The biggest challange for Microsoft, Apple, Sony, Yahoo and Amazon is yet to come: Embedded Shopping

The biggest challange for Microsoft, Apple, Sony, Yahoo and Amazon is yet to come: Embedded Shopping


The battle: The media center. The price: “Embedded Shopping”.

Imagine you watch a film on your TV and after it is finished, not the usual ad with the newest upgrade in washing powder shows up, but the TV, yes the TV, will ask you for your rating of the film. You simply push 9 on your remote and that’s it.

Because your rating was high, your TV will then ask you whether you would like to buy the DVD or the CD with the sound track. You click the green button on your remote and the DVD will be send to you the next day.

This is only a simple example of things to come. Once the convergence of PC, Broadband and TV is truly on its way, there will be very few limits in how and where we will get access to and experience photo, audio, video and how we buy it.

The natural platform for this convergence to take place is the media center. As a result the media center will become the key hub in our “converged” experience.

When we come home and flip on the PC or the TV the first screen will most of the time no longer be the desktop or the last channel we’ve watched but the media center. The Dell Media Experience, a simple scaled down but solid clone of the Microsoft Media Center Edition, has in total only about 15 different setting and one of them is whether the desktop or the media center should show at start-up of the computer.

It will then ask what we want to do through a simple menu of choices. Watch a movie, play a game, listen do music, watch a TV series, surfing or use the desktop. When you choose to watch a movie, it shows all the possible sources: DVD, recorded movie from TiVo or PVR, download, stream or rent one from Netflix, or see what movies have just started or are about to start on television.

You can both browse what is available or search you hard drive, TV listings and DVD collection and your video retailer will make an offer as well. Simply click on the green button on your remote. A mouse will still work as well.

This kind of shopping is not limited to media itself. For instance, when people show a slideshow with photos of their kids, again a simple push on the green button will trigger the photo to be printed and sent. Or when James Bond has new sunglasses, they can be ordered instantly at the end of the film from Amazon or a query on eBay can be started. You can also order it during the the film because the media center can pause the TV, DVD or download for you.

Or when watching an advertisement for new washing powder, again a simple click on the green button can be enough to get it with your groceries.

The buying process will change dramatically over traditional (on-line) shopping. In the traditional model the trigger to buy something and the actual buying process are not connected. This often leads to not buying at all or buying much later from a random supplier.

In the media center driven model, the trigger to buy and the buying process are directly coupled. Also the option to buy from are limited to those offered through the media center. The buying process and options are integrated in the media experience hence the name “Embedded Shopping”. It does not need any explanation why embedded shopping is such a powerful way of selling products, media or non-media.


The battlefield and the contenders.

With embedded shopping such an attractive price to win, the media center will become a tough battlefield with a lot of complexity and players.

Key to its success is to make sure it stays a 1 or 2 button/click process. If this is not the case selling opportunities will go lost. However more importantly the convenience element will otherwise not be high enough for consumer to give up the possibility to shop around and look for alternative preferred or cheaper providers.

This requires a high level of integration between the media center and the multiple sellers/providers.

A linking mechanism between media content and potential product offerings needs to be established. The “owner” of the media center will probably handle all the billing functions. This way a user does not have to register with every partner of the “owner” or every time he or she buys an item

Currently there are lots of players in the market. Some see the full potential but some are in it just to protect their existing business and probably not even aware of the opportunity and the related battlefield ahead.

Microsoft with Windows XP Media Center Edition probably sees it as a way to justify higher prices and another reason for users of Windows to upgrade. It also helps in the fight again Apple that has a reputation in handling media well from a user point of view. Obviously Microsoft also is going to integrate with its online music business and at some time its online video business.

PC Manufactures like Dell and HP see it as a way to support sales of higher spec machines that can handle media well. It also seems that Dell doesn’t like the idea of becoming too dependent on Microsoft with regard to media centers. They probably do not realize it is more then a tool for managing and showing the media available on a PC.

