Amazon’s Next Big Thing: Its Own Smartphones
By · CommentsFiled under: Technology, Microsoft, Nokia, Research In Motion, Apple, Amazon.com, Stocks in the News
When it comes to gadgetry, Amazon.com (AMZN) has become an surprising rock star.
When it rolled out the original Kindle in 2007, bibliophiles argued that cold screens would never replace the warmth of curling up to a good book. Then Amazon went on to sell millions of e-readers.
When it turned its attention to full-featured tablets, no one had any luck competing against Apple's (AAPL) iPad. Sales tracker NPD Group reports that tablet sales in this country from January through October amounted to a mere 1.2 million non-iPad units. Then came this month's Kindle Fire. Orders have been so brisk that suppliers are telling Taiwan's Digitimes that the e-tailer has bumped its production order to a whopping 5 million units.
With skeptic-thumping results like that, who would doubt Amazon's next gadget endeavor?
What's that? Amazon may be branching out into smartphones next year? Wow.
Jeff Bezos Calling
Citigroup analyst Mark Mahaney suggests that Amazon may roll out its own wireless handset in time for next year's holiday shopping season.
This isn't just a stock analyst dreaming out loud or connecting the logical dots. Mahaney's head-turning prediction comes after conducting supply chain channel checks in Asia. Component makers can be pretty chatty when they're off the record, so there's some serious weight here.
This doesn't mean that consumers will get an Amazon smartphone. A year is a long time, and prototypes being produced now can be easily dismissed later. Market conditions may change. Amazon may decide to move in an entirely different direction. However, for now it does seem like it will in fact happen.
An Amazon smartphone will be interesting, but it won't be a slam dunk.
Handing It to the Handsets
It isn't easy to be in the wireless market these days.
Research In Motion (RIMM) has 70 million active BlackBerry accounts, yet analysts see it as a loser. Nokia (NOK) remains the global leader, yet its future smartphone prospects are so dicey that it agreed to champion Microsoft's (MSFT) mobile operating system instead of its own in exchange for a tidy sum of money.
If it's not Apple's iOS or Google's (GOOG) Android, a smartphone is pretty much toast these days.
Thankfully an Amazon smartphone would be fueled by a modified version of Android. It's the approach that Amazon took with the Kindle Fire, so why not?
In fact, an Amazon smartphone would probably look and feel a lot like a miniature Kindle Fire, leaning on Android apps, Amazon's proprietary Silk Web browser, and the online retailer's rich ecosystem serving up books, movies, music, and games digitally.
Serving Two Masters
Amazon sells plenty of wireless devices right now. In fact, the virtual store operator turned heads this holiday shopping season by offering all of its non-iPhone smartphones at $0.01 each with two-year wireless contracts through Cyber Monday.
What will happen next year, when Amazon's promoting its Ama-phone, Kindle Phone, or whatever it will be called on its front page? Will other manufacturers feel jilted?
Probably not. Amazon, after all, sells other e-readers and tablets. Amazon knows that it will never be the only flavor even among its own shoppers.
Amazon has too much at stake at this point not to take the next evolutionary step in its gadgetry rollouts.
Amazon laptops or smart TVs may make sense down the line, but a smartphone is the clear companion to the new Kindle Fire and perhaps even the original Kindle e-reader, though getting folks to enjoy long-form literature on a small phone screen will be a challenge.
Another meaty issue is if Amazon's phone will debut on a single carrier -- the way that the iPhone did in 2007 -- or if it aims for broader wireless coverage. The no-brainer answer would be to shoot for all major carriers, but there's always the possibility that it will snag sweet terms with a single carrier willing to pay up for exclusivity.
The Best Reason to Take Amazon Seriously
When pros cracked open the Kindle Fire earlier this month, they came to the conclusion that its components cost more than its $199 price tag. How can Amazon sell tablets at a loss, something even Apple would never dream of doing? It plans to make back the loss -- and then some -- though digital purchases. Obviously, an Amazon phone will plug right into Amazon's digital storefront.
Amazon has already taken the revolutionary step of selling a cheaper Kindle e-reader model to folks willing to accept ads -- another way for it to subsidize the price of a phone before we even get to the meaty wireless carrier subsidies. In short, Amazon can give smartphone shoppers the most bang for their buck because it can monetize its gadgets in ways that traditional handset manufacturers can't.
