I don't understand how the market gives AMZN so much latitude, and AAPL so little. Mind-blowingly irrational.
A multitude of revenue streams is why. I purchase something from Amazon on a weekly basis, but most certainly not their crappy phone which BTW I saw last week for $140 off contact, and unlocked.
[SIZE=24px]A multitude of revenue streams[/SIZE] is why. I purchase something from Amazon on a weekly basis, but most certainly not their crappy phone which BTW I saw last week for $140 off contact, and unlocked.
None of which makes more profit than the dying iPod.
AMZN runs on the greater fool theory. As long as you believe someone else is willing to pay more than what you bought the stock for its a good idea. Until it isn't. The next recession we face, will see AMZN lose 70% of its market cap.
The difference is that the iPod is dying. Sales are declining which leads to lower profit. Amazon on the other hand is doing tons of business, but they're doing it on razor thin margins. For many investors the potential to make profit is more attractive than the actual making of it.
Amazon is under no pressure to make money. Investors are thrilled to put their dollars in a company that proudly promises negative earnings, on the promise of moonbeams and rainbows in the future. Therefore, the Fire phone must REALLY be a black hole on Amazon's balance sheet, if Bezos is scrapping it.
When smug Mr. Bezos stood on stage introducing the Fire Phone like he had just invented the next revolution in mobile computing, I couldn't help but think "Amazon really doesn't get".... Fast forward and we see that we are not even going to see a "Fire Phone 2". I find Amazon so incredibly annoying for their business practice, but also because of their investors. Here is a company that has a market cap over $230B yet during their entire near-20-year existence they have produced a grand total of about $12B in profit (about what Apple does quarterly).
Just think... if all of Amazon stock holders offered to sell you their stock at the current price so you could own Amazon in whole and take it private then you could be investing $230B in a company that would yield you (on average) $600M per year.... it would only take you over 380 years to recover your investment -- then its all gravy....
In the same situation with Apple, you could buy the company for $632B, take cash out of the bank to the total of $200B in reserves making your investment only $432B, and earn $50B per year in profit. It would take you 9 short years to recover your investment and turn a profit.
380 years.... 9 years....
Hmmmm...... which stock is overpriced and which one is undervalued?
PS: Once the AAPL investment has been recovered after 9 years you would be earning 83 times as much money annually than you would have earned with the AMZN investment after 380 years.... but the AAPL investment ($632B - $200B cash) will cost you less than twice as much as the AMZN investment ($230B). Insane.
> A device in fact made to get you and keep you and make money in Amazon's Eco System.
Exactly. I felt that the amazon phone was an insult to my intelligence. It was obviously a trojan horse to promote shopping at amazon. Why would I pay for the privilege of entering owning hardware that feels like it was designed more to benefit amazon than to benefit me?
1. Put some of those Fire developers to work adding disability features to Amazon's epaper Kindles, including accessing Bluetooth keyboards and mice as well as restoring test-to-speech. If Amazon doesn't act soon, soon the press will be featuring stories about how cruel market dominating Amazon is to those with disabilities. Given Amazon dominance of ebook sales, it can't afford to slight those with problems reading.
2. Doing cellphone hardware may not be a good idea. That market is already dominated by Apple, with everyone else caught up in an intense competition. But Amazon could do quite well as a cellular reseller, particularly if it offered innovative features such as multi-device data sharing and international roaming at good prices.
The difference is that the iPod is dying. Sales are declining which leads to lower profit. Amazon on the other hand is doing tons of business, but they're doing it on razor thin margins. For many investors the potential to make profit is more attractive than the actual making of it.
There's that word again, 'potential'. The only way that potential gets realized is if Amazon sews up a retailing monopoly and jacks up prices. I am not sure that is achievable in retailing where the barriers to entry are relatively low and the feds will take immediate action anytime the consuming public squawks about monopolistic abuse.
When smug Mr. Bezos stood on stage introducing the Fire Phone like he had just invented the next revolution in mobile computing, I couldn't help but think "Amazon really doesn't get".... Fast forward and we see that we are not even going to see a "Fire Phone 2". I find Amazon so incredibly annoying for their business practice, but also because of their investors. Here is a company that has a market cap over $230B yet during their entire near-20-year existence they have produced a grand total of about $12B in profit (about what Apple does quarterly).
