Amazon, Apple and Google sell all sorts of things, and likely will sell more types of things in the future. But even when all three firms compete directly, they have different business models. Apple makes its money on hardware, Google on advertising, Amazon on lifetime value of a customer.
To be sure, Amazon sells lots of stuff, ranging from hard goods and electronics to books and video content. But Amazon's view of pricing always starts with "lifetime value of a customer." That frightens many observers, who worry about Amazon's profit margins.
But Amazon wants to maximize the lifetime value of each of its customers. Apple wants to maximize the profit margin on each device it sells, Google preferring to build advertising volume and revenues.
So Amazon might consider doing lot of things neither Apple nor Google would attempt.
Wednesday, July 11, 2012
Amazon, Apple, Google Have Different Business Strategies, No Matter What They Sell
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
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