Apple’s war on Amazon begins this Thursday

“Apple’s most direct competitor in the future won’t be Microsoft or Google, but Amazon.com,” Mike Elgan writes for Cult of Mac. “With the release of the Amazon Kindle Fire, Amazon.com declared war directly on Apple’s core business model, which is to sell integrated solutions for the consumption and creation of digital content. Starting Thursday, Apple strikes back.”

Elgan writes, “Apple devices do all the standard things that phones, tablets, laptops and desktops do, but Apple’s secret applesauce is that iGadgets are optimized on the low end for “consuming” content, and on the high end for creating it. Apple’s unique business model is to profit from the hardware, profit from the software and profit from the delivery of content to those integrated hardware/software devices.”

“In a nutshell, Apple’s goal is to do for all content what it did for digital music — control it,” Elgan writes. “It turns out that the very company that has declared war on Apple is the same company that currently controls book publishing… Apple will never compete with Amazon.com in a soup-to-nuts online bookstore scenario, where the core competency is making deals with every book publisher in existence and managing incredible inventories of paper books. That’s not a business Apple wants to be in. But the future of books — self-published authors selling electronic books to be read on digital devices. Well, that’s an Apple business.”In other words, Apple won’t compete with Amazon for the present of book publishing, but for the future… Thursday’s Apple event has been billed as an ‘education’ event. And I have the feeling that Apple is about to take Amazon to school.”

Much more in the full article – recommended – here.

39 Comments

  1. Students will love being able to get all of their books and handouts in a digital format now that the iPad exists.

    I’m currently taking an instrumentation course. The first thing I wished was a digital format (which does not exist) for my course packs. I paid a couple bucks to park and there was a line up more than an hour long just to enter the student book store (new semester) to get the books. Now I need to haul the material around with me. I don’t have my book with me right now. I could be studying instead of wasting time on this forum.

  2. Not a bad article. But woe that website! It’s awful! What is that horrible stuttering banner ad on the bottom that I can’t get rid of on my iPhone? Why can’t I use reader on that site?

    Pathetic.

    Always enjoy MDN though.

  3. It turns out that the very company that has declared war on Apple…

    NO. Amazon never ‘declared war on Apple.’ Why does modern echnology writing have to be about marketing THRILLS and TRAGEDY and DRAMA?! This is plain old BS. (o_0)

    What Amazon did was slyly infer in their Kindle Fire documentation that the Fire was worth comparing to the iPad for some reason, when it is NOT. The Fire is just an eReader with some lame, slow Android functionality added. These devices are NOT in the same consumer market. The end.

    However, I agree with Mike Elgan’s point that these two companies have OTHER common markets into which the Fire and iPad can be applied. Specifically, both want to sell digital media, specifically books and music. Let’s hope their competition heats up, as the customer is bound to be the winner of the warz. And that’s kewl. 😎

    1. Yes! Someone who “gets it”!

      At the risk of introducing yet another lame analogy:

      Apple – a full service barber shop. Everything is available – hardware, software, content – at a reasonable price.

      Amazon – razor and blade sales in a discount store. They all but give away the Kindle (razor), planning on making it up on the profit of the media (blades) they will sell to you in the future.

  4. amazon made 63 million profit last quarter
    apple made 6.6 billion

    much of the press is hyping up this kindle thing to make an interesting ‘story’ i.e to fight the ‘champion’ you need to spice up the ‘contender’. Jeff Bezos is supposed to be the new steve jobs etc. in spite of the glaring profit stats (above).

    real fact is, amazon is so small (a threat) apple probably hasn’t even really focused on it (SIRI for example is probably a way bigger thing to Apple) , when it does it will be interesting.

    1. Wall Street likes to boost Amazon as being the next Apple and Bezos as the next Steve Jobs. Look at that multiple that Amazon gets. WS is implying that Amazon has a much brighter future than Apple. Basically saying that Apple is at the end of the road and Amazon is just starting. So it’s not just pundits and critics that think Amazon is more than just a small fry. I personally think that Apple needs to put Amazon in its place. You don’t see Apple poking its nose into Amazon’s core business. I definitely think that Amazon has tried to steal Apple’s core tablet business with a weak attempt using some low-cost, low-quality tablet.

      1. Apple did poke Amazon when it came out with iPad and iBooks. That screwed up Amazon’s Kindle pricing, and it forced Amazon to revise its pricing of mass market books. Whenever Apple enters a new market, it disrupts it in some way.

        Another thing—Amazon became huge by being able to undercut most other vendors on price (no sales tax), and by growing an army of vassal affiliates to supplement their own warehouses. Lately Amazon is in process of devising a new business model that would make up for the lost tax advantage from expected recession-instigated legislation.

        These are all signs of healthy competition, not really “war”. Wall Street types, bloggers, and pundits have their own business models, and the “truth” they are peddling has more to do with them than with any theory of companies’ natural life cycles. Isn’t it obvious that both Amazon and Apple are thriving? Why does anyone take these stories seriously? As Derek Currie points out, they are ludicrous.

        1. You got that right! Apple really squeezed Amazon’s Kindle pricing and plans with the iPad. Amazon went from making money on the Kindle hardware and holding book publishers by the nads (both for hardcopy or ebook formats), to struggling to find a response to the Apple juggernaut. Apparently, going profitless on the hardware and hoping to make that up on the content and advertisements was the best that Amazon could muster. It is a delaying tactic that won’t hold up over time, IMO.