Just think... if all of Amazon stock holders offered to sell you their stock at the current price so you could own Amazon in whole and take it private then you could be investing $230B in a company that would yield you (on average) $600M per year.... it would only take you over 380 years to recover your investment -- then its all gravy....
In the same situation with Apple, you could buy the company for $632B, take cash out of the bank to the total of $200B in reserves making your investment only $432B, and earn $50B per year in profit. It would take you 9 short years to recover your investment and turn a profit.
380 years.... 9 years....
Hmmmm...... which stock is overpriced and which one is undervalued?
PS: Once the AAPL investment has been recovered after 9 years you would be earning 83 times as much money annually than you would have earned with the AMZN investment after 380 years.... but the AAPL investment ($632B - $200B cash) will cost you less than twice as much as the AMZN investment ($230B). Insane.
Accounting for inflation, you'd never get your money out of Amazon even in a 1000 years (or the next apocalypse). In fact, there is nothing they're in, or will be in the next 5 years, that makes their PE make sense.It is pure insanity.
The thing these companies need to 'kill' is Apple's ecosystem.
Apple's most important product is NOT the iPhone. Its the ecosystem. iPhones, iPads, Mac, Watch, AppleTV are just different devices used to access Apple's crown jewel - its ecosystem.
Ecosystem maturity is one factor. Fire Phone wasn't iOS enough for iOS users and also not Android enough for Android users. It was a fork of Android with novelty fake 3D, a free year of Amazon Prime, a high price, and nonexistent ecosystem. I questioned before who Jeff Bezos though would find value in that when so many better choices existed in every market segment. Was Bezos going after some new market segment that was somehow unnoticed by every other manufacturer and therefore underserved? Or did he like the taste of his own poop enough to serve it to everyone for a premium and think it would entice premium phone customers?
There is also branding. The Amazon brand has never produced a high-end consumer product. It takes years, maybe a decade of consistently producing recognized high-end products to build a reputation you can ride on. I think Bezos thought he would start that with the Fire Phone.
Incidentally I got an email a while back inviting me to tell Amazon what I thought of their Fire Phone. I so didn't care, that I didn't even bother replying.
Amazon's phone was poorly conceived from the start. Aside from being hardwired as a point of sale system for Amazon, the UI was a disaster. It's a mobile device, subject to random sudden movements, but the user experience was based on how you held it or where your eyes moved or other rather nonsensical body/device connections. Even fairly good attempts like Kinect on the Xbox are still met with derision. I shop at Amazon, I'm a Prime member, and that aspect of their business is convenient. However, they've gone a bit off the rails lately. Complaints abound with their Dash buttons, their workplace sounds like an utter slaughterhosue, and has anyone heard about this Amazon Underground thing? It's android only, but not only does it severely undermine the security of your device (I know...Android security already sucks but this makes it worse) but it sounds like a total screw job for app developers. Bezos...check yo self before you wreck yo self
What do people expect? The market is saturated!! People prefer the product that earned (and is burning) its reputation as a fantastic handheld computing appliance for real people (not geeks). Then there's the other product. Every company trying to get into the same level of success with the same type of product is just further clogging up an already saturated market. Then people act shocked. If the new product isn't actually revolutionary, don't expect to do more than reach the few remaining people that haven't already jumped on (or who have chosen to shift platforms).
A more obvious statement is that the Amazon phone, like several other Amazon services, are US-only. People in the US only care if the phone does what they need it to. So people buy an iPhone if they need what the iPhone does, they buy Samsung if they want to save a few pennies and don't care about the Apple Ecosystem, and everyone just uses whatever the phone carrier subsidizes, believing the phones to be free. Like the Mobile carriers make more money from selling these POS (as in Piece of ****) phones and convincing people to upgrade every year. This may be changing with the move out of 2-year contracts and to financing of phones. The true prices of the phones will be represented at retail instead of the carriers willingness to subsidize the device.
Outside the US, the Amazon Fire was never available, and most of the reason for the phone doesn't either. This is the story everywhere around the world. Chinese manufactures get it the least. Producing cheap phones is not the same thing as "useable" phones. For many people they only need a phone, maybe the ability to text message. Everything else is just useless fluff.
