This is an aggressive expansion into a new market for Amazon. Photo: Getty
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Amazon's smartphone launch offers a prudent platform for growth

What the launch of Amazon’s smartphone tells us about the company’s future strategy.

Amazon, the e-commerce internet giant, is launching its first smartphone. Media attention is focusing on whether the phone’s features, such as its rumoured 3D interface, are really as cool as portrayed in its trailer video which aims to wow early users. But by entering into the fray of an already hyper-competitive mobile phone industry, Amazon is doing a lot more than adding another gee-whizz feature to a smartphone.

This launch tells us a great deal about CEO Jeff Bezos' strategy for his company – and what it might mean for the future of competition and innovation in our increasingly digital world.

First, let’s ask the obvious questions. Why is Amazon, known for internet retailing and related software development, entering a hardware market where leading incumbents like Nokia have already failed? After all, what does Amazon know about the telecoms business? Can it succeed where Google has failed?

We have seen Google, which has virtually limitless financial resources, enter the mobile phone handset industry by purchasing Motorola Mobile in 2012, only to take a heavy loss after selling it on less than two years later. Even incumbent firms who had a very strong set of phone-making capabilities have taken tough hits in this turbulent market – witness Nokia’s dramatic plunge, which led to a sale of its mobile phone business to Microsoft.

Platform Number 1

You cannot understand Amazon’s move without situating it in the broader context of platform competition. Platforms, these fundamental technologies such as Google search, Facebook and the Apple iPhone, are the building blocks of our digital economy. They act as a foundation on top of which thousands of innovators worldwide develop complementary products and services and facilitate transactions between increasingly larger networks of users, buyers and sellers. Platform competition is the name of the game in hi-tech industries today.

The top-valued digital companies in the world (Amazon, Apple, Google, Facebook) are all aggressively pursuing platform strategies. App developers and other producers of complementary services or products provide the armies that sustain the vibrancy and competitiveness of these platforms by adding their products to them. The more users a platform has, the more these innovators will be attracted to developing for them. The more complements available, the more valuable the platform becomes to users. It is these virtuous cycles – positive feedback loops, or “network effects” – that fuel the growth of platforms and transform them into formidable engines of growth for the companies and developers associated with them.

The smartphone is a crucial digital platform. Achieving platform leader status in this space is a competitive position all the hi-tech giants are fighting for. Google has its ubiquitous Android operating system, Apple has shaped the whole market with the iPhone, Microsoft has purchased Nokia’s phone business, and Facebook has invested $19 billion in WhatsApp among other acquisitions for its growing platform.

In fact, I suppose I should have rephrased my question a little earlier – why hasn’t Amazon already staked its claim to lead this digital space after having launched its Kindle Fire tablet and Fire TV set-top box?

Opening the door

Simply put, the smartphone is the main gateway to the internet today, and, in the hand of billions of users throughout the world, is the physical embodiment of a conduit that links those users to each other and to the whole content of the internet. There are almost 7 billion mobile phones in the world (and only 1 billion bank accounts). And the trend is staggering. Mobile payment transaction value surpassed $235 billion worldwide in 2013, and is growing at 40% a year, with the share of mobile transactions already reaching 20% of all worldwide transactions.

So, while risky, Amazon’s entry into the smartphone business is a classic play: a platform leader entering an adjacent platform market that is also complementary to its primary business. All platform leaders aim to stimulate complementary innovation (think how video game console makers aim to stimulate the provision of videogames), and they often attempt not to compete too much with their complementors in order to preserve innovation incentives. But at some point all platform leaders start to enter these complementary markets themselves. Google has done it through Android, Apple has done it with iTunes, Facebook has done it with Facebook Home.

It happens when platform leaders feel threatened by competition in their core market, or when they want to steer demand, competition and innovation in a particular direction. The idea is to use their own user base as well as their own content and technologies to create an unassailable bundle, one that is difficult for external competitors to break into. Think of it as creating barriers to entry, while expanding the core market.

The reasoning behind entering a complementary market is well known, and related to the benefits of bundling. In the case of hi-tech platforms, the benefits are even stronger. By optimising and controlling the interface between a platform and complements, a company can have a structuring impact on the evolution of the platform ecosystem – and that means on all the innovators around the world that invest and make efforts to develop complementary products and services.

In your hands

So, these are the reasons why Amazon is entering the mobile phone market, despite the difficulties inherent in taking on an über-competitive market. This strategic choice makes a lot of sense.

As to whether Amazon has a fighting chance of succeeding, there are reasons to be optimistic. Beyond its deep financial resources, Amazon has learned something of what it takes in the development and successful commercialisation of various versions of the Kindle. That has given it expertise in hardware, on top of its software background, and should prove a useful training ground to allow it to launch other consumer products such as the smartphone.

But the ultimate judge will be you, gentle readers. Will you be willing to swap your favourite mobile phone for a yet another new kid on the block, even if it does let you browse Amazon’s ever-growing catalogue in splendid 3D?

The ConversationAnnabelle Gawer does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published on The Conversation. Read the original article.

Alan Schulz
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An Amazonian tribe is challenging scientific assumptions about our musical preferences

The Tsimane’ – a population of people in a rural village in Bolivia – are overturning scientists' understanding of why humans prefer consonant sounds over dissonant ones.

It was 29 May 1913. Hoards of Parisians packed out the newly-opened Théâtre des Champs-Élysées. Messrs Proust, Picasso and Debussy were in attendance. Billed for the evening was the premiere of Le Sacre du PrintempsThe Rite of Spring, a ballet and orchestral work debuted by Russian composer Igor Stravinsky.

