Amazon’s biggest mistake: Not begging for a partnership with Apple

“Why did Amazon take the massive step of developing and producing its own hardware beyond the original Kindle readers and Kindle Fire tablets?” Rocco Pendola asks via Seeking Alpha. “The tablet made sense as a natural extension of the Kindle reader. But, beyond that, Jeff Bezos lurched into futility with the probably-failed FireTV, the no-doubt-it-failed Fire Phone and the it-will-most-likely-fail FireTV Stick. What’s next? A watch?”

“To make money people actually have to use your devices,” Pendola writes. “And Bezos should have realized that beyond readers and tablets, it would be a tough, proving impossible feat to get consumers, even diehard Amazon Prime account holders, to fall in love, practically and psychologically, with even more hardware from Amazon.”

Didn’t Bezos pay attention to the numbers from last holiday season?

• On Black Friday 2013, Apple’s iOS accounted for 28.2% of all online traffic versus just 11.4% for the market share leader, Android.
• iOS was the operating system of choice for 18.1% of Black Friday 2013 online sales compared to a paltry 3.5% for Android.
• iOS devices generated more than half a billion dollars in e-commerce sales versus a measly $148 million for Android.
• Of those sales, iPad owned Android with a 77% share of sales.
• Of the above-mentioned total, iPhone users executed $126 million in Black Friday 2013 online sales.

“Don’t expect those numbers to change much this holiday season unless, of course, they skew even more sharply in Apple’s direction. In fact, as I reread the data, I second guess my contention that Bezos was indeed correct to go ahead with Kindle Fire tablets,” Pendola writes. “But I’ll suspend my cynicism as a happy Prime member who bought Kindle tablets when they came out, made some purchases on them and promptly set them in a drawer to collect dust in favor of iPad.”

Read more in the full article here.

Related articles:
After Fire Phone sales flop, Amazon looks to become official vendor of Apple iPhone 6/Plus, source says – October 29, 2014
Amazon posts worst loss in over decade; stock plummets – October 24, 2014
Bezos’ Misfire Phone: Amazon cuts price of Fire Phone flop to 99 cents – September 8, 2014
Bezo’s Misfire Phone: Amazon has only moved 35,000 Fire phones, data suggests – August 26, 2014
Bezos’ Misfire: Fire Phone flops like a dying fish – August 11, 2014
Amazon’s Misfire phone could be 2014’s most epic flop – August 6, 2014
Amazon’s Misfire Phone: Why the Fire Phone will fail – July 30, 2014
Wall Street’s patience with Amazon’s losses wears thin – July 29, 2014
Amazon shares tank after wider-than-expected $126 million loss – July 25, 2014
The Wall Street Journal reviews Amazon Fire Phone: A gimmicky mess – July 25, 2014
Gizmodo reviews Amazon’s Fire Phone: Don’t buy it – July 23, 2014
Amazon accused of bullying smaller UK publishers – June 26, 2014
Why you shouldn’t buy Amazon’s Fire Phone – June 22, 2014
Amazon’s Misfire Phone: How Jeff Bezos failed – June 19, 2014
Amazon’s Fire Phone might be the biggest privacy invasion ever – June 19, 2014
Amazon launches shopping machine masquerading as a phone – June 18, 2014
Amazon Fire Phone’s Firefly feature: Apple’s iPhone already has it – June 18, 2014

29 Comments

  1. Amazon’s business plan seems to be to sell everything to everyone and then once they are dominant they can jack up the price and make big profits and that people will just spend ever increasing amounts of imaginary money.

      1. With Alibaba entering the fray I think their 15 minutes of monopoly dominance will be just that in the longer term. If they do a deal with Apple Pay then 15 minutes might be optimistic. Yes Amazon may well regret not cozying up to Apple.

    1. Best summary is from an article on Slate:

      “Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don’t even buy anything from Amazon.

      It’s a truly remarkable American success story. But if you own a competing firm, you should be terrified. Competition is always scary, but competition against a juggernaut that seems to have permission from its shareholders to not turn any profits is really frightening.”

      1. I have had discussions with Amazon investors. They don’t know that Amazon is break even or has lost money over the last few quarters. These people invest invest in companies they “like”. There is a lot of people that like Amazon’s low prices and quick delivery.

    2. “Amazon’s biggest mistake: not begging for a partnership with Apple”

      That is not a mistake, much less the biggest.

      The fundamental mistake is designing products and services for greed and making very small or no profit, or even losing money. Making it up in volume is a fallacie.

  2. To be fair, the fire TV is pretty awesome. I have two apple TVs and one fire TV (and a fire tv stick on preorder). The fire tv has great voice controls and is significantly more responsive than the apple tv.