It's the same with cars. People over the age of 30 just don't really care about the extra in-vehicle entertainment features. Those features are not available, or barely usable outside the US (eg XM/Sirius, Onstar, and GPS)
And SmartTV's. So far have been nothing but a complete failure.
If you want people to buy-in to your ecosystem, you need it to work identically outside the US. Retroactively breaking that (eg Valve's Steam platform) just pushes people back into the piracy camp because their devices can no longer play the content.
Comments
Bezos used to work on Wall Street. He knows how to game the system and he knows how these traders think.
A multitude of revenue streams is why. I purchase something from Amazon on a weekly basis, but most certainly not their crappy phone which BTW I saw last week for $140 off contact, and unlocked.
The difference is that the iPod is dying. Sales are declining which leads to lower profit. Amazon on the other hand is doing tons of business, but they're doing it on razor thin margins. For many investors the potential to make profit is more attractive than the actual making of it.
Bezos used to work on Wall Street. He knows how to game the system and he knows how these traders think.
Interesting. I didn't know that.
But what's an example of how he "games the system"?
Amazon is under no pressure to make money. Investors are thrilled to put their dollars in a company that proudly promises negative earnings, on the promise of moonbeams and rainbows in the future. Therefore, the Fire phone must REALLY be a black hole on Amazon's balance sheet, if Bezos is scrapping it.
Just think... if all of Amazon stock holders offered to sell you their stock at the current price so you could own Amazon in whole and take it private then you could be investing $230B in a company that would yield you (on average) $600M per year.... it would only take you over 380 years to recover your investment -- then its all gravy....
In the same situation with Apple, you could buy the company for $632B, take cash out of the bank to the total of $200B in reserves making your investment only $432B, and earn $50B per year in profit. It would take you 9 short years to recover your investment and turn a profit.
380 years.... 9 years....
Hmmmm...... which stock is overpriced and which one is undervalued?
PS: Once the AAPL investment has been recovered after 9 years you would be earning 83 times as much money annually than you would have earned with the AMZN investment after 380 years.... but the AAPL investment ($632B - $200B cash) will cost you less than twice as much as the AMZN investment ($230B). Insane.
It's totally Android under the hood. They just forked it, and made their own app store.
I have to say though, it is more stable than android on samsung, and for what it does it is fine, but it is not an iPad and IOS
Exactly. I felt that the amazon phone was an insult to my intelligence. It was obviously a trojan horse to promote shopping at amazon. Why would I pay for the privilege of entering owning hardware that feels like it was designed more to benefit amazon than to benefit me?
Wow, that is some alliteration.
-Randy
Selling cheap piece of shit phones like this:
Those phones are as shitty as he was
1. Put some of those Fire developers to work adding disability features to Amazon's epaper Kindles, including accessing Bluetooth keyboards and mice as well as restoring test-to-speech. If Amazon doesn't act soon, soon the press will be featuring stories about how cruel market dominating Amazon is to those with disabilities. Given Amazon dominance of ebook sales, it can't afford to slight those with problems reading.
2. Doing cellphone hardware may not be a good idea. That market is already dominated by Apple, with everyone else caught up in an intense competition. But Amazon could do quite well as a cellular reseller, particularly if it offered innovative features such as multi-device data sharing and international roaming at good prices.
They should have made it free for Amazon Prime members with a discount on the monthly contract.
Amazon held that Wile E. Coyote moment for quite a while with the Fire Phone.
The difference is that the iPod is dying. Sales are declining which leads to lower profit. Amazon on the other hand is doing tons of business, but they're doing it on razor thin margins. For many investors the potential to make profit is more attractive than the actual making of it.
There's that word again, 'potential'. The only way that potential gets realized is if Amazon sews up a retailing monopoly and jacks up prices. I am not sure that is achievable in retailing where the barriers to entry are relatively low and the feds will take immediate action anytime the consuming public squawks about monopolistic abuse.
When smug Mr. Bezos stood on stage introducing the Fire Phone like he had just invented the next revolution in mobile computing, I couldn't help but think "Amazon really doesn't get".... Fast forward and we see that we are not even going to see a "Fire Phone 2". I find Amazon so incredibly annoying for their business practice, but also because of their investors. Here is a company that has a market cap over $230B yet during their entire near-20-year existence they have produced a grand total of about $12B in profit (about what Apple does quarterly).
