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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

#71

Post by epo »

mdasen wrote: post #35
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…

One of the things that must be considered is that from 1995-2006, Windows machines were better. I was a Mac user through that time. Windows 95 came around with preemptive multi-tasking. The Mac was still more polished, but Windows 95 was a better operating system. This period also saw Intel processors far outpace the PowerPC. When OS X came out in 2001, it was so slow as to be nearly unusable. 10.1 helped, but compar…

I don't believe that for most people "Windows machines were substantially better". Then, as now, Windows was bundled in with so much crapware and with such poor out of the box defaults that the performance was, and remains, dreadful.

Then, as now, Windows primarily thrived because corporate buyers bought more of what they already had. The success of Windows between 1996-2005 was almost entirely due to monopolistic abuse and buyer inertia.

Re: Why Amazon Is Special and Apple Is Not

#72

Post by fspeech »

simonh wrote: post #68
fspeech wrote: post #59

Earlier quoted context omitted.

You are right about the ecosystem but that is not how Apple makes so much money. iPod and app/music sales are minor portions of Apple valuation. The main profit center is driven by high iPhone margins, which are carrier subsidized so that people upgrade without second thought. When there are good enough lower cost alternatives carriers have all the incentive to reduce the subsidy, which either show up as lower gross…

I know that's not how they make their money, but it's a large part of their value proposition to customers. iPods might have been successful without iTunes, but nowhere near as much as they were with it. Just because something is free doesn't mean it has no value. That's the fundamental principle the free/libre software movement is built on, but they're not the only ones that can leverage the power of free. Apple is…

I mostly agree with what you are saying. The reason we are having a discussion here is that there are at least two ways to look at the fact that Apple enjoys both mass volume and high margin:

1. Apple has an amazing business.

2. Despite 1 it is not sustainable to have both mass volume and high margin.

I am trying to come up with counter examples of point 2. Coca Cola, McDonald's and Microsoft come to mind, but they share a common characteristic in that these companies control a small but high margin part of their respective value chains. The end products that consumers actually buy (Coke, burgers and PCs) are mass volume and low margin.

Re: Why Amazon Is Special and Apple Is Not

#73

Post by rednukleus »

epo wrote: post #71
mdasen wrote: post #35

Earlier quoted context omitted.

One of the things that must be considered is that from 1995-2006, Windows machines were better. I was a Mac user through that time. Windows 95 came around with preemptive multi-tasking. The Mac was still more polished, but Windows 95 was a better operating system. This period also saw Intel processors far outpace the PowerPC. When OS X came out in 2001, it was so slow as to be nearly unusable. 10.1 helped, but compar…

I don't believe that for most people "Windows machines were substantially better". Then, as now, Windows was bundled in with so much crapware and with such poor out of the box defaults that the performance was, and remains, dreadful. Then, as now, Windows primarily thrived because corporate buyers bought more of what they already had. The success of Windows between 1996-2005 was almost entirely due to monopolistic ab…

Complete nonsense. Macs in the late 90s were awful, and most Mac fans I know agree with this, at least in retrospect. Slow, expensive, hardly any software ran on the things.

Windows machines thrived for many reasons, including being faster, cheaper, having the best office programs, by far the best games, as well as all the advantages they had in enterprise.

I don't think any competent observer could say that late 90's Macs were good value machines.

Re: Why Amazon Is Special and Apple Is Not

#74

Post by ahoyhere »

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 recently bought a pair of pajama pants from Walmart.com and they shipped the same day. How many online retailers do that? Other than Amazon, of course.

Certainly Walmart believes they are competing with Amazon. (I would have bought my patio furniture there, too, if they hadn't sold out. Instead I bought it on Target.com.)

Re: Why Amazon Is Special and Apple Is Not

#75

Post by awfabian3 »

rednukleus wrote: post #49
cobolorum wrote: post #28

Earlier quoted context omitted.

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".

The root word of "ridiculous" in ridicule.

Re: Why Amazon Is Special and Apple Is Not

#76

Post by jseliger »

codex wrote: post #66
jseliger wrote: post #57

Earlier quoted context omitted.

>Amazon, on the other hand, is in retail. Very little magic or innovation happens in this old business This isn't really true. Check out Emek Basker's famous paper "The Causes and Consequences of Wal-Mart's Growth" (econ.missouri.edu/working-papers/2006/wp0611_​basker.pdf (and its citations)) and the work of other economists who estimate that WalMart, on its own may be responsible for an appreciable portion of U.S. p…

I would draw a distinction between productivity and innovation. The source of Walmart's productivity gains was not innovation within Walmart, but advances in technology, from which Walmart was able to take advantage of more quickly than competitors. Just because retail gained in productivity and Walmart is the biggest retailer does not imply that Walmart is the source of innovation. I do give Walmart credit for their…

>I would draw a distinction between productivity and innovation

Again, check out the paper, the papers citing it, and the papers cited in its bibliography—based on that research, the distinction is fuzzy at best.

Re: Why Amazon Is Special and Apple Is Not

#77

Post by simonh »

fspeech wrote: post #72
simonh wrote: post #68

Earlier quoted context omitted.

I know that's not how they make their money, but it's a large part of their value proposition to customers. iPods might have been successful without iTunes, but nowhere near as much as they were with it. Just because something is free doesn't mean it has no value. That's the fundamental principle the free/libre software movement is built on, but they're not the only ones that can leverage the power of free. Apple is…

I mostly agree with what you are saying. The reason we are having a discussion here is that there are at least two ways to look at the fact that Apple enjoys both mass volume and high margin: 1. Apple has an amazing business. 2. Despite 1 it is not sustainable to have both mass volume and high margin. I am trying to come up with counter examples of point 2. Coca Cola, McDonald's and Microsoft come to mind, but they s…

I'd agree that mass volume and high margin is hard to pull off, and often proves unstable. I think this is why Apple often doesn't try to address all of a market. They only produce a handful of desktop and laptop models, they have resisted producing a large format phone (though I do expect that to change), etc. They value product consistency over feature and form factor proliferation. They are perfectly happy to occupy the high end of the market, and leave the low end to others.
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