Amazon Is Not A Serious Apple Competitor…Yet

| Editorial

Yesterday I wrote about analyst Brian White's confidence that Amazon's phone would not affect iPhone sales. In his praise, he said "Apple is unique in its ability to develop hardware, software and services that work together seamlessly.” While he's right that Apple is the only one right now, it seems that Amazon has some Apple-like aspirations itself.

This comparison is not entirely fair on the surface. Amazon doesn't truly make any of their hardware, nor does it make desktop/laptop computers. An even bigger distinction is that unlike Apple, Amazon doesn't control its own software, it merely rebrands a forked version of Android. But there are some pretty obvious moves from Amazon that make it clear it is gunning for Apple in at least a couple of these areas.

First, Amazon is certainly looking to provide an alternative to Apple's overall ecosystem with the Kindle Fire tablets and Fire TV, along with the newly announced Fire Phone. When the Fire tablet and the Fire TV were announced, each of them reminded me of Apple products, and seemed like Amazon's to establish some of the same pieces that defined Apple's approach. I feel the same way about the Fire phone.

All of these devices are nice enough alone, but each is much handier/more convenient if you have one or two of the others to go with it. Of all of Apple's hardware competitors, Amazon is the only company that seems obsessively focused on this idea that the whole is much larger than the individual pieces.

None of this makes Brian White's statement false. Apple truly does have an advantage that no other competitor has. Amazon, though, seems to be staking out the part of Apple's approach that it can compete with, and that's depth of ecosystem and a connected experience.

What will make this interesting to watch is that virtually all the differences between Apple and Amazon can change. In particular, we all know content is in a continual state of flux. This will all come down to user experience within an ecosystem. I'm looking forward to watching what happens next.

Bryan Chaffin contributed to this article.

Comments

wab95

Kelly:

Your point that Amazon are gunning for Apple by emulating features and components of Apple’s ecosystem is well taken, and has been observed by a number of others. Few, I should think, would argue contrarily.

Two martial arts principle apply here, firstly that fighting according to another’s strategy, a strategy that plays to that opponents strengths by the way, and a strategy that they’ve mastered and you have not, is not a winning formula. Secondly, that action is preferable to reaction. Indeed, in one fight studio I observed a sign reading, ‘He who hesitates meditates in a horizontal position’.

Amazon’s imitation of Apple’s pioneering work in creating an integrated ecosystem, and one that now is transitioning Apple away from hardware manufacturer to a platform deliberately and systematically organised around the end user, and whose primary outcome is not sales figures and marketshare but the quality of the end user experience, is ultimately a reactive and therefore a failing strategy that will never defeat Apple or leapfrog Amazon ahead of Apple in those outcomes that are meaningful.

Rather, Amazon are, like so many others, cementing their status as followers of the leader, and not so boldly going where Apple (and everyone else seeking relevance in the post-PC era) have gone before.

My personal view is that, in time and as the industry matures, it will move beyond the imitative phase we see today, in which the zero-sum game played out between Apple and Microsoft for PC dominance in the 20th Century, will give rise to first a multi-disciplinary and in later stages, an integrated industry with defined roles and contributions.

That industry, I would argue, will continue to be characterised by competition, but less in the already established markets, and more in new and emerging categories of products and services. However, amongst those top tier companies, such competition will play to the strengths of those survivors and thus we should expect certain categories of new product from them.

Analysts and modellers, particularly those who wish to anticipate where the market in tech is headed, should look for areas of potential overlap in excellence and capacity between those remaining tech giants, because that is where the competition, and therefore the growth, will most intense and greatest.

We are not there yet.

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