61–70 of 77 posts
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.
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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.
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…
What about Amazon Web Services? Amazon was and still is a leader on the cloud computing front.
> Bezos' desire to constantly reinvest in the future
This is a huge advantage at least from an investor perspective.
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…
That's why I always struggled with the concepts of dividends. If you have so much money you can pay dividends, it means you have grossly high margins and not investing in growth enough; which means someone will come and not only destroy your margins but your business also. If we're talking tech not mining.
The primary duty of the company's executives is to deploy capital effectively. Paying out dividends in many cases is a sign of good management since it makes it clear they understand the limitations of what they can do with deploying capital internally. The assumption is that unless they can earn more on the capital than shareholders could by investing it elsewhere, they should return it to shareholders.
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…
>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 applaud Amazon's efforts to prevent disruption with the Kindle and to move into the cloud. AWS is fairly innovative.
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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…
At the time I thought that the lack of quality of the Mac was an offshoot from the lack of market share, but having read a number of books lately on that era, I think it was more a lack of Steve Jobs that was the problem.
It will be interesting to see what happens now, because again they don't have Jobs, but the current team are in my opinion far more on top of things than the management team in the 90's. OSX is also on a much firmer footing than the old Mac OS, particularly because of the Unix roots.
iOS I'm not sure about. I think they have made a number of compromises and sacrifices in order to make the phone run quicker and be more "simple", but I think it is falling behind Android. I also think that their reliance on marketing Retina DPI along with having s fixed resolution is getting them into trouble.
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…
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…
There's not wishful thinking in any of this. Amazon and Apple are not startups, they are both mature businesses in their prime. They still have a lot of risks and opportunities ahead of them for sure, but Amazon started business I think 17 years ago. Arguably Apple's reconstruction into the company it is today started at around the same time with the NeXT acquisition and the return of Steve Jobs. That's a significant track record on which to evaluate them.
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)
How much of that pricing power would remain if Costco carried as many items as Amazon? Amazon is predicted to eclipse Costco (and Target) in terms of sales this year ( http://money.msn.com/top-stocks/post.aspx?post=34532428-58cf... ), so given an equal catalog, Amazon would be able to sell more of each item and command a lower price, no? Amazon's catalog is so much bigger than Costco's along two axes; more kinds of p…
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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).
I guess I don't see it that way, but reflecting I guess my view is distorted.