are critical – losing even one could be quite damaging to its attempts to attract its target audience and Kjellberg is the most popular YouTube star of all.

This particular incident should blow over relatively quickly, even if it takes YouTube some time to recover on the original content side and fill gaps in its offering. But the broader issues it presents will stick around – basing an original content subscription on user-generated content from highly individual performers is an inherently risky business and YouTube is finding that out the hard way.

Apple to Manufacture iPhone SE in India – by Ben Bajarin
We knew Apple was getting closer to manufacturing iPhones in India, and now details have come out they will start with the iPhone SE.

Starting with the iPhone SE is an interesting choice. Apple would know the iPhone 5s, and 4s have the largest active installed base of any models in India. This is obviously because they are the cheaper options through secondary market pricing or authorized retailers. India is a very price-sensitive market, even though the iPhone 6 has been gaining in sales of late. The iPhone SE will bring more modern technology, still at an affordable price when manufactured there. A key reason I think Apple decided to start with the iPhone SE over the 5s.

This is a key first step for Apple as they build out plans to cooperate with Indian officials to assemble more iPhone models locally and start opening some retail stores in more affluent cities like Bangalore, Mumbai, and Delhi which also happen to be a few of the cities with the largest concentration of iPhone owners.

While I’m optimistic the iPhone SE, which up to this point has not done terribly well in India, will start to sell well it is important Apple quickly begin to make new models like iPhone 7 and future, current generations as well. As much as India is price sensitive they also still appreciate innovation and the iPhone line overall will benefit once local assembly can bring all iPhone prices down.

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Carolina Milanesi

Carolina is a Principal Analyst at Creative Strategies, Inc, a market intelligence and strategy consulting firm based in Silicon Valley and recognized as one of the premier sources of quantitative and qualitative research and insights in tech. At Creative Strategies, Carolina focuses on consumer tech across the board. From hardware to services, she analyzes today to help predict and shape tomorrow. In her prior role as Chief of Research at Kantar Worldpanel ComTech, she drove thought leadership research by marrying her deep understanding of global market dynamics with the wealth of data coming from ComTech’s longitudinal studies on smartphones and tablets. Prior to her ComTech role, Carolina spent 14 years at Gartner, most recently as their Consumer Devices Research VP and Agenda Manager. In this role, she led the forecast and market share teams on smartphones, tablets, and PCs. She spent most of her time advising clients from VC firms, to technology providers, to traditional enterprise clients. Carolina is often quoted as an industry expert and commentator in publications such as The Financial Times, Bloomberg, The New York Times and The Wall Street Journal. She regularly appears on BBC, Bloomberg TV, Fox, NBC News and other networks. Her Twitter account was recently listed in the “101 accounts to follow to make Twitter more interesting” by Wired Italy.

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