The attention and conjecture focused on the theatre that day meant expectations were high. However, within moments of the piece beginning, all preconceived notions held by the audience were shattered, as what was unfolding in front of them was a musical tragedy unlike anything they had ever witnessed.

A bassoon hummed into the ether before ballet dancers stomped on stage; the music, unpredictable with its experimental edge, drove forth the onstage narrative of a young girl whose selection during a pagan ritual saw her sacrificially dance towards death. Stravinsky’s composition and the ensemble of the night caused the room to descend from laughter and disruption to chaos and uproar.

The employment of dissonance – sharp, unstable chords – largely contributed to the audience’s disturbed reaction. Dissonant chords create a tension, one which seeks to be resolved by transitioning to a consonant chord – for example an octave or perfect fifth. These musical intervals sound far calmer than the chords which riveted the audience of The Rite of Spring.

Dissonant and consonant intervals find themselves as binary opposites; the frequencies at which notes played together vibrate determine whether an interval is consonant or dissonant. Consonant intervals have simple mathematical relationships between them, but greater digression from that simplicity makes an interval increasingly dissonant.

It’s long been believed  both experimentally and anecdotally – that the preference among Westerners for consonant chords highlights a universal, perhaps biologically-rooted, leaning among all humans towards consonant sounds. If you were present at the introduction of Stravinsky’s The Rite of Spring on that night of furore in Paris, you’d find it hard to disagree.

There is, however, a growing movement against this consensus. Ethnomusicologists and composers alike argue that favouring consonance may just be a phenomenon that has evolved from Western musical culture. And following the visit of a group of researchers to a remote Amazonian society, these claims could well be grounded in scientific evidence.

Led by Josh McDermott, an MIT researcher who studies how people hear, the group travelled to a village in the Amazon rainforest called Santa Maria. It’s populated by the Tsimane’ – a group of native Amazonians whose rural abode is inaccessible by road and foot, and can be reached only by canoe. There are no televisions in Santa Maria and its inhabitants have little access to radio, meaning exposure to Western cultural influences is minimal.

The researchers were curious to see how the Tsimane’ would respond to music, in order to determine whether they too had a preference for consonant sounds over dissonant ones. To everyone’s surprise, the Tsimane’ showed no preference for consonance; the two different sounds, to the Tsimane’ at least, were equally pleasant.

Detailing their research in a paper published by Nature, the group explains how the Tsimane’ people’s indifference to dissonance is a product of their distance from Western culture and music, removing any purported notion that humans are hard-wired to praise perfect fifths and fourths.

McDermott tells me that the Western preference for consonance may just be based on familiarity. “The music we hear typically has more consonant chords than dissonant chords, and we may like what we are most exposed to,” he says. “Another possibility is that we are conditioned by all the instances in which we hear consonant and dissonant chords when something good or bad is happening, for example in films and on TV. Music is so ubiquitous in modern entertainment that I think this could be a huge effect. But it could also be mere exposure.”

To fully gauge the Tsimane’ responses to the music, 64 participants, listening via headphones, were asked to rate the pleasantness of chords composed of synthetic tones, and chords composed of recorded notes sung by a vocalist. At a later date, another 50 took part in the experiment. They had their responses compared to Bolivian residents in a town called San Borja, the capital city La Paz, and residents in the United States – locations selected based on their varying exposures to Western music.

What made the Tsimane’ particularly interesting to McDermott and his group was the absence of harmony, polyphony and group performances in their music. It was something the researchers initially thought may prevent an aesthetic response from forming, but the worry was quickly diminished given the Tsimane’ participants’ measure of pleasantness on the four-point scale they were provided.

Unsurprisingly, the US residents showed a strong preference for consonance – an expected preference given the overrunning of Western music with consonant chords. Meanwhile, the San Borja and La Paz residents demonstrated inclinations towards consonant sounds similar to the US residents. The implication of these results – that consonance preferences are absent in cultures “sufficiently isolated” from Western music – are huge. We most probably aren’t as polarised by consonance and dissonance as we assume; cultural prevalence is far more likely to have shaped the consonant-dominant sounds of Western music.

McDermott raised the question about why Western music may feature certain intervals over others to begin with:

“One possibility is that biology and physics conspire to make conventionally consonant and dissonant chords easy to distinguish, and so that distinction becomes a natural one on which to set up an aesthetic contrast even if the preference is not obligatory. We have a little evidence for this in that the Tsimane' could discriminate harmonic from inharmonic frequencies, which we believe form the basis of the Western consonance/dissonance distinction, even though they did not prefer harmonic to inharmonic frequencies.”

There has been some criticism of this. Speaking to The Atlantic, Daniel Bowling from the University of Vienna said:

“The claim that the human perception of tonal beauty is free from biological constraint on the basis of a lack of full-blown Western consonance preferences in one Amazonian tribe is misleading.”

Though the results from the Amazonian tribe demonstrate a complete refutation of previous assumptions, people's musical preferences from other cultures and places will need to be analysed to cement the idea.

With research beginning to expand beyond WEIRD people – those from a Western, Educated, Industrialised, Rich and Democratic background – the tastes in music of people the world over may continue to surprise, just as the Tsimane’ did.

The Rite of Spring, which was met with ridiculing reviews has now been canonised and is considered to be one of the most important pieces of music of the twentieth century. A Tsimane’ crowd on that tender night a century ago in Paris may have responded with instant praise and elation. With further research, the imagined Bolivian adoration of a Russian composer’s piece in the French city of love may prove music to be the universal language after all.