In the past five years, Apple’s share price “We are andĪlways have been very comfortable at operating at extremely low margins,”īezos told Bloomberg Businessweek magazine. Margins, according to its financial statements are in the region of 30%.Īmazon’s margins are 3%, or a tenth of those of Apple. Apple makes fat, mouthwatering profit margins in each device it sells, whether its an iPad, an iPhone, a MacBook Air, or its MacBook laptops. Apple’s whole approach has been to build outstanding products that look beautiful and desirable, and price them far higher than technically similar competitors, in the safe belief that customers will still pay for them. Will it kill the iPad? Highly unlikely but the Fire’s launch does provide an insight into two very different strategies of two very different companies. The Fire has been touted as the first really serious challenger to the iPad’s dominance of the tablet market, even as a kind of ‘iPad killer’. This is not a sentence that Steve Jobs would have ever dreamed of uttering, and its unlikely that his successor, Tim Cook would utter it either. “This is the way Amazon has operated throughout its entire history,” Bezos declared. Throughout his 50-minute presentation in New York on Wednesday, where he launched four new devices, including the much-awaited Amazon tablet - the Kindle Fire, Amazon’s chief executive Jeff Bezos repeated one mantra - these are premium products at non-premium prices.
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