If Apple gives up its position of industry leadership in 2012 the only company capable of assuming that role is Amazon.com. What other company is there? In the PC space giants like HP and Dell are good followers, not leaders. Intel doesn’t even see itself in such a leadership role. Microsoft is having trouble just holding onto what it has already while Google is a herd of cats. Oracle is too enterprise-centric and everyone else is too darned small. That leaves Amazon.
This doesn’t mean Amazon is a perfect or even an easy replacement for Apple as a design leader because in many ways Amazon is so much less than what Apple has become. But in other ways Amazon is so much more as we’ll see below.
Amazon lacks Apple’s design sense, but Amazon has shown through its many Kindle models an ability and willingness to learn. This is a big deal. Most companies (heck, most people) don’t really learn anything unless their ass is on fire. One company can copy another, sure, but fully adopting another company’s philosophy almost never happens except in desperation, which is usually too late. Amazon is different. They are willing to do the work to get things right. Today’s Kindle Fire is far from perfect but tomorrow’s Kindle Fire will be much, much better.
How many tries has it taken Microsoft to get to Windows Phone 7? Amazon can do it quicker.
Amazon is led by its founder, Jeff Bezos, who really wants to assume the Steve Jobs role. Being led by an inspired founder is vital as Jobs showed through his return to Apple. Bezos seems to me the only CEO of the companies mentioned here who has balls on the scale of Steve Jobs. Bezos is willing to make big bets on new markets. Beyond Jobs even, he’s willing to accept financial losses as a cost of making those bets. With another decade or more available to him as CEO, absent some horrible accident, Bezos is unstoppable.
And here’s the part that many people don’t understand: Amazon can scale its business to a level far beyond anything Apple could ever have imagined.
Steve Jobs had extraordinary success at Apple, growing the company more than 300X in market cap, but how much more can Apple grow? Apple as envisioned by Jobs could grow to be the biggest computer company, the biggest consumer electronics company, the biggest music company, the biggest telephone company, and the biggest TV company — Apple+Sony+Warner Music+Verizon+Liberty Media. That’s big, but it’s an imaginable number — a number with very real limits.
But Amazon competes with all those same companies and Walmart.
Apple would never sell cars, for example. Can you see Amazon selling cars? I can.
Bezos and Amazon are willing to do the hard work and make the big bets to assume Apple’s leadership positions in computers, music, video, and consumer electronics. Then they’ll translate that into every other customer-facing industry as well as the Cloud.
Amazon.com will be the world’s first $1 trillion company — not in 2012, but eventually.
You have jumped the shark, Bob Cringley. Jeff Bezos is no Steve Jobs.
I call ’em like I see ’em, and while my timing may not be perfect I’d say the trend is clear.
‘The trend is clear’ –
Luckily it is your opinion and anyone can sprout any crap they like and no one can stop them that is the trend too.
Go back to manufacturing phones or whatever the hell it is that you & your bowlcut do.
And you are dead on right about Jeff Bezos and Amazon. Jeff Bezos is a great leader with vision and guts.
The only people who think Jeff Bezos is a great leader are people who have never worked for Amazon.
Bezos is a BOZO. He’s a D player who thinks he’s an A player and has been hiring F players for decades while preaching a lot of BS.
Amazon is a retailer, it is not a tech company. It can’t even keep its damn website up consistently, let alone, innovate on it. The current design has been there for nearly a decade, and the back end is almost 2 decades old now.
Amazon is an example of excellent corporate PR. Has a lot of people snowed.
Amazon is all hype, no substance. Apple was all substance, which produced its own hype.
Everyone has their own definition of hype and substance. I’ve never known the website to be down. The products, ordering, shipping, and databases are the substance and the website doesn’t get in the way, as often happens with so-called “modern” websites that concentrate on appearance and high-rez displays. The only way I can now enjoy reading cnet, msnbc, and pcmag articles is with the “Readability” plug-in. That wasn’t the case with the older version of those sites.
While I’m a Bezos fan, I don’t seem him trying to occupy the same space that Steve did. Steve tried to find elegant technical solutions to problems we didn’t know we had. Bezos is selling us stuff. The Fire is highly derivative, and was created solely to make it easy for customers to buy more stuff. As a device it has none of the elegance that an Apple gadget would have.
Amazon may be very large, but I don’t see it ever creating the kind of products that Apple has been creating.
That’s not really the point. In the 90’ies MS was the tech leader and they weren’t design focused. I think Steve’s design focus might even have been holding Apple back a bit. Jeff doesn’t seem to care about that, I think he’ll just be exploring what people like best and focus on that.
There are lots of Apple haters, MS haters and Google haters. But I haven’t seen much Amazon haters yet.
Further, I think you are seriously underestimating the momentum Apple already has. I can’t prove it, but I suspect if Apple can just follow through on the things already in the pipeline, they have about a decade atop the tech world. Maybe more if they invent just a few more things.
We’re right at the start of the age of the tablet. No one is going to replace that without putting in a decade of work or more. Look how long it’s taking Microsoft and they have so many resources to throw at it. No one can really catch up. This next period is already decided.
Amazon is indeed getting into an ever expanding list of markets. What isn’t following though are ever expanding profits. Unless the company makes money from the new markets it enters, it shouldn’t be entering them. This is something that Steve Jobs clearly understood, but does Jeff Bezos?
