And this isn't monopolistic behavior how? Trying to drive business away from your competitors by selling at a loss. By locking your customers into one platform for all their purchases. That's no predatory?
All the gaming platforms operate in that fashion. Amazon didn't invent anything new, difference is you don't have to buy a Kindle to get eBooks. They're available across multiple platforms.
I agree that Amazon's monopoly should be addressed by DOJ but they really aren't keeping iPads from reading their e-books since Apple allows the Kindle e-book reader on an iPad. Their pricing scheme for all books could qualify as a monopoly but I don't believe their e-book reader does. Anyone could build a cheap Kindle-format e-book reader to undercut Amazon's Kindle. If Apple wanted to sell the iPad at a loss (whatever that means since analysts never take into account R&D or software development costs), they could and would probably have multiple "<span style="color:rgb(24,24,24);font-family:arial, helvetica, sans-serif;line-height:18px;">millions of customers opening a new Kindle iPad this holiday season." Of course, those pesky analysts would complain about Apple's profit margin and AAPL would tank because iPads are Apple's business not e-books, which is why selling iPads at a loss would hurt Apple while selling Kindle's at a loss won't hurt Amazon that much.</span>
Their ebook business is definitely underhanded but I wouldn't say monopolistic. They don't create the content and the publishers agreed to the wholesale model and are free to sell anywhere else plus it's only a small percentage of ebooks being sold at a loss.
I agree that Amazon's monopoly should be addressed by DOJ
Amazon DOESN'T have a monopoly!
Also, it is NOT illegal to give away (subsidize) hardware in exchange for a service. If it were, a lot fewer people would be using iPhones. Gevalia coffee built a business on this, giving away free coffee makers in exchange for buying their coffee for a minimum duration.
When Amazon reaches the size of Windows OS in terms of media sales share, and continues to give away the Kindle, whether or not it stops supporting iOS along they way, then the DOJ will step in. Though what got the DOJs attention with Microsoft was forcing customers to use Internet Explorer. Forcing customers to use only a Kindle would likely be the thing that triggers the DOJ's interest. But Just underselling the competition is not enough until they dominate the industry. At which time, they only need claim superior services to Google, MS, Apple Store and raise the price of the Kindle, secure for the near future at least that they will have a captive audience, in much the same way Apple did with the iPod, though using innovation instead of leveraging cheap products.
$129 is an incredible price for a tablet. I'm sure they did sell a ton of them. I have no doubt they are losing money on every one, and hope to make up for it via sales of Kindle eBooks. Bezos said pretty much exactly that. Something to the effect that he doesn't think people should have to pay up front, they should pay for content. If I weren't well invested in the iOS ecosystem (as a happy user, an AAPL shareholder, and an iOS developer), I would have bought one for each of my kids yesterday, sight unseen.
This is just the market reality that Apple and other tablet makers have to deal with. Apple at least has its (well deserved) reputation and alternative OS as selling points. I don't know what Samsung, Google, and Microsoft are supposed to do about it. Sucks to be them.
Until Bezos releases real numbers than nothing really matters. Doubling or tripling sales that are already meager is a non-event. Apple and Android tout their numbers proudly. Perhaps Amazon's numbers are nothing to brag about so they keep the silence and opacity.
I like it when Jeff Bezos is asked how many Kindles Amazon has sold. He always says, "We sold a hell of a lot of Kindles. Way more than last year." The analysts all pat him on his back and raise Amazon's target prices another $10. If he's asked an actual figure, he always tells them that he can't divulge that information because it is top secret. It's actually to Amazon's advantage that they never tell how many Kindles are being sold. That way Wall Street can't possibly have any expectations on an indeterminate number. That's what Apple needs to do with its own sales numbers and guidance. That's the reason why Jeff Bezos is Businessperson of the Year and why Tim Cook is the Doofus of the Year. Amazon is losing money and the share price is going up. Apple is making plenty of money and the share price is going down. Go figure.
hmmm... Apple stock at 356 on 8/19/11 (around the time Cook took over), apple stock at 584 today. (Apple stock at the beginning of 2012: 405 ish) Yup, that's a Doofus, alright. It's only a +228% increase. Apple does need to release numbers because the analysts would just make up stuff (like they always do).