Amazon's going to be a winner in this space. Good luck wagering otherwise: History is not on the side of skeptics here.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, though he does own a Kindle Fire and an iPad. The Motley Fool owns shares of Google, Microsoft, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Google, Amazon.com, and Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple.
Filed under: Technology, Retail
This Black Friday, here are a few things to whet your bargain-hunting "app"-etite: 5 mobile apps designed to help you nab deals during the holiday weekend shopping bonanza.
1. Shopcade has launched what it calls a personalized, social shopping app within Facebook that allows users to discover, shop and share products from 20,000 brands from the U.S. and Great Britain -- from fashion and beauty products to tech goods -- while earning cash rewards.
Consumers can create their own "Shopcades" -- fluid lists of their favorite products -- which they share with Facebook friends. When one friend buys from another's Shopcade, both get rewarded with real cash. "There are two options for the cash reward: Consumers can either collect it via PayPal or donate to charity," a spokeswoman says.
2. Walgreens (WAG) is adding scannable coupons to its apps for the iPhone, iPad and iPod touch, offering exclusive discounts to its mobile device-wielding customers beginning Black Friday.
"Mobile couponing allows our customers to simply go to a store and save on select items without having to clip or print coupons," says Jim Cohn, media relations manager for Walgreens.
3. PriceGrabber.com, the price-comparison and online-shopping site, has updated its free iPhone, iPad and Android app for the holidays. In addition to hunting down the lowest price on millions of products from online merchants and sellers, the PriceGrabber app now also offers shoppers 100,000 coupons in their geographic area, says general manager Graham Jones.
The new DealGrabber iPhone app finds local daily deals in your area, "down to where you're standing," from group-buying sites like Groupon and Living Social, says a spokeswoman.
4. Bradsdeals.com has updated its Black Friday By BradsDeals iPhone app to include a feature that lets shoppers view pre-release Black Friday ads for major stores, handpicked Black Friday deals, and map out the stores and products they want to hit. "Essentially, it lets you take your Black Friday research with you," says Brad Wilson, CEO and editor-in-chief of BradsDeals.com.
5. Slice for the iPhone,while not a deal-hunting app, is designed to help you organize your shopping expeditions. The free app tracks your online shopping history and product shipments, automatically culling the information from electronic receipts in your email -- from product tracking numbers to shipping notifications. It then compiles the data for easy reference, putting all your past purchase information at your fingertips.
Nokia Smartphones Finally Attracting Some App Love
By · CommentsFiled under: Technology, Google , Microsoft, Nokia, Research In Motion, Apple, AT&T
Nokia (NOK) smartphone users starving for app extras may finally get some new toys for their handsets. Developers who previously stuck to creating apps for Apple's (AAPL) iOS and Google's (GOOG) Android mobile devices are probably going to branch out.
Developers appear poised to add a third mobile operating system platform to their efforts, according to a recent survey by Appcelerator and IDC, thanks to Nokia's bold partnership with Microsoft (MSFT) earlier this year to use Windows Phone 7 on its smartphone line-up and the introduction of its sleek Lumia 800 Windows smartphone eight months later.
Yes, We'll Do Windows, Say Developers
Of the 2,160 Appcelerator developers surveyed, 38% said they were "very interested" in developing on the Windows Phone 7 platform, an increase of eight points and the highest level of interest for the Redmond giant ever, according to the report. Meanwhile, Microsoft's mobile rival Research In Motion (RIMM) saw developer interest in its BlackBerry OS fall seven points to 21%.
When the survey drilled deeper into developers' interest in Windows Phone 7 compared with a year ago, the report found:
"A plurality (48%) are saying it is the Microsoft/Nokia partnership. Nokia also received high marks for its new Lumia Windows Phone 7 smartphone announcement last month. Twenty-eight percent of developers said they are 'very interested' in developing for the device. This is more than double the interest in Nokia's own Symbian and MeeGo OSes since Appcelerator began reporting mobile platform interest in January 2010."
With those figures, Windows Phone 7 jumped over the BlackBerry OS to land a decisive No. 3 spot among developers, behind Apple's iOS and Google's Android, according to the report.
New Game for Nokia
Over the years, Nokia has seen its smartphone market share shrink from the mid-to-high-40% range to 27.1% in the third quarter, according to IDC figures. The decline began in 2008 and by 2009 the popularity of the iPhone and Android devices took hold in a big way, says Scott Ellison, vice president of mobile and connected consumer platforms for IDC.
