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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

#41

Post by thechut »

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?

This is first year business school stuff here. In a five forces analysis[1] of Amazon, Wal-Mart would certainly be a substitute, not a rival.

In general it is true that Amazon has a high threat of substitutes. I think what @silverstorm, and this article, are trying to say is that rivalry for Amazon is pretty low, given how expansive their business is.

[1] http://en.wikipedia.org/wiki/Porter_five_forces_analysis

Re: Why Amazon Is Special and Apple Is Not

#42

Post by guard-of-terra »

lumberjack wrote: post #22
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…

Amazon is very far from being world-wide. Amazon is patchy, here and there in some countries in the world, which is much bigger than that.

Apple can cross borders much more easily, which it does.

Re: Why Amazon Is Special and Apple Is Not

#43

Post by jcurbo »

cobolorum wrote: post #28
rednukleus wrote: post #6

Earlier quoted context omitted.

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 sync…

iTunes is available on Windows and does content syncing with multiple devices just fine.

Re: Why Amazon Is Special and Apple Is Not

#44

Post by umbrella »

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…

Theoretically it would be possible to compete with Apple because their price position makes them vulnerable (high margins). A competitor offering an equivalent product could undercut them and come out on top. This is textbook from an investment point of view.

This was all said in the article I think but I'm just trying to rephrase it.

But yes, as Microsoft demonstrates competition in this sector doesn't always go by the book. Because it really isn't such a free market with non-captive consumers.

Re: Why Amazon Is Special and Apple Is Not

#45

Post by michalu »

What this article basically says is that Apple is not special because it is likely to become (in case of price wars) Amazon. But I don't get what makes Amazon so special to be valued at P/E 3000 while Apple a company with enough capital on books to buy 100% of Amazon stock in cash is valued at P/E 10. Possibly a stupidity and self deception of investors.

( On another hand I totally admire Jeff Bezos and the company he built )

Re: Why Amazon Is Special and Apple Is Not

#46

Post by niggler »

potatolicious wrote: post #38
niggler wrote: post #25

Earlier quoted context omitted.

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.

I actually think brick and mortar stores are competing with Amazon - and there is also an emerging hybrid approach that threatens Amazon as well. In many places, suburbs and cities alike, people don't want stuff delivered to their doorstep. The existence of Amazon Lockers is proof enough of this - sotres now offer online shopping with local pickup (Best Buy, Staples, and IIRC Wal-Mart). This competes with Amazon. Wal…

Amazon Lockers and local pickup solve different problems: the Locker solves the delivery guy issue (will I be there to sign) but doesn't provide the immediacy of in-store pickup for those items that are available in store.

Re: Why Amazon Is Special and Apple Is Not

#47

Post by ricardobeat »

zyb09 wrote: post #17

> and it also hints at potential complacency. Hints? Potential? Have you guys not seen the kool-aid their employees are watching internally: https://www.youtube.com/watch?v=-AkLOvjl5jo

That's actually very bland for an in-company motivational video, and a good lesson in store design from Apple's perspective.

Re: Why Amazon Is Special and Apple Is Not

#48

Post by lucian1900 »

simonh wrote: post #14

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 har…

It's called Amarok.

Re: Why Amazon Is Special and Apple Is Not

#49

Post by rednukleus »

cobolorum wrote: post #28
rednukleus wrote: post #6

Earlier quoted context omitted.

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 sync…

What a rediculous comment. Windows still has plenty of advantages over OSX. Better window management, much better backward compatibility, better driver support, particularly for graphics cards. Its "simply better" for office productivity work, and computer games.

OSX has Unix compatibility, better audio and video production etc.

Neither is "simply better".

Re: Why Amazon Is Special and Apple Is Not

#50

Post by codex »

Apple is special because it is the paragon of the tech. innovator. There is always some new big thing in technology, and while Apple may not remain king, there will always be a company like Apple doing amazing things.

Amazon, on the other hand, is in retail. Very little magic or innovation happens in this old business, though Amazon is doing its best to squeeze some from a stone. Their music business was successfully disrupted by the iPod and they're scrambling like hell to prevent disruption in other digital media. It is not a place of wonder, and Amazon will never make anything but a token profit due to the nature of retail and Bezos' desire to constantly reinvest in the future.

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