Also there is a great deal more profit potential in making AND selling things, than just selling them. We can flip your argument: Apple is a retailer as well as an electronics producer. Apple retail by itself, is immensely profitable — and I would bet that Apple retail’s profit growth curve is actually much steeper Amazon’s. Who has the brighter future again?
Yeah, it make sense to me.
There will be more of a merchandising than product innovation angle to his innovations. In my book he’s already beaten eBay as a used merchandise marketplace and he’ll transform products into services.
The only issue with Amazon’s willingness to learn is that the same could be said of Microsoft. That’s not what made Apple unique or got them to where they are today. I think it was their willingness to launch products that were truly revolutionary, different to the point of swimming against the tide. A phone without a keyboard. A tablet without a desktop OS. A tiny laptop that didn’t sacrifice functionality.
Amazon has shown none of this kind of out-of-the-box thinking. They’ll make ho-hum products that may or may not find success. They’ll do just fine. Their business is solid; but they won’t supplant Apple in consumers’ imaginations (Bezos has none of Jobs’ charisma) or inspire the same kind of loyalty.
Amazon’s EC2 and related services show OOB thinking, especially for a retailer.
Wasn’t that more of “Oh, here’s this thing we use internally – born out of necessity that we’ve decided to open up and charge for” more than a ballsy gamble? They were using it and it worked fine…
That’s not the historical time-line.
The timeline is that Bezos passed down an edict that all Amazon software was to be written as services, and the HW managed in such a way that it ran these services.
Once that had been done — but only at that point — it was feasible to open up the HW to the outside world and have them run similar services.
Nobody is “Steve Jobs”. The question is who will be the biggest, most forward-looking CEO of brand, which is not the same thing as “who is the next Steve Jobs”.
In a sense it is inevitable for Bezos only because, well, of the dot-com wave of founders (’96-’02), he’s really the only one left, just like Jobs was (besides Oracle’s Ellison and Microsoft’s Balmer) the last of the 70s CEOs left (and Jobs only by even parts blind luck and sheer force of will to get him back there). Google’s changed hands too many times, as has Yahoo. Nobody else’s market share and size is big enough except Zuckerman, who’s in a totally different space than anything Amazon has, and is better off as an Amazon ally than enemy.
You’re right. Bezos is no Jobs. But Bezos is alive and from what we can tell, healthy. He has many years ahead where he only has to compete with the memory of Steve Jobs rather than the actual Steve himself; a far easier task.
I don’t mean this as a cruel knock at Jobs but it’s like the old joke:
“Two men were walking in a forest, when they suddenly saw a savage, hungry-looking bear. One of the men quickly put on a pair of running shoes. The other guy exclaimed, “You idiot! You can’t run faster than a bear …”
To which the first guy replied, “But I don’t have to run faster than the bear, I only have to run faster than you!”
Bezos has outrun his fellow camper. At least for now.
Sorry, being alive does not make you better than Steve Jobs. 🙁
“Bezos and Amazon are willing to do the hard work and make the big bets to assume Apple’s leadership positions in computers, music, video, and consumer electronics. ”
Making big mistakes does not make you big, it makes you Walmart. Only so big that your good ideas = mistakes = no more growth.
sorry but Cringely has put down Apple for years and years. He is not a supporter of Apple, only the things he can write.
Just a groggy early Jan thought.
en
Hmm… Brook, in the last prediction you commented that Bob was an idiot for thinking Jobs was crucial to Apple’s success… now you comment that Bob is wrong again because “Jeff Bezos is no Steve Jobs”?
So Jeff is not as awesome at being inconsequential as Steve is, or what?
Looks like you are mostly into dissing Bobs predictions.
Gosh, so right, Jobs had the soul of a genius artist while Bezos is a shopkeeper.
But wait, we’re talking about shopkeeping here….
(Bought apple 25, sold 350; Bought Amazon below 100 sold at 220)
Bought amazon at 178,…….Thanks Bob ! And Carnegie Mellon thanks you too !
I think you just may be right Cringely –
Happy New Year!
I could see it. Bezos has this air about him. He’s quieter than Jobs, but I think that’s just because he’s a superior poker player. I met him once for about ten minutes. Real nice guy. I seriously doubt he would remember me.
Only thing about this I have trouble seeing is how Amazon would suddenly become a leader in the computer business. I mean, other than Kindle, which if you squint at it, kind of looks like a computer.
Do you see Amazon doing desktops?
It’s own OS?
This could be interesting.
Please elaborate.
Does the desktop matter?
In the age of Android, does having one’s own OS matter? That didn’t help Microsoft’s phones, nor HP’s palm, and is hurting Blackberry while we’re talking.
Amazon’s playing it smart, as google has done in the previous few years: not betting EVERYTHING on Kindle. Just ’cause you have a Kindle doesn’t mean you’re locked into it for what you buy through it. They have their software on IOS and Android (which of all ironies means you can actually read your Kindle books on a Nook when it is in Android mode). The whole QT vs GTK/GNOME war shows that making a new UI framework is a trivial exercise once the basics (the Android and its Linux/Java baseline) are done, so keeping the Android framework but putting their own brand new UI layer is a trivial task.
Then it is just a matter of fighting off the patent wars, so I’m sure they’re watching the constant back-n-forths in the EU very closely (every 2 days it seems a new injunction is applied in the Apple-Samsung cases, crazy enough to make you wonder if ANYBODY can sell anything over there).