Of course, developers followed, especially those fed up with Nokia's reputation for being slow to launch new iterations of its phones and its "creaky" Symbian OS.
Nokia has tried enticing developers. Earlier this year, for example, Nokia and AT&T (T) held a "Calling All Innovators" contest, offering $10 million in prizes to winning apps and mobile games developers who focused their software on North American consumers.
The recent survey results indicate that developers are turning around on their views of the company, and with any luck, Nokia's fortunes and consumer attraction will follow.
What It Means for Nokia Users
As a result of the No. 3 spot, Nokia smartphone users should expect more consumer-centric apps for their devices in the near future, says Ellison. "Most mobile developers work in two platforms but usually no more than four," Ellison said.
Prior to landing the No. 3 spot among developers, Nokia was often in a neck-in-neck battle with Research In Motion's BlackBerry OS or Microsoft's Windows Phone, before it partnered with the software giant. In announcing its deal with Microsoft earlier this year, Nokia said it would step away from its longtime use of its Symbian operating system.
And while Microsoft has a reputation of attracting developers who focus more on business-related apps, Ellison believes Nokia's Windows Phone 7 devices will easily attract developers interested in consumer-focused apps, such as games, social-networking, or e-commerce applications. The survey was comprised of 63.8% consumer apps developers and 36.2% business-related developers.
Ellison notes that Nokia is also keenly interested in growing its consumer presence and is gunning for the same customers who would otherwise purchase an iPhone or Android device. A wide variety of apps can help push a smartphone sale, says Ellison, who ranks the availability of desired apps as the third top reason a consumer may select a particular phone.
Zynga, for example, does not currently have a version of its wildly popular FarmVille game that supports the Windows Phone 7 platform. It does, however, make FarmVille versions that support the iPhone, iPad, iPod touch, and various Android devices, such as Motorola Mobility's (MMI) Droid X.
Whether Nokia's recent switch to Windows Phone 7 and its Lumia 800 introduction will entice Zynga to rollout a FarmVille version that supports Nokia phones remains to be seen.
Motley Fool contributor Dawn Kawamoto does not own any stock in the companies listed.
Filed under: Technology, Google , Apple, Amazon.com, Barnes & Noble
As early adopters crack open their Kindle Fires this month, the rest of the country is watching. Is Amazon.com's (AMZN) new $199 gadget as good as the $499 iPad 2 or the $249 Nook Tablet?
After playing around with the Kindle Fire for a couple of days, I have no problem recommending it as a quality entry-level tablet. Money's tight this holiday shopping season, and if junior can be talked out of an iPad and into a Kindle Fire, then we're talking about a few extra bills that can be paid.
And you really do get a lot of bang for your buck, largely because Amazon is one of the few tablet makers that can afford to sell its tablet for less than it reportedly costs to make. Amazon can take a hit on the $199 price because it expects to make some serious money through its rich ecosystem that delivers digital downloads of books, music, videos, and games.
However, just to make sure that we cover all of the potential resistance to Amazon's attractively priced gizmo, let's go over the five things that may remove the Kindle Fire from your holiday shopping check list.
1. There's No Camera
I sat next to a tourist on a duck boat tour through Boston this summer using his iPad 2 as a camera. He looked ridiculous. The form factor of Apple's (AAPL) otherwise awesome tablet doesn't lend itself to casual photography. However, that's not the reason why the iPad 2 has not one -- but two -- cameras.
The iPad's cameras come primarily into play for video chatting through Apple's FaceTime platform. Most tablets, netbooks, and laptops come with cameras so folks can video chat through Skype or just for basic video blogging.
The lack of a camera won't be a deal breaker to most buyers, but if you wanted a pair of Kindle Fires to communicate with a faraway friend or relative, you're out of luck.
2. There's No Microphone
The Kindle Fire has reasonably adequate internal speakers, but there is no microphone.
This doesn't seem like a big deal, but it is -- and it will be. Creating voice memos and interacting with some music apps require aural input. The Kindle Fire doesn't have that.
There's also Siri to consider. Apple raised the bar in October with the Siri digital assistant in the new iPhone 4S. You've seen the commercials. "What does a weasel look like?" "Tell my wife that I'm going to make it." Google's (GOOG) Android will eventually catch up, and as an Android-powered device it should just be a software upgrade. Unfortunately, without a microphone, it will never happen on the Kindle Fire.
You can also kiss voice calls through Skype goodbye.
