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 has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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