Actually, I’m wondering if Bob will have anything to say about the EU Patent Wars and whether or not Google will really step up to be the White Knight to protect HTC and Samsung, or will they let those companies go broke defending themselves in order to open up the hardware field all over again. That would be a stupid decision in my opinion, but then again, I’m not Google.
Yes. In fact, I would argue that the desktop is more relevant than ever. Over the last year, I’ve seen demand for mobile and mobile web apps increase dramatically, but I still can’t create apps all that effectively using the mobile devices themselves. Even if I could get a good IDE for Android or IOS, I still don’t have anywhere close to the computing power I need now (not at some future date) on the platforms. In fact, I’m pushing the limit on my existing two year old desktop set up.
So, as a developer, I’m finding myself in a position where I need to buy a bigger desktop, increase my memory exponentially, and switch to a better operating system (Moving to Mac from Linux) just to keep up with the demands I’m putting on my system because of mobile. The amount of virtualization I’m doing has gone from running the occasional WINE app a couple years ago, to running multiple copies of Windows, Windows Mobile, MacOS and Android. It’s just crazy.
At the current rate of expansion, I’ll need to start doing this once a year, starting now. Not complaining though, business is good.
I don’t see Amazon doing a computer or OS. There is little margin in a computer and some Linux variant will be more than adequate for a tablet and/or smartphone.
Might as well skip the desktop/laptop generation and go for truly portable next gen device
The only missing part of Amazon is a deliver strategy. They are reliant on Fedex, UPS or USPS (or whoever overseas). I wonder what would happen if Amazon owned UPS? Logistics baby!
Or bought in to USPS?
Hmmm, let’s see. Larry Page became head of Google and what does he do? Immediately starts cutting the number of Google products getting the company to fucus on a core set. Seems to me I remember someone do something like that at Apple. Oh also, Google+ launches under Page to go head to head with Facebook. No timid launch either. They went full in with Google+. As you’ve argued, Google is essentially now Google+. Sounds like balls to me. My money’s on Page. Interesting that you didn’t have a single word to say about him.
I said he’s herding cats. Google is a strange case. I think Page is doing well, but the DNA simply isn’t there to be a design leader.
> getting the company to fucus
Interesting typo you’ve got there. Should I buy a ‘k’?
Amazon sell cars? They used to a decade ago: https://www.usatoday.com/money/consumer/autos/mauto779.htm
Well at least Amazon is located near Microsoft and can attract any disenchanted geeks in Redmond, assuming Microsoft stays frantically idling.
Yes I can see Amazon not only launching and dominating tablets, but also having an Amazon phone, an Amazon TV and maybe even an Amazon computer, though that’s soooo last century.
They have the retail outlet and can stock it with whatever tech they can dream up, but I don’t see them really inventing. I think they’ll take whatever someone else has already launched, then internalize it, re-envision it a bit and come out with the Amazon version. I’m not sure how much leadership that really demonstrates. Techies will still flock to Google’s offerings as more relevant to an invention and not as fully baked as the fait accompli of a single product manufacturer.
Amazon is also setting up shop in Apple’s backyard (https://www.lab126.com/careers.htm), less than a mile from 1 Infinite Loop. Not a big operation… yet… but I expect that this division will produce a disproportionate amount of innovation within the company.
> Amazon.com will be the world’s first $1 trillion company — not in 2012, but eventually.
How long is ‘eventually’? Should be easy to answer if Bezos is key and you have a good idea how much longer he’ll be CEO…
Wow. This is the dumbest assumption. Amazon, Bezos is no way even close to Apple and Steve Jobs. Laughable.
He who laughs last laughs best. Read what I wrote, not what you think or assume I wrote. Jobs is gone and Apple will change with regression the most likely course.
Really? Okay, I’ll send this article to MacDaily News and hopefully they iCal it. 😉
Why do you assume that Apple will regress with Jobs gone? Freed of Jobs, Apple can very well take off faster now that he is gone.
Phong Le:
Yeah right. That’s how the reasoning went when Jobs was fired from Apple.
And how did that work out? Apple became a complete mess on the very brink of collapse that nobody wanted to buy.
Then Jobs came back…
You are a bit short on empirical evidence for the “free from Jobs” theory.
You’re assuming that the same people who ran Apple the last time Jobs left are the same people who are running Apple now.
Apple already started changing (and for the worse) in january last year. As SJ got sicker the beancounters and marketing bozos had opportunities to strut their stuff and came up with a multitude of badly thought out strategies, decisions and products. They embarked on a path of alienating and jettisoning their pro market, loyal independent resellers and power users. They decided that dumbing down to the “i” market was the way to go because of higher margin and that the rest were too much trouble (too many complaints, too much criticism, too many demands). Short range and stupid thinking. The complaints and demands of expert users are invaluable. they are doing the necessary product testing in real life (remember real life?) situations. Only the technologically illiterate (beancounters and marketing bozos) see that as an annoyance. Apple is now a classic case of huge company hubris. More and more a case of “love the products, hate the company”.
You’re imaging an awful lot here. There is ONE solid example of what you are saying — the Final Cut Pro business — and that can be chalked up to incompetence and mistakes.
Everything else is based on an assumption you (and various other people) have that Apple has some weird grand plan to get rid of the mac and replace it with iOS. Let’s be quit clear — this plan exists ONLY in your imagination. ALL Apple have done over the past few years is unify those aspects of iOS and Mac that it makes sense to unify. This has led to an awful lot of bitching about very minor issues (the new scrolling model sucks, the new full screen model sucks, etc) which has basically disappeared as the whiners get used to the new model and realize that it actually works pretty damned well.