3. The Screen Isn't as Big as the iPad's
By the numbers, there may not seem to be much difference between the iPad's 9.7-inch screen and the Kindle Fire's 7-inch display, but do the math to find the true area, and the numbers become 45 square inches and 21 square inches: That's right -- the Fire's viewing surface is less than half as large.
This may not be that bad. Tech-savvy users have grown used to playing games and streaming video clips on even smaller smartphones. The Kindle Fire would be an upgrade over those. Having a smaller, lighter tablet that you can hold in one hand also makes it more portable.
There was chatter this summer that Amazon would be rolling out a 10-inch version of the Kindle Fire at a slightly higher price point next year -- and Apple can always roll out a cheaper, smaller iPad -- but consumers need to deal with the tangible choices that they have now.
4. There's No 3G Connectivity
The Kindle Fire -- and Barnes and Noble's (BKS) Nook Tablet -- only come in WiFi models. There are no versions that come with 3G chips for perpetual connectivity when the user leaves a WiFi hotspot.
This will be a roadblock for many buyers, but let's not forget the even wider price differentials here. The 3G iPad begins at $629, so that's already more than three times the price of a Kindle Fire. Wireless carriers also charge hefty monthly charges for 3G access.
The popularity of mobile hotspots like the MiFi and smartphone tethering also make 3G tablets less necessary.
5. The Kindle Fire Is Not the iPad 2
Surfing the web, streaming video, listening to music, and countless other tablet functions are similar. The Kindle Fire doesn't have some of the built-in apps that Apple's iOS devices have, such as email readers, weather forecasts, and calculators, but these are software upgrades that will come over time.
There is a material difference in the number of available apps. There are now hundreds of thousands of apps available through Apple's App Store, while Amazon's modified marketplace only has access to thousands of Android apps. However, most of the more popular ones will continue to be made available for both devices.
For some, it may come down to the lack of the bitten Apple logo. Even if the differences in functionality aren't factors, some folks will be too smitten with the Apple brand to trade down to a cheaper tablet.
But Look at the Price Tag
Then again, when it's you paying the $300 difference, the Kindle Fire suddenly begins looking that much more appealing.
There are other Kindle Fire shortcomings. There's no GPS for location-based functions and the lack of a gyroscope will impact gaming options. The Kindle Fire also has less storage capacity than both the iPad and Nook Tablet. And, yes, even the battery life is a little shorter on the Kindle Fire.
Obviously there will be trade-offs that come with the significantly cheaper price. However, in these price-conscious times Amazon's new gadget is going to be a big winner this holiday season.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, though he does own a Kindle Fire and an iPad. The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Google, Apple, and Amazon.com. Motley Fool newsletter services have recommended creating a bull call spread position in Apple.
Gates Testifies in $1B Lawsuit Against Microsoft
By · CommentsFiled under: Technology, Microsoft
SALT LAKE CITY (AP) - Microsoft's (MSFT) Windows 95 rollout presented the most challenges in the company's history, leading to several last-minute changes to technical features that would no longer support a rival software maker's word processor, Bill Gates testified Monday in a $1 billion antitrust lawsuit filed by the creator of WordPerfect."We worked super hard," the Microsoft co-founder said. "It was the most challenging, trying project we had ever done."
Gates was the first witness to testify Monday as Microsoft lawyers presented their case in the trial that's been ongoing in federal court in Salt Lake City for about a month. He is to return to the stand Tuesday.
Utah-based Novell Inc. sued Microsoft in 2004, claiming the Redmond, Wash., company violated U.S. antitrust laws through its arrangements with other software makers when it launched Windows 95. Novell says it was later forced to sell WordPerfect for a $1.2 billion loss. Novell is now a wholly owned subsidiary of The Attachmate Group, the result of a merger that was completed earlier this year.
Gates said Novell just couldn't deliver a Windows 95 compatible WordPerfect program in time for its rollout, and its own Word program was actually better. He said that by 1994, Microsoft's Word writing program was ranked No. 1 in the market above WordPerfect.
Gates called it an "important win."
He testified later that Microsoft had to dump a technical feature that would have supported WordPerfect because he feared it would crash the operating system.
"We were making trade-offs," he said.
Novell argues that Gates ordered Microsoft engineers to reject WordPerfect as a Windows 95 word processing application because he feared it was too good.
WordPerfect once had nearly 50 percent of the market for computer writing programs, but its share quickly plummeted to less than 10 percent as Microsoft's own office programs took hold.