Just think... if all of Amazon stock holders offered to sell you their stock at the current price so you could own Amazon in whole and take it private then you could be investing $230B in a company that would yield you (on average) $600M per year.... it would only take you over 380 years to recover your investment -- then its all gravy....
In the same situation with Apple, you could buy the company for $632B, take cash out of the bank to the total of $200B in reserves making your investment only $432B, and earn $50B per year in profit. It would take you 9 short years to recover your investment and turn a profit.
380 years.... 9 years....
Hmmmm...... which stock is overpriced and which one is undervalued?
PS: Once the AAPL investment has been recovered after 9 years you would be earning 83 times as much money annually than you would have earned with the AMZN investment after 380 years.... but the AAPL investment ($632B - $200B cash) will cost you less than twice as much as the AMZN investment ($230B). Insane.
Accounting for inflation, you'd never get your money out of Amazon even in a 1000 years (or the next apocalypse). In fact, there is nothing they're in, or will be in the next 5 years, that makes their PE make sense.It is pure insanity.
Ecosystem maturity is one factor. Fire Phone wasn't iOS enough for iOS users and also not Android enough for Android users. It was a fork of Android with novelty fake 3D, a free year of Amazon Prime, a high price, and nonexistent ecosystem. I questioned before who Jeff Bezos though would find value in that when so many better choices existed in every market segment. Was Bezos going after some new market segment that was somehow unnoticed by every other manufacturer and therefore underserved? Or did he like the taste of his own poop enough to serve it to everyone for a premium and think it would entice premium phone customers?
There is also branding. The Amazon brand has never produced a high-end consumer product. It takes years, maybe a decade of consistently producing recognized high-end products to build a reputation you can ride on. I think Bezos thought he would start that with the Fire Phone.
Incidentally I got an email a while back inviting me to tell Amazon what I thought of their Fire Phone. I so didn't care, that I didn't even bother replying.
Amazon's phone was poorly conceived from the start. Aside from being hardwired as a point of sale system for Amazon, the UI was a disaster. It's a mobile device, subject to random sudden movements, but the user experience was based on how you held it or where your eyes moved or other rather nonsensical body/device connections. Even fairly good attempts like Kinect on the Xbox are still met with derision. I shop at Amazon, I'm a Prime member, and that aspect of their business is convenient. However, they've gone a bit off the rails lately. Complaints abound with their Dash buttons, their workplace sounds like an utter slaughterhosue, and has anyone heard about this Amazon Underground thing? It's android only, but not only does it severely undermine the security of your device (I know...Android security already sucks but this makes it worse) but it sounds like a total screw job for app developers. Bezos...check yo self before you wreck yo self
Nope... nobody does. Roadkill.
A more obvious statement is that the Amazon phone, like several other Amazon services, are US-only. People in the US only care if the phone does what they need it to. So people buy an iPhone if they need what the iPhone does, they buy Samsung if they want to save a few pennies and don't care about the Apple Ecosystem, and everyone just uses whatever the phone carrier subsidizes, believing the phones to be free. Like the Mobile carriers make more money from selling these POS (as in Piece of ****) phones and convincing people to upgrade every year. This may be changing with the move out of 2-year contracts and to financing of phones. The true prices of the phones will be represented at retail instead of the carriers willingness to subsidize the device.
Outside the US, the Amazon Fire was never available, and most of the reason for the phone doesn't either. This is the story everywhere around the world. Chinese manufactures get it the least. Producing cheap phones is not the same thing as "useable" phones. For many people they only need a phone, maybe the ability to text message. Everything else is just useless fluff.
It's the same with cars. People over the age of 30 just don't really care about the extra in-vehicle entertainment features. Those features are not available, or barely usable outside the US (eg XM/Sirius, Onstar, and GPS)
And SmartTV's. So far have been nothing but a complete failure.
If you want people to buy-in to your ecosystem, you need it to work identically outside the US. Retroactively breaking that (eg Valve's Steam platform) just pushes people back into the piracy camp because their devices can no longer play the content.