APPLE AND AMAZON IN RETAIL WAR
Consumers no longer choosing devices but platforms
The Christmas sales in New York and London have exposed what is being called “a war to the death” for digital adversaries Apple and Amazon.
The opposing strategies have polarized consumers into two factions: The Apple ‘Old Worlders’ who prefer the iTunes download culture and the Amazon ‘New Worlders’ who deride downloads as “so 20th century” and espouse Amazon’s alternative approach, where all music, movies, games and apps are streamed in real-time, rather than downloaded to a device.
Jeff Bezos, Amazon Chairman, said simply: “This is a post-web world. Tell me again why you need an operating system? You don’t need to carry everything with you when it’s all there in the cloud – and you can access it all on a cheap device.”
This is the dichotomy that sits behind the tablet war of the past year. Apple is essentially a device-based business selling cool products, while making only a small part of their profits from content and services.
The opposite is true of Amazon – the devices are just a way for them to sell more content. In some markets Amazon has just started to give away the Kindle Fire with every US$ 50 purchase of content.
Other manufacturers and app developers have not been slow to line up behind one of the old world / new world options. To date Amazon appears to be winning over developers with their wide user acceptance, lower prices and up to 70% revenue shares offered. All but one smartphone manufacturer now support the ‘new world’ model.
In the next few weeks it should become clear who will be the winner – the democratic retail crowds will have voted with their wallets.
There is a rumor around Wall Street today that Microsoft is about to file for Chapter 11. This really is becoming a post-web, post-PC world.
Warning: Hazardous thinking at work
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