Microsoft lawyers say Novell's loss of market share was its own doing because the company didn't develop a Windows compatible WordPerfect program until months after the operating system's rollout.
Novell attorney Jeff Johnson has conceded that Microsoft was under no legal obligation to provide advance access to Windows 95 so Novell could prepare a compatible version. Microsoft, however, enticed Novell to work on a version, only to withdraw support months before Windows 95 hit the market, he said.
Microsoft lawyer David Tulchin said Gates decided against installing WordPerfect because it couldn't be made compatible in time for the rollout. He argued that Novell's missed opportunity was its own fault, and that Microsoft had no obligation to give a competitor a leg up.
"Novell never complained to Microsoft," Tulchin said during arguments Friday. "There's nothing in the evidence, no documents."
Johnson maintains Novell was tricked in violation of federal antitrust laws so Microsoft could monopolize the market.
"We got stabbed in the back," he said.
Microsoft's arguments for a dismissal of the case were set to resume Monday afternoon.
Throughout arguments Friday, U.S. District Judge Frederick Motz openly expressed doubts that Novell's claims had merit.
"I don't see why I have to give a product to a competitor so he can beat me," Motz told Novell attorneys.
Gates, a billionaire, began by testifying about Microsoft's history. He was just 19 when he helped found the company. Today, Microsoft is one of the world's largest software makers, with a market value of more than $210 billion.
"We thought everybody would have a personal computer on every desk and in every home," Gates said. "We wanted to be there and be the first."
Is Amazon Prime Preparing for a Price Hike?
By · CommentsFiled under: Technology, Amazon.com, Retail
It may be the best deal in town for active online shoppers. Amazon Prime -- Amazon.com's (AMZN) loyalty shopping club -- charges customers $79 for unlimited two-day shipping of Amazon-warehoused merchandise. The Wall Street Journal is now wondering if Amazon will have to juice up its membership rate given escalating costs as it tacks on digital freebies.
Freebies Galore
Earlier this year, Amazon began offering some of the streaming video content that it typically sells on a piecemeal basis as part of a digital smorgasbord made available to Prime subscribers at no additional cost. The selection isn't all that great, but it was perfect timing for the e-tailer. Once Netflix (NFLX) revealed this summer that it would no longer offer free streaming to its DVD-by-mail subscribers, Amazon suddenly became the best "at no additional cost" buffet this side of Las Vegas.
Piper Jaffray analyst Gene Munster estimates that Amazon has spent roughly $350 million this year in beefing up its Amazon Prime catalog to 13,000.
Amazon also introduced the Kindle Owners' Lending Library last week, offering Prime members free monthly Kindle book rentals. Once again, Amazon is paying publishers for books that it will be using to reward its best customers.
Is this a sustainable model, especially as Amazon tacks on more virtual goodies?
Prime Time in Seattle
Amazon has never told us how many customers are on the program, outside of a passing reference to "millions." The typically chatty Amazon can be pretty secretive that way. The Kindle has been out since 2007, and the e-tailer has yet to reveal its actual sales metrics.
It wouldn't be a shock to learn that Amazon Prime is in fact a loss leader. Amazon can afford to take a small hit there, knowing that it will make that back in the actual sales. However, there may come a point where annual rates will have to inch higher to match Amazon's growing overhead.
The timing of the hike and its actual execution will be important.
Don't Write Off $79 Just Yet
Throw me into the camp of those who believe that Amazon is unlikely to move its Prime pricing higher. It's clear that Amazon's digital outlays are growing in support of the program, but let's think about this logically.
Someone borrowing a Kindle book at no additional cost is someone who won't be taking advantage of free two-day shipping on that book. Someone streaming one of the 13,000 videos -- and counting -- from Amazon's catalog for Prime members may be one fewer person buying DVDs.
In other words, beefing up its online media is a way to get folks relying on fewer physical shipments from Amazon to continue paying $79 a year for membership. It's a brilliant move on Amazon's part, and it's also why Amazon is unlikely to get "millions" of members to begin weighing their purchases if they have to justify a future increase.
As big as Amazon is, the retailer's net sales have grown faster than e-commerce as a whole since the introduction of Amazon Prime. It works. Amazon is unlikely to mess with that pricing model -- for now.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, except for Netflix. Motley Fool newsletter services have recommended buying shares of Amazon.com and Netflix.
