Blog

Apple seems to be the gadget retailing wizard of recent years. Evidence: the introduction and dramatic growth of the iPad which has defined the tablet PC market, the iPhone, which is the single most popular smartphone, and the iPod which is the best selling and most identifiable music player over the last ten years. The iPhone’s success, coupled with smartphones that use the most popular operating system, Google’s Android, have chopped the legs from under perennial smartphone maker Research In Motion, maker of the BlackBerry.
But more drama is on the horizon, as Amazon.com may be an unexpected, but extremely formidable competitor. Apple and Amazon.com have already squared off in the evolving eBooks business. Google is expected to be a serious player soon, making it a three-way fight.
Most experts believe turf battles will be fought over the online marketing, cloud computing, and gadget sales. Apple’s online marketing business is growing quickly, Google’s Android operating system is used on the largest number of smartphones sold today, and is an extremely tough competitor to Apple’s iPhone, and Amazon.com is considering rolling out a tablet PC.
With the introduction of iCloud by Apple, the stakes for Internet commerce has investors reevaluating Amazon’s lock on the market. Apple would like to create one-stop-shop for gadgets and media content such as books, music, and cloud based software for the digital and mobile buyer.
The question seems to be, why would Amazon.com want to enter the already crowded tablet market when established hardware providers have had trouble making gains against Apple? Amazon understands however that the tablet is simply a portal to online marketing, on demand books, music, and apps. Amazon already has the content for sale, which other tablet makers don’t. Plus, in the internet commerce business, getting customers to visit their site, similar to ‘foot traffic’ in brick and mortar stores, is important in order to sell all the other Amazon.com products.
The Battle is already hot in music, eBooks, and other digital media. Google and Amazon.com have a bit of a head start on Apple in terms of cloud commerce, but Apple has the edge in gadget hardware and apps. The three currently rely heavily on each other which complicates matters a bit though. Google’s search engine delivers a lot of business to Apple. Apple sells a substantial amount of products at Amazon.com, and Google benefits from Amazon.com’s paid search advertising program.
So as Apple ventures into the Internet retailing world, and Google continues to own the smartphone market, due in large part to lesser expensive devices, Apple may have difficulty winning battles it is used to winning.
Also, Amazon.com has very high customer-service ratings. It has been selling in the Internet retailing business for over ten years, and has proven to be a stubborn competitor even surviving the dot com bust at the turn of the century. Apple is a rookie to the Internet marketing business and, as such, has lower customer-service ratings, according to research by Wells Fargo done in February.
If Amazon succeeds with the tablet, it could be a definite game changer, however betting against Apple lately has not been in a smart buyer’s shopping cart.