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Why Amazon Is Special and Apple Is Not

theatlantic.com

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Re: Why Amazon Is Special and Apple Is Not

#11

Post by mrfairladyz »

niggler wrote: post #7

After seeing many cases where Amazon is not the cheapest, I wonder if Costco (and costco.com) could ultimately eat away at Amazon. It has incredible pricing power and an efficient infrastructure, and costco.com itself is growing rapidly. Most importantly, on many items Costco can beat Amazon's price by a significant margin (even comparing Amazon's tax-advantaged price to Costco's after-tax price)

And remember, the tax advantage doesn't hold everywhere (certainly not in California anymore). Amazon has to offer something better other than price, and I think Prime is a large part of that.

Re: Why Amazon Is Special and Apple Is Not

#12

Post by codeflo »

Article claims that it's easy to compete with Apple, yet hard to compete with Amazon. Fair enough, makes a lot of sense to me.

And yet, last I checked, a lot of companies made serious money in retail, but very few companies managed to earn substantial profits in smartphones, tablets and notebooks.

I seems to be harder to compete with Apple than most investors think it is. (I say that as a developer who hopes that an open platform will win the smartphone wars.)

Re: Why Amazon Is Special and Apple Is Not

#13

Post by rednukleus »

bfwi wrote: post #4

The article states that a company with high margins, is at risk of being outcompeted by companys with lower prices. This makes sense, but in the case of Apple, lower priced products have been there for a while and people still choose Apple.

Apple have Most of their profit comes from phones and tablets, and in both of these markets their global marketshare has decreased, or at best held steady, in most quarters over the last few years.

Re: Why Amazon Is Special and Apple Is Not

#14

Post by simonh »

And yet 5 years after the launch of the iPhone Apple still hoovers up a vast proportion of the profits in both the mobile industry and the desktop computer industry. Meanwhile 17 years after it launched, Amazon earned in total as much as Apple does in a single quarter.

The point is that Apple's devices are not easily disrupted by low end competitors because building software platforms and ecosystems is incredibly hard and once established they are very resilient to disruption.

If low end disruption was such a dire threat, the Zune would have rolled the iPod and Amorok would have supplanted iTunes. The majority of Android handset makers wouldn't be on the ropes financially and Microsoft's Phone and tablet software would be rapidly accumulating credible market share. And yet....

The author is trying to explain why what has been manifestly and irrefutably happening in front of our eyes for the last 10 years plus, and at this point is a matter of historical record, is impossible.

Re: Why Amazon Is Special and Apple Is Not

#15

Post by sliverstorm »

codeflo wrote: post #12

Article claims that it's easy to compete with Apple, yet hard to compete with Amazon. Fair enough, makes a lot of sense to me. And yet, last I checked, a lot of companies made serious money in retail, but very few companies managed to earn substantial profits in smartphones, tablets and notebooks. I seems to be harder to compete with Apple than most investors think it is. (I say that as a developer who hopes that an…

Your second line doesn't make sense. What does companies making money in retail have to do with being able to compete with Amazon?

Now, if you could say that incumbents attacking Amazon's base stole serious revenue from Amazon that would be something. But what does it mean to say WalMart makes serious money in retail, ergo it is easy to compete against Amazon?

Re: Why Amazon Is Special and Apple Is Not

#16

Post by mrfairladyz »

gingerlime wrote: post #10

As the update to the article quotes: > The chances I leave [Apple] are minimal because I have all my music and photos and such on the phone. The inertia or friction of moving is fairly high. This is also starting to become true with the kindle for consumers. Another advantage of Amazon however is its many business customers - i.e. those who use and rely on AWS. I would imagine the friction of moving away from AWS are…

>This is also starting to become true with the kindle for consumers.

I disagree. In my experience, buying books on Kindle has been almost a reassurance that it could be read on any other platform, either through a web browser or iPhone/Android app. Amazon has made it easy to switch platforms and still be hooked on their services, whereas Apple essentially locks you in to their ecosystem with only allowing their content (iBooks and movie rentals, but not music in some sense) to be enjoyed on Apple devices.

Services like Spotify and Rdio make it easier to switch platforms -- if I want my music library on another platform, all I need to do is download an app. That kind of flexibility and availability is more powerful and consumer-friendly in the long run, in my opinion.

Here's an interesting read from Paul Miller of The Verge: http://www.theverge.com/2012/1/4/2669066/ecosystem-the-winne...

Re: Why Amazon Is Special and Apple Is Not

#18

Post by niggler »

mrfairladyz wrote: post #11
niggler wrote: post #7

After seeing many cases where Amazon is not the cheapest, I wonder if Costco (and costco.com) could ultimately eat away at Amazon. It has incredible pricing power and an efficient infrastructure, and costco.com itself is growing rapidly. Most importantly, on many items Costco can beat Amazon's price by a significant margin (even comparing Amazon's tax-advantaged price to Costco's after-tax price)

And remember, the tax advantage doesn't hold everywhere (certainly not in California anymore). Amazon has to offer something better other than price, and I think Prime is a large part of that.

FTA, Amazon's core business is "build[ing] a massive online database and offline infrastructure to transport boxes from warehouses to hundreds of millions of doorsteps", and I would argue that Costco's physical presence, existing warehouse efficiency, and brand identity positions them well for a foray into Amazon's business.

As for "offer something better other than price", most people point to customer service, and in my experience Costco's customer service completely blows away Amazon.

Re: Why Amazon Is Special and Apple Is Not

#20

Post by sliverstorm »

TomAnthony wrote: post #5

There are a few things about this article that I must not be following correctly: - Apple's core business is something 'everyone can do'. If so then why aren't there more people chasing down their position as 'most profitable tech company'? - 'Practically nobody wants to' do what Amazon do? I get the premise: Amazon are playing a long game but will be entrenched, whereas Apple's products tend to have a far shorter li…

If so then why aren't there more people chasing down their position as 'most profitable tech company'?

Competitors are not yet successful at giving Apple's profitability a run for its money, but you'd have to be willfully blind to think they weren't trying.

LG, Samsung, Nokia, RIM, HTC, Huawei, Acer, Asus, Motorola, Sony...

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