  5. Up to now, most textbook publishers have been charging pretty close to the same price for an eTextbook as for a full printed book. Absolutely unacceptable. I am hoping for a major change soon.

    1. One more time… The cost of printing, shipping, etc., is *approximately 10%* of the cost producing a textbook. (Check the College Bookstore Assoc for data.) eTextbooks will not all of sudden reduce the total cost.

      1. Sorry 8, I don’t buy it. I have experience in publishing and know your source and the way they compute their data is not valid. There are exceptions, but $85 to $100 for a 220 page (as one example I saw a few weeks back) eTextbook is not justifiable. Want to try?

        1. Sure, I’ll try. It takes at least a couple of years to author a decent text — non-etext, that is — a real etext is much more difficult. Development, style design, graphic design, editing, art, composition, copy-editing, permissions, interactive element production, etc., etc. are all quite expensive. The easiest and cheapest part is committing the book to paper. With traditional (scientific) books, most authors now do their own composition/typesetting producing “camera-ready” files that can be just ftp’d to a print shop. By the way, it’s rare author in academia that gets over 13% of the wholesale price as royalties, and half that for international sales.

          I met with the president of a publishing company a couple of years ago to interview him for an article. He showed me the budget for *producing* an elementary physics text with all the ancillaries: $1.5 million. It takes a lot of sales to recoup that investment…

          1. A bit late getting back to you, 8.

            Again, I’ll disagree. You, and the publisher you interviewed, are using a traditional publishing model. That is simply not as necessary in epublishing. I understand how some of the traditional budgets are put together, but there is a different way of doing that. It takes stepping back and looking at the forest, not the old trees. I do not accept that $1.5 million is needed to put together an elementary physics text in the new publishing model.

            Authors who simply ftp camera-ready files to a printer cannot be costing $1.5 million. How could anyone come up with that amount? If that is the case, turn that publishing house over to me and let me save it before it goes bankrupt!

          1. I buy from Springer and I’ve never noticed something like that. What college class would use that as a textbook? In my day it would have been in the reserved book room of the University library, not toted around in a backpack. Talk about extreme examples!

            Besides, as I keep hearing here at MDN, everybody knows that water is wet.

            1. Nothing exceeds like excess.

              I was just going for the idea that paper is a small cost in textbook production with an over-the-moon example. Those Springer books are definitely research materials, not for classes. But class texts *do* subsidize those volumes, too.

  6. Amazon is a good company. Apple may indeed compete with them and be better where it does. But Amazon is a staple for many of us. It would make things where I am much more difficult without them.

  7. At this point in time, I’d say it’s somewhat of a stretch to say that Amazon will be more of a direct competitor than Google or Microsoft or, say, Samsung and HP. Apple competes with Amazon on the front of providing digital content to consumers but Amazon isn’t really a platform provider.

    Google is gunning for Amazon as well. When looking at it from that old axiom of “An enemy of my enemy is my friend” I’d say Amazon is more of a “friend” than a “foe.” I’m pretty sure that Apple isn’t naive enough to think it can make its iBookstore as dominant as iTunes and ditto for Amazon about making their mp3 download business as big as their Kindle bookstore.

    There will continue to be skirmishes between Apple and Amazon on the digital content front but that area is still minuscule in the big scheme of things compared to mobile devices, computers, and OS platforms and ecosystems.

    Personally, I like Amazon for buying virtually anything out there. I’m an Amazon Prime member to boot. The likes of Walmart and Target have more to worry about Amazon than Apple does. I’d much rather just order stuff online through Amazon than deal with crowds in traditional physical retail stores.

  8. I spit on the likes of Google and Samsung, but I’ll be damned if I’m going to turn my back on Amazon. As much as I love Apple, I buy a heck of a lot more stuff from Amazon, and I hold them both in high esteem. I’m sure getting tired of these instigators trying to turn us against anyone who isn’t Apple, or subservient to them. It’s downright idiotic.

  9. I’m annoyed as hell about the state of Apple’s iBookstore and how few titles it has in comparison and the difficulty of perusing its contents. Amazon is much easier and a much larger selection. Why hasn’t Apple simply come up to overnight parity with eBooks yet? Whats the deal widdat? How much data could that be? Aren’t publishers willing to have parity for all their e-books making them available to all iVendors? I would rather buy from Apple.

  10. I buy a fair amount online, as I don’t care to drive and American malls are so vulgar. From the first on iPad, I purchased e-books through both iBooks and Kindle apps, and mail-order items in the carousel of Amazon Windowshop. 

    Then one day, Apple dropped the hammer and Kindle and Windowshop apps would only allow me to add items to a wish list, then I’d have to go to Amazon.com, retrieve the wish list, and then order. All that removed the charm of One-Click ordering (which Apple licenses from Amazon, and works just fine in iTunes). Apple spoiled what had been an easy and fun shopping experience for me. 

    I wonder if anyone over at Apple has any idea how much money in impulse sales has been lost to Amazon, and to other sellers, by enforcing a policy that goes counter to their main guiding principle—providing the best possible user experience. I strongly suspect that that principle is, actually, a function of where the money is going. Sad and infuriating at the same time.

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