The Final Cut Pro debacle actually had Steve Jobs written all over it — cancel a super-successful existing product, go all in with new done from scratch product. He did it with the iPod Mini, he did it with iMovie. I am sure there are plenty of other examples.
You failed to mention the phenomenon that is the Apple Store. Apple has been building them for 10 years. There is still a lot of growth potential both in the US and worldwide. I believe tech oriented people tend to overestimate Amazon but every new Apple Store builds and reinforces Apple’s place inside and outside the tech world.
Apple is massive in online presence: AppStore, Mac AppStore, iTunes Music, Apple Web Store and plenty of room to grow. Amazon even more so online. But does Amazon even have a strategy for storefront? Apple does and it is executing better than anyone could have imagined. It is probably heresy to say it but I think Amazon’s web only presence is a limiting factor compared to Apple’s more balanced approach.
Apple store has 2 problems to it: 1) DRM (and people’s acceptance that as long as they’re stuck with DRM, then Netflix/Hulu rental is just as useful as iTune rental in such a case and people will ALWAYS choose fixed-monthly over itemized pricing (as the phone companies can well attest to), and 2) there’s more to sell than music and video (and video rentals) and cheap apps. a LOT more, and while apple can enter that market, they’d be doing so only as a branding front to other companies and thus be dependent on them.
This was NOT Steve Jobs’s way, that of being stuck with other companies (think the Motorola/Intel changeover) for his own success, and Apple likely will continue to model themselves as not needing anybody else in order to remain on top. This may end up their downfall.
Except fixed rental (subscriptions) did not work for music at all (will be interesting to see whether iTunes Match leads to significant conversions of the hold outs). Also, Netflix isn’t exactly running on all cylinders and its losing subscribers by the hundreds of thousands and Hulu is desperately looking for a buyer. The problem with DRM isn’t Apple since they are all doing it – forced by the movie and tv companies. Sony has made it substantially more difficult to play downloaded material on PS3. Microsoft will soon follow. Why? Because the media companies may be backed into a corner, but they would rather pull the pin on the grenade than hand over non-DRMed content. Moreover, they still foolishly hold out hope for government intervention and control of the Internet. Apple is no different from the other device makers except that it presumably has better insight into the mind of the ikea of Disney/ABC and others (like Sony).
Here’s a prediction that didn’t happen for cultural reasons. Apple would have sucked up Sony 4 years ago. Sony balked and it now would make no sense (esp. with Sony ditching their TV business).
The Apple Store is crippled by the terrible interface that is iTunes. iTunes is truly aweful for searching, and everyone I know hates how iTunes manages their purchased and ripped music. Amazon is 100x better for searching and purchasing.
“I know hates how iTunes manages their purchased and ripped music. Amazon is 100x better for searching and purchasing.”
Your arguments would be a lot more powerful if they were in the slightest bit coherent. You state that Amazon is better for discovery than iTunes (true), better for purchasing (arguable, and I think, false) but then go on to talk about how awfully iTunes MANAGES music — something Amazon does not do at ALL.
It ALWAYS comes down to this: yes iTunes sucks, but what is better? On the Mac there is nothing better, and there are no models elsewhere that seem worth copying. WMA is vastly more awful than iTunes, and the various Linux contenders are just sad.
I have no complaints with criticizing iTunes — god knows I do it myself all the time. But I think an HONEST discussion has to include the fact that, for all its faults, it STILL remains better than the alternatives — which says something pretty sad about just how awful the state of UI design remains in companies outside Apple.
I agree. Amazon has lots of room to grow. Their product design is ‘good enough’ so no awards there. But then Microsoft did not have very nicely designed products and it did not stop them. But from a strategic big picture perspective, Amazon rocks. They are more of a technology solution company so I am not sure that I would lump them together with Apple, HP, Oracle.
“Can you see Amazon selling cars? I can.”
Oh yes, it can not come too soon. The car buying process remains entrenched in mediaeval times, and is ripe for change. Name any other consumer product that requires negotiating a price – that we still endure this is absurd.
In fact, I’ll never buy another NEW car until I can order it online, either from the manufacturer, or Amazon.
People are missing the point aren’t they? It’s not about Bezos vs Jobs or even Amazon vs Apple, and certainly not Google vs anyone. It’s about Amazon growing and growing which is all they’ve been doing snce day 1. Regardless of whether anyone thinks Apple will run out of “cool” someday, someday Amazon will be bigger than everyone, period.
Good call.
What about the Sales Tax exemption? Surely this is an enormous risk to Amazon? If the States grab back sales tax (as some have done I think), Amazon’s prices will fall very much more into line with everyone else’s. Moreover, Amazon is incredibly strong in the US simply because of this exemption. In other countries, it is not as though there is no Amazon presence, its just far, far weaker – largely because of the lack of price advantage and lack of product range (check out Amazon.ca for one 10th of the content!).
The sales tax exemption only matters if you believe that a sizable fraction of people are buying at Amazon solely to avoid sales tax. I DON’T believe this. I believe they are buying at Amazon rather than locally because the experience is all around better — it’s easier to find what you want, there is better chance, there are reviews to guide you and warn you off bad products, etc.