China’s New Supercomputer Means Business
By · CommentsFiled under: Technology
President Obama appeared jointly with Australia's prime minister at a press conference Wednesday. Announcing the deployment of 2,500 Marines to Australia, the president said the troops are coming to help "maintain the security architecture in the region." The backstory here is pretty clear: The U.S. is responding "in the region" by sending troops to counterbalance a strengthening, and often bellicose, China. Yet when reporters pointed out the obvious to him, the president responded: "The notion that we fear China is mistaken."
But maybe we should fear China, at least just a little bit.
The Real Red Threat to the U.S.
No one is saying a Chinese invasion of the U.S. Pacific Coast (or Australia or even Taiwan) is imminent. Nor is this about China's oft-reported (and even more oft-denied) participation in the epidemic of computer hacking that is making U.S. government and corporate firewalls look like so much electronic Swiss cheese.
But America does owe China the kind of wary consideration that any economic actor should accord to a savvy, aggressive rival. Because even if China owned not one tank, missile, or stealth fighter jet, this country would still be a threat to America's economic dominance.
It was just a few months ago that China made a major push to join the U.S. as a "space power" when it launched the Tiangong 1 space station module into Earth orbit. Earlier this month, the country took a second step into space when it successfully launched and then docked a Shenzhou 8 spacecraft with the new station. And though not currently habitable, this rump space station is considered the first step in China's launching a wholly Chinese-owned rival to the International Space Station.
China's race to space is the story grabbing all the headlines these days. But if you ask me, it's China's down-to-earth move into semiconductor country that should worry investors most.
Coming to a Laptop Near You: Supercomputer Parts
In 2010, China shocked the world with the news that this still-industrializing country had just built the world's fastest supercomputer. Then last month, China released news that was even more significant: It just finished building a Sunway BlueLight MPP supercomputer that, although not the world's fastest, is built entirely from domestically produced parts.
Last year, China needed help from Intel (INTC) to give its Tianhe-1A supercomputer a bit of Western-tech oomph. This time The Chinese did it all on their own. Not a single Intel or Advanced Micro Devices (AMD) chip went into the Sunway. Instead, the Sunway uses domestically invented and produced ShenWei SW-3 chips -- 8,700 of the buggers, which, when linked together, are capable of performing 1,000 trillion calculations per second.
That would be a mistake.
Sure, supercomputing these days is more about bragging rights than about big business. IBM (IBM) has basically exited the supercomputing business, abandoning it to the likes of Cray (CRAY).
But what about the rest of us?
Bragging rights aside, the real import of China's Sunway announcement doesn't just concern supercomputers, but rather the humble desktop or laptop PC that you're probably reading this column on.
If China can build homegrown chips powerful enough, and reliable enough, to outfit even a welterweight "super" computer, then what's to prevent it from building chips powerful enough, reliable enough, and cheap enough to totally destroy the market share of Intel and AMD? China already does the assembly on 110% (it sometimes seems) of American PCs, after all. How much longer will it be before the perpetually profit-margin-starved Hewlett-Packard (HPQ) and Dell (DELL) -- I assume Lenovo is a foregone conclusion -- begin scarfing up cheap chips for their comps from China?
Motley Fool contributor Rich Smith holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of IBM and Intel and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Dell and Intel, and creating a bull call spread position in Intel.
Filed under: Technology, Sears Holdings, Wal-Mart Stores, Retail, eBay
Retailers anxious to lull shoppers into a holiday spending daze are debuting a new experiment in simulation: the "real" online store. On Nov. 1, Walmart (WMT) launched two pop-up stores in San Diego and Los Angeles malls, where, instead of stroking the fabric of sweaters and sheets, shoppers can browse Walmart.com on tablet and laptop screens.
Walmart claims that "real" online shopping is convenient, combining the limitless inventory of the Web with help from knowledgeable sales staff. Some locals aren't buying it. One San Diego shopper points out that you have to pay to park at the mall, which costs more than shipping, "So what's the point?" he writes on the website of the San Diego Union-Tribune. Actually, shipping will cost you, too -- though Walmart will reimburse shoppers for it with gift cards.
Walmart isn't alone in this experiment: This year, Sears (SHLD), Kmart, and eBay (EBAY) have all launched retail experiments that put their websites on sidewalks and in malls. In most cases, smartphones are what connect the cloud with the food court. Sears and Kmart now have "mobile toy walls": interactive ads in airports and subways that display images of products alongside Quick Response codes. The QR codes -- those speckled squares that work like bar codes -- take shoppers to an online checkout when scanned by smart-phones.