The stock had a dip because Apple's record breaking quarters weren't record-breaking enough.
If I were in that meeting, I'd hammer Bezos for kindle numbers. Otherwise, I'd rate them down simply because there are literally no metrics being give out to tell the informed investor how they're doing. Total BS as far as I'm concerned.
"It's not because Apple did it and they didn't and Apple is bad and price fixes books and Amazon is good."
Reads like a five-year-old, dunnit? But hey, that's the argument.
The two issues are different. Sorry you can't see that. The actions by Apple differ from those of Amazon. Apple's Agency model allows for price collusion and that is what drew the attention of the Feds.
Here, Amazo is attempting to control the market by selling "key" technology (that locks users into their selling platform) at a loss, to the detriment of competitors.
I expect a lot of non-kindle users will get that model, users of old Kindles are much more likely to move up to the $200 model with no adds and 3G wireless, you pay $60 for 3 or 4 years of 3G coverage (depending on how long you use the Kindle actively), compared to $15/month for the iPad.
Not so sure about that. I had a Kindle Touch, and now a Paperwhite, and haven't ever wished I had 3G. It's not like it's usable for anything other than buying books, so the fact that it's "free" is pretty moot.
hmmm... Apple stock at 356 on 8/19/11 (around the time Cook took over), apple stock at 584 today. (Apple stock at the beginning of 2012: 405 ish) Yup, that's a Doofus, alright. It's only a +228% increase. Apple does need to release numbers because the analysts would just make up stuff (like they always do).
The stock had a dip because Apple's record breaking quarters weren't record-breaking enough.
no, the stock had a dip because it was valued based on expectations that apple would have even higher profits than they did. People act like this is a bad thing, it just means more people jumped on the apple stock bandwagon thinking it had unlimited growth, when in fact its growth was limited. I think part of the stock price is the lack of anything from apple that could be construed as "the next big thing". It is difficult for apple to grow bigger in the markets they are in. They won't get 100% of the phone market because their prices are too high (the free iphone 4 isn't really that cheap, ask anyone in a country where phones aren't subsidized). They had a near monopoly of the tablet market, but no one expects that to last. Between android tablets finally coming to their own, and windows 8 tablets hitting the street, there's nowhere for apple's market share to go but down. There are expectations of growth in the market segment, but that will only last so long. Eventually they will run out of consumers, and with the rapid growth of the tablet market, that might not take too long.
Analysts are valuing apple's stock just like every other stock, and a big part of that is future growth (and projected future growth). If apple maintains their position with huge profits, their stock will not grow significantly in value. Their profits need to grow to keep the stock price growing. Analysts were forecasting nearly limitless growth for apple a few years ago, but the limits are within sight now, and the stock had become overvalued. It's a pretty simple thing if you ask me.
It's only monopolistic if they have a Monopoly, and they don't. Otherwise it's "healthy" competition as far as the government is concerned.
I know it's widely believed that Amazon makes very little or no money on the Kindle, but is this true worldwide? Aren't there anti-dumping laws and other tariffs to prevent a foreign manufacturer from doing this and undercutting the competition? I know in the US it is totally legal, but outside the US? What does the Kindle sell for outside the US?
It's illegal (if you are large enough to impact a market, and Amazon is) to act in a monopolistic manner if your actions can be seen as an attempt to monopolize a market. There are anti-dumping laws in the US. What Amazon is doing could be construed as such. That's what got Microsoft in trouble. Unfortunately, as with Microsoft, the government probably won't see what has happened as monopolistic until after the fact.
The two issues are different. Sorry you can't see that. The actions by Apple differ from those of Amazon. Apple's Agency model allows for price collusion and that is what drew the attention of the Feds.