Given all this, I don’t see sales tax at Amazon as mattering much at all — and, personally, I think Amazon were stupid to fight this as aggressively as they have. It makes them look bad to a large fraction of their customer base while, IMHO, having very little real impact on their business.
The advantages of online shopping are availability and convenience. That applies to all online merchants, not just Amazon. Ultimately one chooses where to buy based on other factors as well, especially total cost. So Amazon should definitely fight the sales tax as long and hard as possible since it affects that critical aspect of the shopping experience.
Amazon won’t drive the industry because it’s business model is to sell other people’s stuff. Even their own products they sell at break even or a loss so that they can sell other more of other people’s stuff.
You mention WalMart. Sure, they can have that type of influence where they lean on suppliers to make bad deals, but WalMart can’t move the fashion, gardening, or toy industry.
Unless Amazon starts playing a different game where they actually try to make money on the basis of their devices and not on retailing they won’t be driving force. This model has no incentive to innovate on user experience or anything cutting edge. That type of R&D would kill the “give away the razor sell the blades” business model that is the current Kindle strategy. A good enough device that works as an Amazon vending machine is great for them, but that doesn’t make them an industry leader.
Interesting take on the landscape…
I should think that Amazon with it’s margins at less than 4% would have to sell the whole world to become the first “trillion dollar company” – even with it’s 100 plus P/E multiple.
You of all people understand how Apple makes it’s living not through superior market share but rather taking aim where the most lucrative parts of the market lie. Combine this with China coming on line (and their passion for all things ‘Apple’) – this may well delay your timing of the end of Apple’s leadership role…
“The king is dead…” but we’ll see who reigns supreme…
Rich:
it’s = “it is”
its = “of it”
Think about this, it will serve you well.
“its” = “the possessive of it”
I don’t think Bezo/Amazon is a credible Jobs/Apple replacement. It’s possible, even probable that no one replaces the Apple we knew with SJ. Not only was he unique, but there were timings and circumstances that acted to magnify his effect.
Sorry to say it, but I think the tech world will just get duller and no company/person will step into the same role.
Many of these comments seem to be from Apple fanboys who have bought in to the Steve Jobs is God propaganda. Have we forgotten Apple was near bankruptcy and their stock selling for under $10 just 7-8 years ago? Not to take anything away from Jobs, but let’s not get carried away thinking there will never be a successful CEO after Jobs’ death.
Will Amazon become the industry leader? Who knows. But they have millions of LOYAL customers that will adopt their products, and Amazon can always leverage their ecommerce muscle when necessary. Not to mention the fact that Amazon is one of the only companies these days that truly understands customer service.
It may not happen this year, but i can see this happening gradually over the next 2-4 years.
Fact check: Apple’s near-bankruptcy was in 1997, a lot more than 7-8 years ago, and immediately before Steve Jobs came back to Apple. It is very odd that you would consider this event as evidence against the Steve-Jobs-as-God meme; it strikes me as just the opposite.
“But they have millions of LOYAL customers that will adopt their products, and Amazon can always leverage their ecommerce muscle when necessary. ”
Other than the Kindle, what other products does Amazon sell that could be considered “their products”?
As for leveraging ecommerce muscle, how do you have any muscle when your net margins are less than 1%? With such tiny margins, there’s no room for error. If there’s a global recession, then every b&m store will be on the ropes and cutting prices to the bone, forcing Amazon prices down as well. They can’t afford to cut prices any more than they have with 1% net margins. That’s not muscle, but skin and bones.
Bob’s nailed it. The problem with Apple, MS, Google, B&N et al is that they all sell commodities. Computers are a commodity. Software-ditto. Search/ads-ditto. Cars-ditto. Books-ditto. These companies all need to somehow differentiate themselves, or else compete on price. Amazon comes at it from the other end–they love commodities of all kinds, and sell them better than anyone else. Bezos eats prices for lunch. I bet if someone else makes a better/cheaper e-reader, Amazon will sell it.
Bezos depends on the State Sales Tax exemption for a lot of that price eating. Apple has tried (and succeeded) to take commodities and value-add them. Samsung, Microsoft and even Acer are trying to replicate this (ultra books, etc). The win for them is not just profits but ability to resource massive investment in development. Being a commodity seller does not afford enough margin for transformative change. Amazon’s prime asset, which was built over many years, is its logistical capacity and efficiency, so was Dell’s. I’d say Amazon is at a greater risk of dethroning than even Apple.
Apple’s growth is limited to the number of people willing to be gouged for beautiful but outdated tech. They’ve also managed to piss off much of their old, influential following, trading content creators for raging iPhone trolls. Amazon will do to them what it did to Borders.
If Apple implodes (doubtful), it will not be because of the Kindle Fire. It will be self-inflicted. Amazon is a highly US-centric company, despite its international presence. Outside of those borders, the company is no unicorn. I am not sure it can extend its unique US advantages into other countries either (since there has been no evidence of this). The Kindle Fire is not available outside of the US, and nor is the majority of Amazon’s non-book content.
Apple still has lots of headroom to grow in computers, mobile, and consumer technology, and their margins are the best in the business. Their growth curve is much steeper than Amazon’s. They’ve gotten to be the second most valuable company in the world and they’re still growing at a remarkable rate.
Apple doesn’t NEED to sell cars. They don’t need to even sell 0.0001% of the products that Amazon sells. They’ve got a small, well managed product list, and every one of those products is desirable, sells well, and generates fat profits.