Online-only retailer eBay launched a similar experiment back in October with its "Inspiration Shop" on New York City's Park Avenue. The "24/7 shoppable storefront" was designed to turn foot traffic into Web traffic via the eBay app.
'Let the Store Come to the People'
Whether the "stores" will attract shoppers -- or remain clever advertisements -- remains to be seen. So far, some San Diego residents are perplexed by the dainty 3,000-square-foot Walmarts (an average Walmart Supercenter is 185,000 square feet). "This is a stupid idea since anyone could do the same thing using their home computer," Cheryl Clark, a local shopper told the Union-Tribune.
"The Walmart.com stores are just a small test we're conducting during the holiday season to offer local customers easier, more convenient access to products," a Walmart spokesman told Reuters.
Still, similar ventures in other countries have proved successful. Tesco, the supermarket chain, saw its online sales jump 130% when it launched a virtual grocery store in the subways of Seoul, Korea, a venture which inspired Sears and Kmart's mobile walls. There, busy commuters waiting for trains face life-size, hyper-realistic photos of fully stocked grocery aisles. By scanning QR codes, they can purchase items with smartphones and have them automatically delivered.
For Tesco, the walls were a way to "let the store come to the people," increasing market-share without having to open new locations, according to a video produced by Tesco's advertising agency, Cheil Worldwide.
In the U.S., more mobile users use smart phones than in South Korea, and mobile shopping is predicted to bring in $10 billion in sales in 2012, according to Forrester Research. Whether or not Sears' "mobile walls" catch on, they stand to raise awareness about Web offerings from the company, at the very least.
Meanwhile, in its grab for more online shoppers, Walmart has figured out something neither Tesco nor Amazon have -- how to bring the e-commerce experience to the people, even those without smartphones.
Filed under: Technology, Facebook, Banking
The most precious of holiday cards -- the one shaped like a $20 bill, with a peekaboo cutout for the president's face -- may be a thing of the past. Now you can just post a virtual $20 bill on a friend's Facebook wall to say Happy Holidays this year. Or send money to your kids in college -- instantly.In a joint effort with PayPal, the social media giant launched a new app this week called Send Money that could remake the money-transfer business. While a number of so-called peer-to-peer payment systems already exist, the new app offers a seamless money transfer system between Facebook friends -- and captures Facebook's more than 800 million users.
I took the new app for a test drive. On Thursday, I sent my sister $5 to say "Thanks for being a great sibling!" While I have a PayPal login, I don't keep actual funds in a PayPal account, so I used PayPal to make a payment via my credit card.
But if you fund the transfer directly from your bank account, or with money that is kept in a PayPal account it can be sent for free. And PayPal cash can be used for currencies in 65 countries.
The turnaround time beat snail mail by a long shot: After I made the payment, my sister reported getting a link for the gift in less than two minutes. She logged into PayPal, where the prompts directed her to withdraw the money from PayPal and transfer it to her bank account. Recipients can also request a paper check.
One disconcerting part of the payment transfer: The email receipt for my payment showed $5, not the actual $5.45 that was debited from my credit card.
Catherine New can be reached at catherine.new@huffingtonpost.com.
Filed under: Technology, Wal-Mart Stores, Facebook, Retail
Ah, the social phenomenon that is Facebook: It's where you banter with "friends," share vacation photos and "like" everything from your favorite classic sitcom or candy bar to your preferred political party -- so why not shop there, too?Retailers are making it easier to do just that.
Chains such as Express (EXPR) and 7 For All Mankind now sell directly on Facebook, just as Walmart (WMT) is bringing its stores to life on the site, reaching out to consumers where they spend their virtual lives.
Retailers had already been racking up Facebook "fans" to build brand loyalty, establish a sense of community, spread the word about sales and events, and spark chatter about their merchandise -- so selling on the site is the next logical step.
It's not surprising, says John Squire, chief strategy officer with IBM Coremetrics, IBM's (IBM) marketing technology company.
According to October conversion rates, 9.2% of consumers who visited a retail site from a social media site made a purchase, Coremetrics' data showed. And Facebook accounted for an estimated 77% of all traffic from social networks, Squire says. "If you want to get new products discovered, this seems like a very good place."
Express Takes on F-Commerce
Retailers are banking on the premise that shopping on Facebook will appeal to consumers who don't want to pry themselves away from the social network.