Here, Amazon is attempting to control the market by selling "key" technology (that locks users into their selling platform) at a loss, to the detriment of competitors.
Then before anything Nintendo, Sony and Microsoft need to be taken to court because that's the same business MO they use for their gaming consoles, or it only matters when it affects Apple?
Then before anything Nintendo, Sony and Microsoft need to be taken to court because that's the same business MO they use for their gaming consoles, or it only matters when it affects Apple?
Yet another iHater who doesn't understand that the rules are different when you have a monopoly or dominant market share.
Microsoft does not have a monopoly or dominant market share in the game console business so they are free to do what they want.
Then before anything Nintendo, Sony and Microsoft need to be taken to court because that's the same business MO they use for their gaming consoles, or it only matters when it affects Apple?
Actually, a lot of companies try selling their main product at a loss while attempting to make a profit on accessories. Look at ink jet printers. I'm sure these make next to nothing while they overprice their proprietary ink to lock in the buyers. This is all Amazon is doing. They sell electronic and printed books as their primary business so these e-readers are their way of locking in users to over-priced ebooks.
If I remember right, Kindle's only read Amazon's proprietary e-book format (yes/no?). I'm not calling this monopolistic because there are other options to this format. Just like Apple, iPods, and iTunes is not monopolistic because there are other options for people.
The difference is that Ammazon is large enough to impact a market and it sells products across a wide variety of lines. The DOJ won't pay attention to companies that aren't large simply because their inability to drive the market keeps their monopolistic behavior from having a monopolistic impact.
One reason why Apple does not get into trouble with its iDevices and iTunes is that Apple does not sell its products at a low price, thus making entry into the market by competitors difficult. In fact, entry is easy. The problem Apple's competitors have is that Apple makes superior products that people want despite the high price. None-the-less, they have competitors. Unlike Amazon, Apple's pricing is not designed to inhibit competition. If Apple had sold its iDevices at a loss to induce users to use iTunes, don't you think DOJ would be all over them?
TO THOSE MENTIONING GAMING PLATFORMS: As for gaming platforms, their pricing is not designed to inhibit competition or entry into the market by competitors. The fact that there is healthy competition in the gaming market is why they don't have problems with the DOJ. If any one of the platform vendors sold their products at a super low price in order to drive competition out of business, they would. Looking at DOJ involvement.
Where is the evidence Amazon is making money on the content side? I know they spin it that way but where's the proof it's actually working? If it was why would they need to include advertising with the Kindles that you have to pay to opt out of? Amazon and Android OEM's know the only way they can compete with the iPad is to sell their tablets dirt cheap and hope people are drawn to the cheap price. As long as Amazon is not releasing numbers that means their sales are probably not great (or the returns are high). Microsoft wouldn't say how many Surface tablets they've sold so far, but had no problem releasing sales figures for Xbox. If Amazon had sales figures that could even come close to iPad they'd be shouting about it from the rooftops. I keep waiting for the investor community to start applying the same standards to Amazon as they do to Apple and other companies. Last quarter Apple reported profits of almost $9B and their stock dropped like 4% the next day. Amazon reported a loss and the next day their stock was up almost 6%. Their PE is close to 3000 now. Apple's is less than 13. Explain that. :no:
Amazon reported a loss and the next day their stock was up almost 6%. Their PE is close to 3000 now. Apple's is less than 13. Explain that.
WHAT?! Three THOUSAND? How is their stock not plummeting faster than Jay Leno's ratings?* No, seriously! What happens when they DO collapse? What happens to everything they do? Their website, their warehouses, and all the other, unrelated websites that are hosted on their off-season servers? Because doesn't it seem like they're really going to collapse, and violently?
Comments
All the gaming platforms operate in that fashion. Amazon didn't invent anything new, difference is you don't have to buy a Kindle to get eBooks. They're available across multiple platforms.