Amazon is a totally different company, with a broad range of products and very low margins. The hardware they DO make is sold at a loss or break even at best. It’s fundamentally made to be just good enough, not premium like Apple’s products. It’s not worth it for Amazon to try to take “leadership positions in computers, music, video, and consumer electronics.” They don’t really need to, either. All they need to do is be a credible #2, following in the footsteps of others who spend big bucks to actually create the newest products and categories. Amazon, like Microsoft before them, will clean up by copying others’ work and selling it at commodity prices.
This whole prediction is predicated on Apple having a “fall from grace.” Given that assumption, one seeks another to fill that spot. Absent that assumption, though, all this comes to is “Uh, Amazon’s going to keep doing well in 2012,” which is hardly so interesting and doesn’t generate nearly as many pageviews and responses.
Bob –
I love how you like to mix it up. I’m impressed by what Bezos has done to retail, distribution, and the entire book industry. But where I differ from you is I do not see him as a perfectionist or someone who will always lead. That will make taking Apple down a task. Amazon does not have a great retail presence, does not have the streaming support of a Netflix or Apple, and is not “cool”. Bezos repackages technologies from others, almost in the sense of a younger Dell.
Sure Apple will cool off at some point, but for Bezos to get to $1 Trillion, he will need to fight off even stronger powers such as Walmart, Target, and even the likes of Directv. I just don’t see that happening.
I can’t see Amazon operating their own shipping companies, when they can use competion between the existing companies to get the best deal.
@ Steve Bryan Outside of the US there aren’t that many Apple stores, only 13 in Australia for example. And isn’t most of the buisness selling the content? Amazon has worked out how to sell goods and provide customer service without physical stores. They can sell the razor blades without having to invest in developing the razor themselves.
Who makes the most money from an Apple product being sold via Amazon? AppleStores are showrooms and places to build customer experience, deal with customer problems and foster the brand. Apple gets the best of both worlds – Amazon’s distribution and their own control.
More link bait.
A good read: “Why Amazon Is The Best Strategic Player In Tech”, by Venkatesh Rao, in Forbes:
https://www.forbes.com/sites/venkateshrao/2011/12/14/the-amazon-playbook/
That makes two experts who agree. Anyone else?
You have a loose definition of “expert”!
Bob, I think you’re on target with this, and no one here has yet mentioned AWS! Amazon owns the cloud now and is years ahead of everyone else, Google included. Cloud + mobile is the new paradigm and they are going to be central.
I think the bet on Bezos/Amazon is a pretty good one, whether it pans out. Wouldn’t have thought of it, I must say, but the additional logic I see is that one thing Amazon has done exceedingly well is thinking architecturally and building a truly manageable (so far, it seems) and at least reasonably flexible platform, both as a business and in technology. I don’t see anyone else thinking cross-channel/device in the DIGITAL realm like they are, and so I can see additional logic to betting on them. I think they are among the VERY few thinking of cross-traditional PC and phone and other devices effectively. That said, they’re not the only ones, I don’t know if I would make the same bet as you have here, but making predictions that anyone would say “well, of course” is useless (as those are things we “know”), the only predictions worth making are debatable ones…and I think this is a very interesting line of thinking.
Oh, and just to be clear, I don’t even particularly like Amazon as an operation, and I buy very little on there. So I have no prejudice in their favor, either.
If apple can’t stay on the leading edge, without Steve Jobs, then it will be eaten up by the consumer electronics manufacturers. Sony, Samsung, Rim. The hegemony is dead. Welcome to the multi-polar mobile world.
It’s all about the customer. Amazon does what it says it will do for you and… will stand behind it up to a point.
In the race for customer service I give Bezos a big win there!
And it builds on itself. This seems to root back to a “Steve Jobs”, quality.
I would bet few would say the same for Microsoft in that regard.
Steve Jobs’ DNA permeates Apple. They are a product-first company, profits/money come second. Amazon seems to be a typical profit-motivated company rather than an Apple-type who wants to make products that “enchant” (as Guy Kawasaki put it in his book).
Disagree in the sense that Amazon is willing to operate on lower margins than just about anyone else, yet they have thrived in that environment. So while profit is obviously important to them, they have also shown that they are willing to sacrifice *some* profit in order to build a valuable service, sales experience and/or customer relationship.
Beg to differ. Apple is a profit first company. Transfer pricing, lodging profits in tax free (or minimal) countries. Manufacturing in low labor cost countries. Destroying their independent reseller channels. Probably legal but morally questionable.
I agree that Amazon with Bezos is the only candidate to do this but I don’t see Apple losing its leadership role yet. Amazon has a long way to go to develop a team like Apple has, right now it is not capable of developing its own products which is why the Kindle Fire is not yet ready for prime time. That said, I believe that Amazon may well become the largest corporation in the world by 2020. There is a strong synergy between Amazon’s primary mission and Apple’s future products. I read a recent article predicting the state of retail in 2020 that pointed to the use of Siri in appliances (TV, coffee maker, refrigerator, etc.) working with Amazon to order and deliver products.
Well, I’ll leave my digital imprint on your site …and I trust my conscience to overlook the forensic evidence of my stray…
Steve Jobs has been the value creator ‘par excellence’ of the past few generations. Jeff Bezos is turning out to be a value destroyer without peers, notwithstanding the Walmart value-killing steamroller.
