For Device Makers, Services After Sale Are Now Key
Once upon a time hardware makers could introduce a new device, give it an operating system and a few basic applications, and leave it to others to provide the content and services to play on them. Not anymore. These days, devices without a native content service attached is going naked and unarmed into the competitive fray.
Yesterday, Barnes & Noble introduced two new tablets, an upgraded 7-inch Nook for $199 and a new 9-inch model for $269. The big news, though, was that B&N went and built its own mobile video service (perhaps with some help from Microsoft) to support the new hardware, rather than rely on third-party services like Netflix or CinemaNow to provide the content.
It’s a familiar arrangement. The iPad has iTunes; Amazon has built a robust content ecosystem around the Kindle Fire; Google rolled its haphazard collection of app stores and content services into Google Play for the rollout of the Nexus 7 tablet. Microsoft is yet to reveal what content services may come bundled with its Surface tablets, but as CEO Steve Ballmer recently told the Seattle Times, Microsoft sees its future “as a devices-and-services company.” It would be no surprise to see the Surface come bundled with a mobile version of Xbox Live, if not initially then soon.
The big question is where the new breed of device-based content ecosystems will leave standalone services like Netflix, Hulu Plus or Pandora? As content consumption shifts inexorably to mobile devices, and mobile devices increasingly come with their own software ecosystems, services without native hardware support could find themselves on the outside looking in.