Express made everything in its stores available for purchase on Facebook in April. Inventory gets updated in real time, and shoppers can pay without leaving the site. The apparel merchant, which has more than 600 stores, has a captive audience on Facebook, Lisa Gavales, chief marketing officer of Express, tells DailyFinance.
"It was very much about being where our customers were, and if they were in the mood to shop, they'd be able to do it very easily, on the site, multiple times a day," she says.
The difference between shopping on Facebook and the Express' e-commerce site is the social nature of the transaction, Gavales says. When a shopper has just purchased a striped lace T-shirt, for example, she can highlight that purchase on her Facebook wall for all her friends to see.
The social shopping model meshes with the habits of Express' target demographic, which has come of age sharing their private lives in public online spaces like Facebook, Twitter and Foursquare. "Our customer is 25, and she likes to get and give advice to her friends. It offers an opportunity to show what she likes, and what she thinks is attractive and fashionable," Gavales says.
Indeed, Facebook fans may unwittingly serve as brand evangelists. A thumbs up on that cool Express top from a Facebook friend, for example, holds more weight than a store advertisement or promotion, experts say. Taken to the extreme, "digital influentials," people whose opinions hold outsized sway on social networks, can boost -- or dampen -- sales based on their reviews.
Facebook commerce also offers instant insight about what's selling -- data Express can use to tailor its merchandise mix, Gavales says. "We know a little more quickly what will become a hit based on the 'likes' we're getting."
Fan-Generated 'Stores'
Like Express, upscale denim retailer 7 For All Mankind invested in Facebook commerce because for many people, the site has become an extension of themselves, says Barry Miguel, president of the chain.
Seven For All Mankind's F-commerce page serves up an edited mix of the brand's collection, and is designed to make its fans feel like insiders. Sale items are exclusive to fans for two days before they show up on the chain's own e-commerce site.
But what's most unusual about 7 for All Mankind's F-commerce platform is a new feature that enables shoppers to buy products from a News Feed Store on their Facebook wall. Facebook fans can create wish lists to share with friends, which become personalized stores in the news feed.
Social commerce experts call the Facebook news feed the most valuable real estate in the digital space, akin to having an anchor store in an "A" mall. "The majority of the time spent on Facebook is spent on the news feed, so we felt that was an important component in our F-commerce efforts," Miguel says. "There is a viral component to the [news feed stores] that extends the reach of our brand message beyond people who are existing fans of the brand."
F-Commerce, Magazine Style
Urban Outfitters (URBN), too, set out to make its catalog shoppable on Facebook.
With the help of enter: new media, it launched a "magalog" on Facebook in August to tout its fall merchandise, the first of its kind, according to Curtis, the agency's president. Facebook fans can virtually flip through pages of glossy photo spreads and editorial content, roll over a picture of an item and pull up a product description. To make a purchase, users are directed to Urban Outfitters' e-commerce site.
The approach builds on the marriage of content and commerce, a trend bubbling up with new sites like Cladmen.com, an online menswear shop that features advice and product information from the editors of Esquire magazine, and gourmet food site Gilt Taste, which includes articles for foodies, and lush photography to help sell upscale culinary fare.
The retailer will soon launch its holiday magalog, Curtis says. Urban Outfitters declined to comment for this story.
Facebook Selling or Facebook Marketing?
In October, the world's largest retailer launched more than 3,500 store-specific Facebook pages. The new MyLocal Walmart Facebook app enables shoppers to track what's in the stores near them, offers locally relevant information on new products, and updates on discounts.
"Facebook is a treasure trove of personal information and consumer information, and retailers are finding out ways to leverage that, send people targeted offers, and even drive them to their stores," Grau says. Indeed, "Despite the wild success of e-commerce, 94% of all purchases are done in stores."
But it's not only traditional brick-and-mortar retailers that are experimenting with selling on Facebook -- the entertainment world is too, says Blair Heavey, CEO of Moontoast, which distributes social commerce platforms for artists such as Jay-Z, Rascal Flatts, as well as Sony Music Entertainment and the American Music Channel.
The company launched a store on Facebook last year to help pre-sell Reba McEntire's album, All the Women I Am, pushing items such as lithographs signed by the country singer, as well as apparel and concert tickets, and offering special rewards for fans.
Product sales from the Facebook McEntire shop outperformed other venues, Heavey says. "Entertainers can take advantage of impulse purchases by rewarding fans who have publicly declared they 'like' them through differentiated offers delivered socially," he says.
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