“Both Apple and Amazon sell smartphones. Both Apple and Amazon sell tablets. They both sell music and videos. But Amazon can never be like Apple. Ever,” John Martellaro writes for TheStreet.
“The difference between Apple and Amazon is in the business model of the two companies,” Martellaro writes. “Currently, Amazon is about the business of laying the groundwork to not just sell stuff more efficiently but to so completely understand every customer, in a digital sense, that it can greatly flourish by selling ever more stuff… The self-admitted basic business model of the Amazon Kindle Fire and the Fire smartphones is to reduce the friction when shopping… The long-term effect of this kind of intervention cannot be favorable for a company, no matter how good it makes the bottom line look in the short term. That’s because it flies in the face of what people consider more important than spending, and that’s human responsibility. A rough analogy is a bartender who keeps on selling a customer strong drinks late into the night because it’s good for business. Then the customer drives home — with predictable results.”
“Apple has had quite a different history than Amazon. The passion of Steve Jobs (and now Tim Cook) to use technology to make our lives better, to reside at the intersection of the technology and the humanities, means Apple has a different business model for selling hardware,” Martellaro writes. “Apple isn’t isn’t trying to sell stuff for the sake of commercial success. Apple sells things that allow us to be more human, more empowered and have more dignity. For that, Apple is embraced and rewarded financially.”
Much more in the full article here.
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]
Love how Wall Street and “the haters” are trying so desperately to coronate Bezos as Mr. Innovator. What a joke; if ever there was a CEO who is an innovator, one doesn’t have to look further than Tim Cook. Go Apple.
> Apple isn’t isn’t trying to sell stuff for the sake of commercial success. Apple sells things that allow us to be more human, more empowered and have more dignity.
Well, I’m sure that is true… But it can be about selling hardware for commercial success too, and still point out the fundamental difference between Apple and Amazon (without the philosophy).
Amazon is a retailer, and profits mostly from selling things it does not produce. Amazon primary goal is to sell other people’s stuff. Amazon’s services (for selling things) are the core business and profit centers. Selling its branded “selling machine” products is a means by which Amazon meets this goal, so Amazon does not need to make a direct profit on selling that hardware.
Apple mostly profits from selling its branded hardware products. Everything else Apple does is the means to increase sales of those products, and maintain customer loyalty. Like Amazon, Apple also sells “things” (music, ebooks, apps, non-Apple retail products), but those services are NOT Apple’s profit center. Therefore, Apple does not need to make a direct profit from its services. They are “value-added” services.
And this fundamental difference is why Apple can afford to have that “passion” to improve its customers’ lives. The motivation of Apple and its customers are aligned, because exceptional user experience is what sells Apple’s products and keeps customers loyal. And exceptional user experience is what customers want. Apple’s services are part it this user experience, but Apple is not driven to profit from the services themselves. The services are there to enhance the user experience, so they will never be annoying and manipulative like a “used car salesman.”
Amazon, on the other hand, just wants to sell you “ever more stuff.”
Apple does feel pressure to sell. This is why products have been more buggy the past few years. They feel the pressure to continue to grow their business. The larger they get the more difficult it gets.
That’s not really true, in the big picture. I have not personally noticed that Apple’s products have become “more buggy the past few years.” I think I’ve had fewer problem, as Apple better integrates its products and services. My overall user experience has improved.
However, there may be more customers reporting problems. But that is because there are orders of magnitude more Apple customers now compared to the Apple that only sold Macs. The problem rate may have stayed the same, or even gone down, but there will be a lot more reported problems coming from 100 million customers, versus 1 million customers.
Apple has had a history of stinker products. Not that they were bad. But you cannot produce 100% of the time, a zero defect product. Some things slip. Apple has not been getting worse, frankly they have been getting better. Since the switched to the aluminum unibody designs… Quality has been amazing. Their method of assembly though, makes Woz jump out of his skin.
Please give examples, rob.
The only example I can think of is the hinky Home button on the iP4, which was changed due to customer pressure for a less ‘clicky’ button.
Not Apple’s fault.
