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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

#21

Post by arrrg »

rednukleus wrote: post #13
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.

… but in an overall growing market.

It’s not necessarily true that competitors are converting owners of Apple devices en masse, it’s much more likely that competitors are able to convert more non-smartphone or tablet users than Apple can.

I foresee Apple being just a company that doesn’t grow much in the future but still makes tons of money.

Re: Why Amazon Is Special and Apple Is Not

#22

Post by lumberjack »

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…

I think he means to say that there are already various smartphone and laptop manufactures whereas there are few (none?) who have Amazon's worldwide logistics infrastructure. So in effect, the hurdles to be tackled by a promising competitor are more easily monitor in Amazon's case than in Apple's and therefore Amazon is a potentially safer investment.

I myself think the view a bit too simplistic and as a counterpoint I would say that Apple's continuous influential presence within the market despite the hostility imposed by the numerous competitors is a testament to Apple's ability to navigate treacherous waters.

Re: Why Amazon Is Special and Apple Is Not

#23

Post by rscale »

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.

Anecdata: I'm an Apple customer who purchases Kindle books specifically because they're cross-platform. I like that they're at least future-resistant.

Re: Why Amazon Is Special and Apple Is Not

#24

Post by codeflo »

sliverstorm wrote: post #15
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?

I don't quite follow you either, maybe I misunderstand you. Every sale that Walmart makes is one that Amazon didn't get, right? They are direct competitors (at least for a subset of their respective product portfolio).

Re: Why Amazon Is Special and Apple Is Not

#25

Post by niggler »

sliverstorm wrote: post #15
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?

How do you define "competing against Amazon"?

If you define it as general retail (who manages to capture the consumer dollar), then Walmart and its physical stores can be considered a competitor.

If you take the article's concept: "build a massive online database and offline infrastructure to transport boxes from warehouses to hundreds of millions of doorsteps.", then clearly stores aren't competing with Amazon.

Re: Why Amazon Is Special and Apple Is Not

#26

Post by rohamg »

amzn see themselves as an infrastructure company, their legacy ecommerce business is being kept at low margin precisely because they're unable to innovate further. aapl keeps selling at high margins because they're building differentiated products. this junk argument is getting tired.

Re: Why Amazon Is Special and Apple Is Not

#27

Post by rjegundo »

This is completely focused on the financial side of the business. The innovation & marketing factors are not being considered, and those are precisely the elements that allow Apple to keep their high margin.

If a product is - or at least is perceived - to be 100% better than the others, paying just an extra 30% is a win in the mind of consumers

Re: Why Amazon Is Special and Apple Is Not

#28

Post by cobolorum »

rednukleus wrote: post #6
jamroom wrote: post #2

When has Apple ever "competed on price"? As far as I can tell, low cost competition has not been a problem for Apple.

In the 90's, Windows machines competed with Macs on price, and nearly made Apple extinct. With the iPod, iPhone and iPad, Apple have been going from Early Mover to Early Mover, which has allowed them to keep their high margins. Unless they can keep finding even more new markets to move into, they are going to find it harder and harder to maintain high margins. They will then almost certainly have to lower their price…

These days, OSX is simply a better product than is Windows (stability, security, feature set). OSX also has things like iTunes (largest provider of digital content world-wide... besides Pirate Bay), FinalCut, Logic, Aperture, and GNU/BSD tools. That's a hard line up for Windows to beat. More importantly, I think, is that OSX and iOS work well with one another. If I have an iPad, an iPhone, and an iMac my content syncs easily and transparently. When taken with iTunes this is simply tough to compete with.

tl:dr digital content delivery made Apple king.

Re: Why Amazon Is Special and Apple Is Not

#29

Post by rohamg »

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…

it's very wrong. take a look at the latest batch of 500.co or YC or AngelList. compare # of companies gunning for AMZN and ecommerce compared to those gearing up to build phones and tablets. if i was apple i'd rather compete against HTC armed with margin than the hordes of YC. the article implies Amazon's scorched earth approach is preferable to Apple's continuing innovation. braindead if u ask me.

Re: Why Amazon Is Special and Apple Is Not

#30

Post by cobolorum »

EwanG wrote: post #3

TLDR - The cost of competing against Amazon is a magnitude higher than competing against Apple (see Android).

Android only competes in a supercilious way. Android powered phones compete with the iPhone and Android OS does not compete with iOS. You cannot install Android on an iPhone and Apple does not offer iOS without an iTrinket. Samsung is a competitor of Apple not Android.
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