Google and Facebook are not really in the same businesses as Amazon and Apple.
That Amazon isn't worth more is puzzling. I know I've stopped buying from them unless I absolutely have to because I can't trust that the product I get is non-counterfeit and previously unused -- seriously, who sells used shavers as new, totally f'in gross -- but has everyone else stopped buying too?
Yes, for a lot of classes of products I simply do not buy from Amazon any more. The counterfeiting and inventory co-mingling (such that you can't even filter for trustworthy sellers) has destroyed a lot of Amazon's usefulness.
IMO Amazon's foray into 3P market-making will ultimately be seen as an attempt to grow the product that ends up killing the product.
Even besides the counterfeiting, there's just so much crappy junk. Want lightbulbs? Wade through page after page of crappy no-name brands who all have fake/gamed reviews, so you can't tell the good from the bad. Want a name-brand lightbulb? Well, then we're back to the counterfeiting problem.
Even when I do buy from Amazon there's at least a 50% chance what I buy will be some cheap bullshit with faked reviews that will fall apart in under a month of use. Amazon is worse than the Walmart discount bin.
Amazon has weirdly given me a newfound appreciation for traditional retailers. There is value in the curation - in filtering bad products so that as a customer I can shop with confidence, and that even if I don't do too much research the product I buy will be good enough - or at least authentic and safe.
The complete laissez-faire free-for-all model just results in me Googling for product reviews for the most mundane things I buy. It is a massive time-sink.
The wild thing with amazon is that it just overwhelmingly appears that they do not care about all of the fake products and fake reviews. I looked for a screen protector and half way into reading reviews see that the seller had taken over a listening for... kettle bells. Or when a fake product I had unintentionally bought set their address to be that of an Amazon warehouse. Surely detecting such blatant lying and fakery shouldn't be difficult.
And if you do feel like getting cheap crap from the roulette wheel, Chinese sites like aliexpress have a much wider selection of interesting looking stuff.
Only thing Amazon has going for it is faster shipping.
inventory “co-mingling” is a myth invented by fantasist. If that’s true, then any merchant could send in fake items to Amazon Warehouse then request them returned so there will be legitimate items exchanged in.
A search for 'amazon inventory commingling' brings up a bunch of articles about it; apparently it's something that you can turn on or off in your seller account. One of the articles specifically noted that if you choose to do this, and you request your items returned, you will just get that number of items from the shared inventory, which will probably include items of the same type from other sellers.
You are wrong. Though I'm not sure how common it is. You can get a free Amazon seller account and see for yourself. Many common items that you might want to sell have the option to commingle inventory. The benefit to the seller is that you can print out multiple copies of a single barcode and stick it on all of your items and just send them in. Whereas non-commingled will need a unique barcode on each item.
>inventory “co-mingling” is a myth invented by fantasist. If that’s true, then any merchant could send in fake items to Amazon Warehouse then request them returned so there will be legitimate items exchanged in.
It is true, and it does happen.
This is why any wise Amazon seller will use Amazon labeling (an Amazon-generated barcode specific to that item and that seller).
I bought a Blu-Ray on Amazon recently, shipped from and sold by Amazon.com, and instead received a box of commemorative quarters. Of course they replaced it but I'm still baffled how this happened.
The simple answer is that Amazon is the least profitable company in the list (even less than Meta in its current state). There are factors that excuse this, hence Amazon is actually valued very high compared to how little money it makes.
Then shouldn't their stock be worth even more which is what this discussion is about? The simple answer is their fixed margins are far worse than these other competitors (aws aside).
Stopped buying from Amazon for any household products after getting a fake hummingbird feeder and fake castor oil (was opened and repackaged canola oil). Just can't trust them to send you the real name-brand product and not something knockoff or fake.
Good lord the amount of dropshipping 'brands' with seemingly randomly generated names like Wynboop and FveBzem and DmofwHi and ZGGCD all selling the exact same product with the exact same description and product photos is frustrating. The NYT even wrote about this[1] in 2020 but clearly Amazon doesn't care.
Castor oil is darker, thicker and higher viscosity. Canola is more of a pale yellow and thin. If it wasn't canola (which I assumed it was because it's the cheapest) it was some other cheap filler. Point being, I no longer trust amazon to send me anything that's going on or in my body. Then when we got a fake birdfeeder I realized there were a ton of fake products on there.
We weren't the only ones to get a fake birdfeeder, fwiw:
> WARREN, R.I. (WPRI) — Aspects has been in business for decades, manufacturing bird feeders that come with a lifetime guarantee. So in 2016, when a customer called about a defective hummingbird feeder, the Warren-based company took the complaint seriously. “We went through the process of cutting the plastic and looking at all the different molding telltales and we realized it was not our product,” Trisha Torres, the CEO of Aspects, told Call 12 for Action.
Torres said the product was a counterfeit. She knew if there was one, there had to be others.