Antenna gate is an example of hardware. Software bugs seem to be numerous. Don’t get me wrong I like Apple and I have many Apple products. I have the 64 gig iPhone 5s. The phone locks up and requires reboot. In Contacts I click on the phone and go to Safari. Just a couple of examples. I’ve contacted tech support and, I’ve been in the Apple Store. I get no answers. I reloaded my phone from backup and also started from scratch. Nothing has changed. Prior to iOS 6 you could not beat this phone. Sorry but I do believe it has changed. I truly believe corporate size is in part the problem. Apple has gotten too big.
“The passion of Steve Jobs (and now Tim Cook) to use technology…” Blasphemy! Tim Cook knows not the passion of Steve Jobs. He may have witnessed it but he sure as hell doesn’t have it. Stupid, stupid statement. Just one small example – Steve never, never promised “great products in the pipeline” without there being great products in the pipeline.
You wouldn’t know a great product if it bit you on your ass.
Ooooo, it’s jay the jackass spouting his usual trolling rubbish.
Articles like these is what fuels the reference to Cult when it comes to Apple. I took a shower after reading the scripture of Apple presented in this piece. Apple Inc. is about the money like every other company on this globe. How can anyone write a piece like this and it not being stopped from being published? This is dangerous stuff.
Yes, Apple is all about making money, which is why they don’t do Loss Leaders. But they don’t make junk, either. Apple does it’s market research and goes for the market’s most desirable demographic. Other companies *coughSamsungcoug* flood the market with as many products as possible to see what sticks.
Apple is on a good run and the pressure continues to mount to continue to innovate and that will be their downfall as it has been for Sony and others. 87% of the worlds smart phones run Android, 1.4 billion PC’s run Windows and they too feel the same heat everyday. Tech giants have a limited shelf life.
87% of the Android phones are feature phones.
Only one manufacturer, Samsung, makes money selling Android phones. All others are losing money selling Android phones.
The only PC Windows makers who make real money are HP and Microsoft. All others break even or lose money.
Apple makes billions each quarter selling PCs, iPads, iPods and iPhones.
Looks to me like Apple is doing great and almost everyone else is in big trouble.
However, the Ad agencies, especially Google, are doing OK.
Lenovo is now the biggest PC maker in the world but this said my point is that tech companies are always vulnerable for a rapid decline. Apple depends on folks always replacing their devices via an appetite to upgrade but that ship has almost sailed and the sagging numbers on iPad is just the beginning. I own an iPad 4 and will not need a new tablet for a number of years.
The once ridiculed larger phone format that Apple will introduce will no doubt sell very well but within weeks Google will push the envelope even more and that is already in play as we speak. Apple has coped a lot of Android and BB10 features which is not revolutionary in any way shape or form.
Google has never ‘pushed the envelope’ of anything but search engines and customer tracking/ad feeding. The end. They have some promising speaial projects out in left field, but they’re kept as special projects, so far. Everything else is more trend following than trend setting. That’s blatantly the case with Android anything. Talk about ‘not revolutionary….”
So is Google now paying people to troll around here?
I don’t agree with the article – both companies exist to sell products. Different ways of selling, nevertheless, they are both selling products.
I have benefited from both Apple and Amazon. I benefit from both their products and services.
I have owned four iPads, two iMacs, one Macbook Pro, three iPhones and an iPod Nano so I think I understand the Apple universe fairly well. For the most part, very good products. When they were not so good, Apple Care did a fine job of fixing the issues.
On the Amazon side, I have had to purchase two book cases because of the number of books that I purchased. These books were not carried by the local bookstores nor did they even know about these books. In addition, countless other products sold by Amazon have enriched my life. Because Amazon is a trustworthy company with a good return policy, I have risked my hard earned dollars on several unknown products that I would never have purchased from other retailers because they fail to support their customers. These gambles on unknown products have for the most part also enriched my life.
Competition is good – Amazon is keeping Apple on their toes. I told Tim Cook this several months ago after trying out a Kindle Fire 8.9 HDX. Which by the way is a very good device – better than an iPad 4 but inferior to an iPad 5.
it is companies like Apple and Amazon that are keeping Microsoft from domination.
In other news, Google’s business model is based on advertising.
I want to know where this bar is.
Bull.. Amazon is the benchmark in customer service Apple a close second.