Amazon is undoubtedly one of the most successful e-tailers. It seems to effortlessly enter new markets and alter the landscape dramatically in no time at all. Barnes & Noble has gone, and even Apple is looking behind it’s shoulder now.
The tablet market hotting up:
The latest product is the Kindle Fire. A direct competitor to the iPad. Albeit with a smaller screen and Wi-Fi connectivity only, I am sure this is nothing more than Amazon’s first shot across the Apple bow. The similarities between Amazon and Apple are obvious. Both have a huge collection of content that encompasses films, books and music. Customers of both companies can store content in the cloud and retrieve it from anywhere.
But price clearly differentiates the two. The Kindle Fire, due out in November, can be bought for just $199. The latest version of the Kindle e-reader, can be acquired for just $79. This gives a clear indication of Amazon’s strategy; recently enforced by the CEO: ” We are building premium products and offering them at non-premium prices.”
Great products, low prices:
Amazon’s unrivaled ability to drive down the price of everything it sells, is what gives them a colossal advantage. This is supported by a suite of innovative services to grateful customers.
Amazon has invested heavily in cloud computing, and their future success is, to an extent, contingent upon the success of the imminent tablet. If the tablet is popular, this will boost sales of Amazon’s cloud-based content, in the same way that the Kindle e-reader boosted sales of e-books.
Apple and Amazon squaring up to each other??
A price war between Apple and Amazon may be sparked. Apple made $7.3bn net profit in the latest quarter. Their profit margin is in excess of 20%, compared to Amazon’s 4%. On these figures, Apple could be the worst company in the world to pick a fight with! Should be an interesting tablet landscape unfolding in 2012!