How much of a fool can one show all to be …than to wish upon magic to be undersold as food stamps for the soul, and claim it to be heaven simply… lowering its standard to match the downtrodden effect of gold…
Bezos is to Jobs what kindle is to rekindle …what fire is to aspire …what a half-life Bezos is to a timeless Jobs…! …and what the author of this blog is to me…
Cars are not such a big leap … but I wonder if Amazon could start selling mortages.
Bob,
I don’t think you are wrong. But, you will have to count this prediction as a miss in next year’s review.
This will not happen in 2012. The battle will still be ongoing. On yet another prediction, you are probably right, but too soon, and the time frame is too short.
In 10 years, when everyone is an Amazon hater, and the rest of the press are predicting their decline, then you will be able to count this as a good prediction.
Consider the possibility that while Apple begins a long, preferably slow, descent from its peak as industry leader, it may be a number of years before a new leader emerges. And that leader won’t be any of the players named above, it will be an organization that is right now too small to be on the radar.
An interesting prognostication to say the least.
I’ll certainly keep an eye on this in the months to come… on both Apple and Amazon, and any tectonic shifts in leadership.
Jobs was a commensurate *curator*. He didn’t invent, but he provided the filter that let only the really polished inventions make it to the finals. Apple innovating faster isn’t necessarily a good thing for a brand known for taking it’s time to come out with things that people can “just use”, which is exactly what they did. When I give a Blackberry to a two-year old, they’ll throw it at things. When I give an iPhone to a two-year old, they start browsing photos, watching videos and playing games. That’s something impressive, and the core of what they need to maintain.
If you want a good throwaway quote, “What Apple needs in 2012 is someone who can continue to see technology through the eyes of a two-year old.” 😉
Selling lots of shit does not make you the next Steve Jobs. It might make you the next Sam Walton.
How do you replace a Black Swan? Methinks there won’t really be a replacement for Jobs.
So how long until Amazon starts getting local stores that you can walk into ?
“but Amazon has shown through its many Kindle models an ability and willingness to learn.”
Yes, and Microsoft showed the ability to learn by iterating in public betas until it got things right, usually by the third iteration. How is Amazon different?
“Bezos is willing to make big bets on new markets. Beyond Jobs even, he’s willing to accept financial losses as a cost of making those bets.”
The problem with big bets is whether Amazon can suffer even one mistake. While Apple has had the financial strength of their balance sheet ever since the success of the iPod, does Amazon really have the financial muscle to flex? They are riding high on the strength of their share price, but we have seen the bloom fall off the rose, like Netflix and RIM, in an eye blink. It won’t take much for the market to fall out of love with Bezos’ mantra. They’re like China, growing fast, but always in danger of imploding. How long can Bezos juggle? We’ve seen Amazon drop in share price from $240 to $180 in less than 3 months.
Amazon’s historical margins are lower than WalMart’s. Their ability to grow their margins is ultimately bounded by WalMart’s pricing. Without the ability to make gobs of money like Jobs did at Apple, Bezos’ ability to lead the industry is limited.
“but how much more can Apple grow? Apple as envisioned by Jobs could grow to be the biggest computer company, the biggest consumer electronics company, the biggest music company, the biggest telephone company, and the biggest TV company”
Yes, and the naysayers were saying the same before Apple got into iPods, and the same before Apple got into iPhones and the same before Apple got into iPads, etc. It’s easy to say, “but how much more can Apple grow?”
Apple is still just a drop in the sea of PCs, about 5% globally. LOTS of room for growth. The iPhone is still just a fraction of the cellphone market, which will eventually be all smartphones. LOTS of room for growth. The iPad is just scratching the surface in terms of PC replacement. LOTS of room for growth.
“Amazon.com will be the world’s first $1 trillion company — not in 2012, but eventually.”
I assume you mean Amazon’ sales will top $1T, not it’s market cap. Amazon will need to sell $1T, if it ever hopes to reach Apple’s level of profitability. $1T at 2 to 3% net margins which is what Amazon has earned historically, is just $20B to $30B. Apple made $27B last year, and is going to make over $40B this year. So, Amazon will have to reach $1T in sales just to get near Apple, but it’ll never be worth more than Apple on a fundamental basis, due to its tiny margins. The trick is to somehow grow those margins, but I just can’t see it, when Amazon’s prices are bound by Walmart’s pricing. They could cut costs, but if they were so good at that, why are they currently only making under 1% on their sales now?
Amazon are however remarkably bad at logistics. Compared to most modern warehouses their warehouse systems are in the dark ages. By improving them its possible they could easily add 10%-20% to gross profits without any customers noticing.
Do you Amazon fans ever leave the country? Ever travel in Asia? Do you really think that competing with the Chinese in on-line retailing in China will be straightforward? Apple long ago proved it could attract a large and growing number of customers globally, but outside a few European countries, Amazon is either missing or irrelevant. Good luck with that prediction, Bob.
Hi Bob how do you see amazon in relation to Simon sineks great TED talk you linked to recently? It’s seems to me a company that knows what is does and how it does it without knowing why which could prevent it from really changing itself in the future. Grow or implode Apple for now is all about the why at the center of the golden circle …
Ten years ago amazon.com was considered a joke. It was operating at a significant loss, drowning in debt, and no clear sight of how it could ever be profitable. Today it is the largest e-commerce company, profitable, no debt, and very innovative, with expenditures on website research and development equal to the sum of all other e-commerce companies combined. If it continues to grow at a strong pace, it appears amazon.com may overtake Target in sales revenue. Truly a remarkable transformation.
