The Battle for the Home
Now that Facebook has joined the Battle for Homes, Ben Thompson at Stratechery compares Amazon, Apple, Google, and Facebook's Strengths and Weaknesses, their Go-to-markets, and Business Models. Finally he picks the likely losers and winners, and asks: Will it matter? Will this be a battle as significant as the one for Computers and Mobile devices?
> If the first stage of competition in consumer technology was the race to be the computer users went to (won by Microsoft and the PC), and the second was to be the computer users carried with them (won by Apple in terms of profits, and Google in terms of marketshare), the outlines of the current battle came sharply into focus over the last month: what company will win the race to be the computer within which users live?
Winners and Losers
> There are compelling cases to be made for at least three of the four companies:
> Amazon: Amazon’s head start is meaningful, and its widespread integration with other products mean it is likely that more people have a device with Alexa integration than not. The company is also highly motivated to win and has the business model to justify it.
> Google: I find Google’s case the most compelling. Product is not the only thing that matters, but it is awfully important, and Google is the best placed to deliver the best product. Its services are superior, its knowledge of users the most comprehensive, and its overall product chops have improved considerably. Yes, its go-to-market is worse than Amazon’s and it has a late start, but it is still early.
> Apple: The loyalty of Apple’s userbase cannot be overstated, particularly when you remember that the company’s userbase is the most affluent customers of all. This makes it difficult to ever count Apple out, even if their product is late and tied to the worst services.
> Facebook: It is hard to envision how Portal won’t be a loser: the company has no natural userbase, has a terrible reputation for privacy, and has no obvious business model or go-to-market strategy.
Does It Matter?
> There is one final question that overshadows all-of-this: while the home may be the current battleground in consumer technology, is it actually a distinct product area — a new epoch, if you will? When it came to mobile, it didn’t matter who had won in PCs; Microsoft ended up being an also-ran.
> The fortunes of Apple, in particular, depend on whether or not this is the case. If it is a truly new paradigm, then it is hard to see Apple succeeding. It has a very nice speaker, but everything else about its product is worse. On the other hand, the HomePod’s close connection to the iPhone and Apple’s overall ecosystem may be its saving grace: perhaps the smartphone is still what matters.
> More broadly, it may be the case that we are entering an era where there are new battles, the scale of which are closer to skirmishes than all-out wars a la smartphones. What made the smartphone more important than the PC was the fact they were with you all the time. Sure, we spend a lot of time at home, but we also spend time outside (AR?), entertaining ourselves (TV and VR), or on the go (self-driving cars); the one constant is the smartphone, and we may never see anything the scale of the smartphone wars again.