Nouns are more important than adjectives
Bloomberg quotes Thrivent analyst Nabil Elsheshai “It’s no coincidence that Google’s rise has coincided with Apple’s demise. Making money from services versus devices is growingly perceived as a better business model.”
Please, correct me if I’m wrong, but somebody has to make something for a service to actually be of any value at all.
You service your car; no car, no service.
You get information from the web about where to buy things; nothing to buy, no reason to search for info about it.
Crowd sourcing tells you which restaurant you want to eat in and Pandora streams music to your desktop, but the food had to be prepared and musicians had to create the music; everything, it seems to me, starts and finishes with things.
Right now, Google makes much of its revenue related to advertising. It’s genius really, all the ways they skim money from that business and what it’s done for them. For that Google should be commended. But to suggest that services are more valuable than devices seems crazy to me. On the plus side, Google makes money from the advertising of, well, anything. That’s, no question, a pretty big stream of money, but it’s literally pennies an ad. Margin per transaction is important for a business because each transaction, even with Gooogle’s efficiency, costs something.
Meanwhile, thing-makers, like the companies I usually work with, have to set aside some of their margins for advertising—money they’ll pay maybe to Google in order to get the word out about their new thing.That advertising dollar can never be greater than the money made from the thing in the first place though, can it? Google’s ultimate market, if unopposed and if they get every advertising dollar out there, is certainly large and, likely larger than Apple’s. Apple can make only so many different categories of iDevices after all. Except Apple, and all of us thing-makers (manufacturers) typically make quite a bit more money every time someone buys our object; even if we pay Google a little bit to help convince them. The broader suggestion, that services are more valuable than things is ludicrous.
It’s annoying because one thing may be true about this quote: perception. Small startups selling real live things you can touch and use have a hard time just competing for investor ear-time with thousands of software models based on some variation of ‘get a load of users for a service and then sell the users to advertisers.’ Usually this business model is called a service, but it’s driven by advertising, and there is only so much advertising revenue to go around. And it’s always going to be smaller than the revenue from selling actual objects.
In other words, without the nouns, there’s really no reason to bother describing them.