May not make a difference, but Amazon is getting some bad press for its working conditions & labor relations in the distribution centers. Lots of outsourcing to curtail benefits, forced overtime, incredible stress on put on workers by a company that is obviously delighted to have such a huge pool of desperate unemployed from which to choose. Walmart’s reputation was stained by labor issues, & it may happen to Amazon as well.
Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. Here you can find a post by Telecomenzi and Galati
Hilariously bad prediction. Why? Because every developer on the planet thinks amazon stinks.
No software will come.
Why should a software developer care about a big online general store?
Jeff Bezos is the 21st century Ron Popeil – his level of product invention and design awareness is the home shop, DIY, regular consumer guy kind. He’s Ron at the next level if Ron had had the Internet to be able to market to the world. He can invent some things, but his genius is marketing and selling. I don’t think Jobs and Popeil are the same and I don’t see Bezos really understanding the computer/media/entertainment/Internet universe the way Steve was pulling it all together under Apple.
Sure Robert X (what does X mean)! Amazon snow balled the publishers into sub profit sales of eBooks. How long will publishers suvive in debt with Amazon being rich — Will we all self publish for nix with no chance to live? Just to make amazon rich? Its 2000 all over again but now books and not music.
Amazon.com will be the world’s first $1 trillion company — not in 2012, but eventually.
YES!!!
Because Amazon’s canvas is far bigger than Apple’s.
Innovation, it is a very afford much food for thought of the article, written by very good, I believe you will be a great harvest!
I really like Cringeley because he’s always been more like Steve Jobs than…me. Not too many ‘philosophers’ out there, ‘renaissance men’. All I know about Amazon is using the site a couple times. They use every f-word dirty trick in the book! Amazingly incendiarily bad marketing (this part is tough w/o profanity). Of course, I had to search for a site who’s only purpose was to publish Amazon’s phone #. There were 2 such sites. Then I was shuttled to the cubicle with a person who’s only function was to talk to the few who got through. She talked to me for 4 hrs! I stayed on to see how long. I recited every cheap trick Amazon pulled on me on my second purchase. Everything I had ever learned from my father’s business, his complaining, and my Jewish heritage. EVERYTHING they could do to trick more pennies out of my meager purchase of seaweed (I bought straight from Eden Foods from then on; what a pleasure THEY are). But any any any way, Steve Jobs really WAS a visionary and many of us underground share that Dream. It was The Dream that got Steve through and has us at the end of Phase 1 of the Communication Revolution. It was the Dream that aha’d Steve to so many unpredictable (even to him) moves. This Bezos jerk ain’t gettin’ us anywhere but back to square one.
I hope, as a philosopher, that we are near enough to the ‘Great Work’ (as it’s sometimes called) for us to be sucked ‘Furthur’. I see lots of us continuing to pitch in and create the parts we love. Maybe we don’t so much need a company any more. Ubiquity is setting in… and we can see what WE want more clearly now. BTW, there have been thousands of conjurors working throughout. Magic. How smart do you think Steve really was, anyway?
The polo shirts for men has been a wardrobe staple since its introduction in the 1930s. Fill your wardrobe with polo shirts for women from your favourite brands like Fred Perry, Animal, Billabong, Quiksilver and Ben Sherman. Whatever you’re looking for casual, comfortable and cool are easy to find in our extensive collection of cheap polo shirts for men.
[…] yesterday’s Kindle Fire HD announcements from Amazon, a reader reminded me of a prediction I made at the start of the year: “If Apple gives up its position of industry leadership in […]
[…] Amazon’s Kindle Fire HD announcement, a reader reminded me of a prediction I made at the start of the year: “If Apple gives up its position of industry leadership in […]
I will keep your new articles.I will read this article concern. I believe my spirit will get the further promotion.Will be sharing your wisdom with all of my associates!
Some examples of these fees are Discover’s new 2% why0 fee on all purchases made outside the United States, along with a bump from 3% to 5% fee https://www.airmax2012-online.com for allowing this to continue a balance in one credit card to a different.
Pretty great post. I simply stumbled upon your blog and wanted to mention that I’ve really loved browsing your blog posts. After all I will be subscribing for your rss feed and I hope you write once more very soon!
I love what you guys tend to be up too. Such clever work and coverage!
Keep up the terrific works guys I’ve included you guys to our blogroll.
Sweet blog! I found it while surfing around on Yahoo News.
Do you have any tips on how to get listed in Yahoo
News? I’ve been trying for a while but I never seem to get there! Appreciate it
That is a really good tip especially to those fresh to the blogosphere.
Brief but very accurate info… Thanks for sharing this one.
A must read post!
Hmm it appears like your website ate my first comment (it was super long) so I guess I’ll just sum it up what I wrote and say, I’m thoroughly enjoying your
blog. I too am an aspiring blog writer but I’m still new to everything. Do you have any points for novice blog writers? I’d certainly appreciate it.
you are in reality a good webmaster. The website loading velocity is amazing.
It sort of feels that you are doing any unique
trick. Furthermore, The contents are masterpiece. you’ve performed a great job in this topic!
Hey there! This post could not be written any better!
Reading through this post reminds me of my old room mate!
He always kept talking about this. I will forward this
write-up to him. Fairly certain he will have a good
read. Thanks for sharing!