Their ebook business is definitely underhanded but I wouldn't say monopolistic. They don't create the content and the publishers agreed to the wholesale model and are free to sell anywhere else plus it's only a small percentage of ebooks being sold at a loss.
Also, it is NOT illegal to give away (subsidize) hardware in exchange for a service. If it were, a lot fewer people would be using iPhones. Gevalia coffee built a business on this, giving away free coffee makers in exchange for buying their coffee for a minimum duration.
When Amazon reaches the size of Windows OS in terms of media sales share, and continues to give away the Kindle, whether or not it stops supporting iOS along they way, then the DOJ will step in. Though what got the DOJs attention with Microsoft was forcing customers to use Internet Explorer. Forcing customers to use only a Kindle would likely be the thing that triggers the DOJ's interest. But Just underselling the competition is not enough until they dominate the industry. At which time, they only need claim superior services to Google, MS, Apple Store and raise the price of the Kindle, secure for the near future at least that they will have a captive audience, in much the same way Apple did with the iPod, though using innovation instead of leveraging cheap products.
$129 is an incredible price for a tablet. I'm sure they did sell a ton of them. I have no doubt they are losing money on every one, and hope to make up for it via sales of Kindle eBooks. Bezos said pretty much exactly that. Something to the effect that he doesn't think people should have to pay up front, they should pay for content. If I weren't well invested in the iOS ecosystem (as a happy user, an AAPL shareholder, and an iOS developer), I would have bought one for each of my kids yesterday, sight unseen.
This is just the market reality that Apple and other tablet makers have to deal with. Apple at least has its (well deserved) reputation and alternative OS as selling points. I don't know what Samsung, Google, and Microsoft are supposed to do about it. Sucks to be them.
Quote:
Originally Posted by Constable Odo
I like it when Jeff Bezos is asked how many Kindles Amazon has sold. He always says, "We sold a hell of a lot of Kindles. Way more than last year." The analysts all pat him on his back and raise Amazon's target prices another $10. If he's asked an actual figure, he always tells them that he can't divulge that information because it is top secret. It's actually to Amazon's advantage that they never tell how many Kindles are being sold. That way Wall Street can't possibly have any expectations on an indeterminate number. That's what Apple needs to do with its own sales numbers and guidance. That's the reason why Jeff Bezos is Businessperson of the Year and why Tim Cook is the Doofus of the Year. Amazon is losing money and the share price is going up. Apple is making plenty of money and the share price is going down. Go figure.
hmmm... Apple stock at 356 on 8/19/11 (around the time Cook took over), apple stock at 584 today. (Apple stock at the beginning of 2012: 405 ish) Yup, that's a Doofus, alright. It's only a +228% increase. Apple does need to release numbers because the analysts would just make up stuff (like they always do).
The stock had a dip because Apple's record breaking quarters weren't record-breaking enough.
Originally Posted by jungmark
The stock had a dip because Apple's record breaking quarters weren't record-breaking enough.
This is sad. True, but sad. Also hilarious.
If I were in that meeting, I'd hammer Bezos for kindle numbers. Otherwise, I'd rate them down simply because there are literally no metrics being give out to tell the informed investor how they're doing. Total BS as far as I'm concerned.
Here, Amazo is attempting to control the market by selling "key" technology (that locks users into their selling platform) at a loss, to the detriment of competitors.
Quote:
Originally Posted by wally626
I expect a lot of non-kindle users will get that model, users of old Kindles are much more likely to move up to the $200 model with no adds and 3G wireless, you pay $60 for 3 or 4 years of 3G coverage (depending on how long you use the Kindle actively), compared to $15/month for the iPad.
Not so sure about that. I had a Kindle Touch, and now a Paperwhite, and haven't ever wished I had 3G. It's not like it's usable for anything other than buying books, so the fact that it's "free" is pretty moot.