    1. And has games and other apps as well as a really great controller. The interface isn’t that great, but not terrible. I too have a handful of Apple TVs and a Fire TV. Essentially, every TV in our houses gets an Apple TV, while just our home theater has a Fire TV.

      Contrary to the article, I believe not only is the Fire TV a good product, but I believe it’s selling reasonably well.

  3. Thats exactly happened to two family members who had the Amazon tablets – initial interest & use, then stuck in a drawer and now using an iPad.

    Granddaughter has the Galaxy S3 and can’t wait to get my iPhone 5 when I upgrade soon to iPhone 6+. She’s a special needs kid and even SHE sees & knows the difference.

  4. Good ol’ Blind Squirrel Rocco found a nut today! He’s right on this one: Amazon should have partnered with Apple instead of trying to compete in the hardware space.

    Kindle Fire, fine. Natural evolution of the Kindle. But the “higher-end” tablets and Fire Phone shouldn’t exist. Jury’s still out on the Fire TV, which makes more sense to have in their lineup as a way to stream content from Prime. But I doubt that’ll succeed either.

    1. One problem with your support of Rocco’s premise: Apple would never, EVER partner with Amazon. At best Amazon could have become an iPhone reseller and perhaps – PERHAPS – negotiated with Apple to have the Amazon app pre-installed on iPhones (although I doubt it because Apple has been adamant, even with its mobile partners, about not pre-installing apps).

      1. Never said Apple WOULD do that. I’m just saying Amazon should have jumped on the Apple gravy train from the get-go. And you’re wrong about Apple not partnering with other companies to suit its own goals—Nike, IBM, all the banks, providers, and merchants involved in Apple Pay, U2 …

        If Apple could find a way to make a partnership with Amazon work for them, I believe they would. That does not mean I know what form that partnership would take.

  5. If the rumours of Amazon desiring to sell the iPhone are true there could be an interesting alliance in the future.

    Imagine this scenario, Amazon comes out with its own tablets and phone to help push Amazon products (not an unreasonable desire) but those are only meagerly successful or downright failures so they don’t have the intended purpose. Amazon then realizes that iPhone and iPad owners buy more stuff than Fire tablet and phone owners do. Amazon then partners with Apple to offer iPhones and iPads and there book is they offer free Prime if you buy the device through them. I could see them moving a lot of iPhones that way. It’s then a win win for Apple. One less competitor, one less company flogging Android and a whole lot more iStuff sold.

  6. I love Apple, for many good reasons. But I have also realized I am loyal to them in the same way a very religious person is about their religion.

    I use to shop a lot on Amazon, even had Prime at one point. For the past year I have shopped there a whole lot less, after realizations that stuff is just junk and clutter and there’s really not all that much stuff I need aside form most of my Apple products, clothing, and a few other select things. None of that typically needs to be replaced and I’ve found I can often find better deals on the stuff I do need to buy on other sites than just Amazon. But with all this going on, I’m actually looking forward to a major competitor to Amazon that is more friendly with Apple.

    The worst thing you can do to cross me is by being anti-Apple or limiting my functional integration with my Apple things and whatever it is I am trying to do. If it doesn’t work with my Apple stuff you can forget it. If Amazon isn’t going to accept Apple Pay I’m just going to stop shopping there altogether, even though I never imagined I would say something like that. I use to love Amazon, and felt good talking about it. But even on a recent episode of Big Bang Theory when Sheldon said “Let me see if they have it on Amazon” I kind of cringed at the word thinking to myself, “wow, I feel so strongly about Apple that I would sever my longtime reliance on Amazon.” So I thought about why that was.

    Apple is a powerful brand, but it’s more than just that behind it: it’s because Apple is a life experience. I am a very busy person. I work full time for an employer, I run a separate business from home, and I go to school full time online, and when I’m not doing all that I watch movies or tv shows on iTunes. Literally all of those things are done entirely on Apple products. A large part of my entire life is interacting with these amazing products and the seamless ease in which they all work together makes my life easier and more efficient. If it weren’t for how easy all these things work together, I probably wouldn’t have time to do all those things in a day.

    So this is why we are loyal to Apple, and if you’re going to start fucking up our day for the 10 minutes we are in your store by not doing something as simple as accepting Apple Pay, then it’s definitely going to piss us off.

    1. Apple is a way of life, just the way Christianity is a way of life. It’s like stores saying, we don’t want Christians in our stores, only Catholics, Muslims, and our brand new religion Junkianity. Sure it’s not the same as religion, but people feel just as strongly about it.

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