Gateway is selling an interesting line of products that combine TV and PC in one devise and therefore also has developed a media center. A pity Apple hasn’t gone that route with the new iMac G5. All it needed to do was to add a TV tuner and a remote.

Apple does not really have a media center solution but might argue that its complete OS is working like a media center. A nice claim but TV is missing. I think that Apple will soon come out with some sort of media center add-on if only to enable access from a TV with remote control.

Going further, I think that at some point Apple will come with a very integrated wireless streaming concept for TV, computer, on-line video store pulled together by a media center. A sort of iPod / iTunes solution but then for video and integrated with the TV.

Talking about wireless streaming, Philips Electronics is also in this market. Realizing that in order to sell TVs and radios in the future, integration with PCs will become an important buying criteria Philips has developed its line of Streamium products. The idea is that all components can work seamlessly together with no wires and with no set-up issues. To support this they have developed a media center.

Interestingly they partnered with Yahoo to deliver streaming video content (video clips) at the tough of a button. A sign of things to come.

Just as interesting is the fact that Philips recently started selling PCs again. These PCs are also Streamium products of which Philips claim that they work seamlessly with their TVs, radios and MPs players. True or not, their intend is clear. Convergence requires simple and easy solutions.

This is a general trend that they have recognized and that is also supported by their new Sense and Simplicity campaign. Others have already played well to this trend, TiVo and Apple with iPod / iTunes.

Sony has been a laggard so far but probably will come up with something soon. This will suddenly put Apple, Sony and Philips in one ring. Of course each with their own image and following but there will be an audience that generally likes well designed, easy to use, high quality, higher priced branded products that will be looking at all three.

For hardware companies not having a successful media center solution can seriously damage the sales of both TVs and PCs of these manufacturers. They therefore might also choose to partner with companies like Microsoft and give up their change of embedded shopping just to protect their existing business.

Then there are a number of smaller players like Showshifter and Snapstream that have developed media center software including TiVo like features. There are even free solutions available like TVOON all providing more or less the same as Microsoft’s Media Center Edition and even offer integration to P2P networks and add blocking.

Companies like TiVo and Netflix obviously also want to part of this market place. TiVo is on the cutting edge of embedded business. They soon will start showing their own ads while users rewind or forward and have embedded type features to add shows to the recording list with one click. They also automatically start recording programs based on your past behavior. Add Netflix as they plan to do and you have embedded shopping for DVD rentals.

The problem for these small companies is that the technology is not that hard to copy and despite a loyal following their penetration of the total potential market is still low allowing big hitters to catch up quickly.

Big on-line retailers like Amazon and Walmart.com of Wal-Mart will want to partner with those players that have the most interesting media center audience. The media center providers can also enhance the user experience by partnering with the best on-line retailers.

Companies like Yahoo will also want to join in somehow just to keep a high share of the attention to their site.

Cable and satellite companies will also want to join the party as well as the big film studios to assure their products get first rank shelf space on the media center.

And finally maybe even Google can join in with an integrated Google Media search function.


All together in interesting group of contenders in a complex and largely unknown battlefield called media center were for some the price is the media center itself but for the big ones it is the embedded shopping that it enables.

Forbes 2000 The World's Leading Companies

2004

The Forbes 2000 is our new comprehensive ranking of the world's biggest companies, measured by a composite of sales, profits, assets and market value. The list spans 51 countries and 27 industries. Collectively, the Forbes 2000 account for a healthy chunk of global business: Aggregate sales are $19 trillion; profits, $760 billion; assets, $68 trillion; market value, $24 trillion; and worldwide employees, 64 million.

http://www.forbes.com/lists/2004/03/24/04f2000land.html

Google ripe for a fall

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BD62F9BF0%2DD012%2D4E7A%2D8E12%2DDA25FA07B282%7D


NEW YORK (CBS.MW) -- Once buying stops working, selling usually starts.

It's been less than four months, and the initial public offering of Web search engine Google has recaptured the imagination of those who have been searching for the lost Internet boom.