Quote:
Originally Posted by jungmark
hmmm... Apple stock at 356 on 8/19/11 (around the time Cook took over), apple stock at 584 today. (Apple stock at the beginning of 2012: 405 ish) Yup, that's a Doofus, alright. It's only a +228% increase. Apple does need to release numbers because the analysts would just make up stuff (like they always do).
The stock had a dip because Apple's record breaking quarters weren't record-breaking enough.
no, the stock had a dip because it was valued based on expectations that apple would have even higher profits than they did. People act like this is a bad thing, it just means more people jumped on the apple stock bandwagon thinking it had unlimited growth, when in fact its growth was limited. I think part of the stock price is the lack of anything from apple that could be construed as "the next big thing". It is difficult for apple to grow bigger in the markets they are in. They won't get 100% of the phone market because their prices are too high (the free iphone 4 isn't really that cheap, ask anyone in a country where phones aren't subsidized). They had a near monopoly of the tablet market, but no one expects that to last. Between android tablets finally coming to their own, and windows 8 tablets hitting the street, there's nowhere for apple's market share to go but down. There are expectations of growth in the market segment, but that will only last so long. Eventually they will run out of consumers, and with the rapid growth of the tablet market, that might not take too long.
Analysts are valuing apple's stock just like every other stock, and a big part of that is future growth (and projected future growth). If apple maintains their position with huge profits, their stock will not grow significantly in value. Their profits need to grow to keep the stock price growing. Analysts were forecasting nearly limitless growth for apple a few years ago, but the limits are within sight now, and the stock had become overvalued. It's a pretty simple thing if you ask me.
Phil
It's illegal (if you are large enough to impact a market, and Amazon is) to act in a monopolistic manner if your actions can be seen as an attempt to monopolize a market. There are anti-dumping laws in the US. What Amazon is doing could be construed as such. That's what got Microsoft in trouble. Unfortunately, as with Microsoft, the government probably won't see what has happened as monopolistic until after the fact.
Looks like most of those Kindles may have been purchased on iOS devices...
http://www.computerworld.com/s/article/9234039/iPad_grabs_top_spot_as_preferred_Black_Friday_shopping_tool
Then before anything Nintendo, Sony and Microsoft need to be taken to court because that's the same business MO they use for their gaming consoles, or it only matters when it affects Apple?
Yet another iHater who doesn't understand that the rules are different when you have a monopoly or dominant market share.
Microsoft does not have a monopoly or dominant market share in the game console business so they are free to do what they want.
Not exactly.
The difference is that Ammazon is large enough to impact a market and it sells products across a wide variety of lines. The DOJ won't pay attention to companies that aren't large simply because their inability to drive the market keeps their monopolistic behavior from having a monopolistic impact.
One reason why Apple does not get into trouble with its iDevices and iTunes is that Apple does not sell its products at a low price, thus making entry into the market by competitors difficult. In fact, entry is easy. The problem Apple's competitors have is that Apple makes superior products that people want despite the high price. None-the-less, they have competitors. Unlike Amazon, Apple's pricing is not designed to inhibit competition. If Apple had sold its iDevices at a loss to induce users to use iTunes, don't you think DOJ would be all over them?
TO THOSE MENTIONING GAMING PLATFORMS: As for gaming platforms, their pricing is not designed to inhibit competition or entry into the market by competitors. The fact that there is healthy competition in the gaming market is why they don't have problems with the DOJ. If any one of the platform vendors sold their products at a super low price in order to drive competition out of business, they would. Looking at DOJ involvement.
Originally Posted by Rogifan
Amazon reported a loss and the next day their stock was up almost 6%. Their PE is close to 3000 now. Apple's is less than 13. Explain that.
WHAT?! Three THOUSAND? How is their stock not plummeting faster than Jay Leno's ratings?* No, seriously! What happens when they DO collapse? What happens to everything they do? Their website, their warehouses, and all the other, unrelated websites that are hosted on their off-season servers? Because doesn't it seem like they're really going to collapse, and violently?
*Hi-yo, old, terrible joke!