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Hardware free time coming ,The Internet company or as a driving force

By Debbie Knight,2015-12-22 00:07
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Hardware free time coming ,The Internet company or as a driving force

    Hardware free time coming?The Internet

    company or as a driving force

    Recently, the news that SONY sold a PS4 consoles, will loss $60, but SONY wants through the open market first, and then by selling games and PS + services for a profit.

    In September, according to the fact, has been selling cheap e-readers and tablets, Amazon is about to launch a free smart phone, but it requires the user must use the annual fee $79 Amazon Prime service.

    This year, Letv, iQIYI, millet, alibaba launched smart TV products, but prices are lower than the industry average.They want to cut the cost of hardware, in the competitive price, and then a profit by selling content.

    In fact, as early as a few years ago, Microsoft had begun to attempt a similar pattern.In 2005, Microsoft launched the Xbox 360.The survey found that the Xbox 360 luxury version of the material cost of $525, much higher than the retail price of $399.In the case of a hardware loss, Microsoft to member, download value-added services such as payment model are adopted.

    Nowadays, more and more Internet company also gradually began to enter into the traditional hardware business, and continue to use the "money" hardware losing money, software strategy.A push by the Internet company hardware era of cheap, even free, seems to be more and more near to us.

    Why more and more companies begin to accept the "hardware loss"?

    For this problem, the amazon CEO bezos replied: "we are really in the building is a fully integrated media services. Hardware is an important element of this service, but also is only a part. We do not make a profit out of you buy the equipment, we will be in when you use it to make money."

    "Innovation should not to look at only in terms of hardware. In recent years, more than dozens of tablets, but most products almost neglected. Because they are electronic products, and people no longer need to electronic products, people need service, need to each use will have to improve service, and constantly improve the service", bezos thinks so.

    Amazon, for example, Amazon with a low to makes it impossible to believe that the price of selling Kindle series products, in order to turn the hardware into the entrance, into the hands of users as much as possible, the Kindle also provides a have books, movies, music, mobile digital market, and is tied with these services, is $79 a year of Amazon Prime program.

    From amazon's case, we can see, in the smart phone, tablet PC, e-book reader, and other industries, the quickening pace of hardware homogeneity, many companies have realised that the processor speed, screen resolution, cameras, hardware configuration, often can only ensure that temporary competitive advantage, and with the Internet gene of apple, Microsoft, amazon and other companies, will have gradually focused on the software, content and services.

    In addition, for those who have just into Internet companies in the field of hardware, the hardware design, research and development, production compared with the traditional hardware vendors, is not an advantage, brand awareness also needs to be promoted.Software, content, services, by contrast, is good at.As much as possible to reduce the product price, therefore, by price advantage into the hardware market, access to a certain number of users, and then through the software, the content and the service profit, become the Internet company deep realistic way hardware products.

    This model will be for a long time?

    Time again back to a few years ago, although Microsoft Xbox 360 pricing strategy, make SONY and nintendo for quite a long time, but the end result is a "kill one thousand, since the loss of eight hundred".Analysis points out, the Xbox 360 cumulative losses of more than $3 billion in the last few years, second only to the SONY playstation 3 losses of $5 billion.

    The field of today's game consoles, the PS4, Microsoft Xbox One and nintendo Wii U, still the continuation of the low-cost strategy.But make them embarrassed is that many users purchasing game console, just to look at movie.If such users don't buy a game, too, that these companies didn't really want to cry.

    Thus we can see, with the popularity of smartphones, tablets, the player's interest in the game host gradually reduce, in game software sales subsidies hardware mode may be more dangerous in the future.

    In addition, the analysis thinks, when Microsoft was able to adopt the strategy of cheap is one of the most important reason, which itself has a strong cash support, and SONY and nintendo financially, has already begun.But for just coming into the Internet company in the field of hardware, can play the "war of attrition hardware loss"?After all, they are facing with strong cash flow apple and Google.

    From another perspective, when the Internet companies choose to sell hardware products in this way, you should ask yourself a question: my software, content and services, the user will really buy?

    Foreign technology blog PandoDaily Amazon as described by an employee of hardware strategy: "Amazon Prime service is the core of the Amazon really. Without it, the Amazon to sell service is so hard."

    We can see that for the user, hardware cheap, is attractive, but does your software can attract users?The user will pay for the software and services you provide?Still in doubt.

    IDC's latest data show that in the second quarter of this year, amazon tablet in the United States market share of only 4.6%, while apple and samsung were 50.7% and 18.5% respectively, and the global share of amazon tablet can be neglected.

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