The $200-plus price targets some analysts have slapped on the stock has reminded many of the $400 price target Merrill Lynch had put on Amazon.com and the $1,000 target the former PaineWebber placed on Qualcomm back in the good ol' days. See Upgrades/Downgrades.

Google shares (GOOG: news, chart, profile) actually made it above $200 in intraday trading (Nov. 3 high of $201.60), but could never actually close above that mark (the high close was $196.03 on Nov. 1). While the stock has pulled back since and still trades above most analysts' price targets, there are some technical indicators that suggest investors are using the dip as an opportunity to buy the stock.

However, there are even more signs that suggest that the buying won't work in the near-term, and that an ever deeper pullback is imminent.

Google's technical storm

Google's stochastics indicator -- a two-line "mathematical" technical indicator that compares the stock's closes relative to its intraday highs and lows -- has been putting in a pattern of higher highs and lows since the stock first pulled back from the $200 level. Read more about mathematical indicators.

After bottoming out at just above 7 on Nov. 8, the slow stochastics ran up to 80 on Nov. 15, fell back to just above 14 on Nov. 22 before climbing to a high of nearly 94 on Nov. 30. See interactive java chart and change a lower indicator to "slow stochastics."

By itself, it might appear bullish since it indicates the stock has been consistently able to close near its intraday highs on up days, a behavior which usually suggests underlying strength by the bulls.

But you also have to see what the stock has actually been doing over the same time period to put the indicator's moves in perspective.

And over the same time, the stock has established a pattern of lower highs and lower lows, which together are necessary and sufficient components of a downtrend.

The stock had bottomed at $165.27 on Nov. 9 before rallying to a high of $189.80 on Nov. 12 (the stochastics reached a high of 80 a day after). It then fell back to a low of $161.31 on Nov. 21 before reaching a high of $183 on Nov. 30 (the stochastics reached 94).

The divergence between the stochastics and the actual stock price is considered bearish, because it suggests the stock is becoming "overbought" and progressively lower levels.

Buyers keep buying, but the stock isn't going up.

There is another technical indicator that is also pointing to weakness.

The relative strength index (RSI), an oscillating indicator that compares up days and down days over a specified time period, has been declining along with the stock price. It reached just over 62 on Nov. 15, but couldn't quite make it to 60 when it topped out on Nov. 30.

Also, the inability of the RSI to get above 60 is also bearish (the RSI isn't considered overbought until it rises to the 75 to 80 level). Prior to Google reaching its high, 60 had been support for the RSI while it made several probes above the 80 level.

This suggests that it has been taking a lot more energy to move to the stock higher than it has to move it lower.

On Friday, the stock closed up $1 at $180.40, but had been down as much as $1.80 at a low of $177.60 in intraday trading. While the bounce might suggest strength, the intraday slide, coupled with weak technical readings, suggests the stock has become vulnerable to a quick strike by the bears.

Finally, Friday's intraday high of $181.06 was below Thursday's high of $181.51. How much longer will bulls be willing to fight without getting anything to show for it?

'Gaps' should cushion any slide

If the stock were to begin to slide, there should be decent support at the opening in the chart between the Nov. 24 low ($172.51) and the Nov. 23 high ($170.83).

These types of upside "gaps," which serve as launching points on the way up, usually provide a cushion when revisited as anyone that sold ahead of them, and were abandoned by the stock's surprise leap higher, may be tempted to cover their open positions when given the chance to escape mostly unscathed.

There should be even stronger support at the gap between the Oct. 22 low ($164.08) and the Oct. 21 high ($150.13). This was the "gap" that changed the stock from one moving steadily higher to one that charged aggressively towards the $200 mark.

Given the recent pattern of lower lows, however, the support at the latter gap is the better bet to become the target for bears.

It would take a close above $183 -- that would break the pattern of lower highs -- as well as a rise in the RSI above 60, to neutralize the short-term outlook.