> “We found that it was just rampant on Amazon,” Torres said. In 2017, U.S. Customs and Border Protection seized 3,828 counterfeit Aspects bird feeders in 68 cartons. Federal court records show Aspects won a permanent injunction against the LLC that made the shipment, but even now, Torres still finds fakes on Amazon. “My customer service department has fielded hundreds of these calls,” Torres said. “People’s knee-jerk reaction is they are just angry at us. They think we’re not standing behind our product.”
Non are in the exact same business but there are significant overlaps.
Amazon makes it's profit from AWS, which is in the same business (and beating) Google Cloud and Microsoft Azure.
Putting Amazon and Apple in the same business is a bit more of a stretch. Amazon sells things (and is nowadays mostly a middle man for third parties selling things through Amazon warehouses and delivery), Apple designs (and has them manufactured by third parties) things from CPUs all up the value chain to devices and it's software. The overlap is partially in services, but of which aren't particularly strong right now (Amazon Prime Movies/Series vs Apple TV+). There's not really a competition on devices anymore (Fire Phone/tablets vs iPhone/iPad).
Not only this, but, critically, there is now an entire *industry* devoted to preventing cloud-provider lock-in. You can't throw a penny into an SF crowd without hitting someone working on this.
Because capitalism is efficient, and because there are lots of dollars chasing the Lock-in Problem, and moreover because AWS is the market leader, it has an enormous amount to lose. Even if 0.5% of the aforementioned startups succeed in reducing dollars lost to lock-in by (say) 10%, on average, that's billions that AWS stands to lose. (By my armchair math)
I worked for a company that claimed to do this. The secret was instead they locked you into their company. You had your full choice AWS, GCP or Azure... Which only worked through their web portal and infrastructure, which was entirely hosted on AWS anyway.
I haven't really stopped buying from Amazon, but I'm definitely starting to put in more effort. Just bought a comforter last week from a localish store that I found going through reddit reviews rather than buying off Amazon. Just bought some new shoes but got them from the local store and got a lot more out of being able to get properly fitted and able to talk to the guy about my issues. Still buy bits of cheap junk from Amazon, definitely if I'm thinking more along the lines of "Buy It For Life" (or just some long term durability) I'll try to get it from someone else.
Also just ditched Android and Fitbit and got a new iPhone and Apple watch, pretty much decided to suck it up and join everyone else (and not a moment too soon because my Android case is starting to bulge out due to the battery again). And first impression is that they're really nice products and its worthwhile. Really wish Apple was a little more open of an ecosystem and that their products were more repairable--but for all the whinging and moaning about Apple that hits the headlines here on HN they seem to be miles better than anything else if you're just an average person.
Interesting you talked about shavers. Admittedly AWS is only 16% of AMZN's revenue, but it's 75% of profits and growing like gangbusters, especially when compared to the rest of the company.
If regulators force AWS to spilt from the rest of Amazon it will be like the breakup of Standard Oil: shareholders will make more from the separate entities than they did from them combined.
Amazon has become my vendor of last resort. I first started noticing a change in the quality of their goods and vendors 2-3 years ago. Now it's gotten bad enough to where I'm actively avoiding them - even going to brick and mortar stores to avoid having to do business with them. I still have Amazon vendors I trust, but I no longer trust Amazon to vet their vendors - and that's a HUGE degradation of service!
I’ve just realized I’ve stopped buying stuff at Amazon that I can find at other, more reliable, stores. Recently I bought a new laptop at BestBuy, even though it was a $100 cheaper at Amazon. Legos, headphones, stuff for the kitchen… all bought either locally or at other online retailers. I’m buying less and less stuff at Amazon, usually books (Kindle, mostly) and stuff I can’t find anywhere else.
Google and Facebook are not really in the same businesses as Amazon and Apple.
I think it's interesting, and still kinda sorta valid since when tech companies surpass the value of companies like Ford and Exxon, they make similar hoopla, even though those are in entirely different sectors.
I have stopped buying books from Amazon unless I really have to because of the counterfeit problem, and sellers canceling orders then upping the price.
So I try to buy books from thenile or eBay instead.
The Book Depository is another excellent Amazon book seller. Not the fastest shipping, but always real books, and great collection of specialty technical books. Highly recommended.
Why is the article not talking about MSFT?
Seems like it is holding up rather better than others non AAPL GAFAM values. What would be the explanation ?
MSFT has more diverse sources of revenue than the FAANG members dependent primarily on consumer directed ads and so won't be as badly affected by a downturn in consumer directed ad spending.
Nothing new to sell? As long as time keeps ticking Apple will keep announcing the new Apple N+1 and N+1 Pro. And people will keep buying them.
Every adult in the modern world has a smartphone and buys a new one every 2.5 years. Apple sells what is seen as the most premium device, with high margins.
I believe you may have misread the parent -- I believe the author is implying that it's MSFT that has nothing new to sell (IIPC[1])
Storytime! As it happens, I was working at MSFT when the first M1-based MacBooks rolled out.
I actually ran around trying to get people to look at the specs and talk about this serious emergent threat. Rank & file SWEs just shrugged, and the vibe was that I wasn't senior enough to be allowed to worry about it.
I don't know what management was thinking. But, looking back over the years since, I'd reckon that whatever they were thinking was too quiet.
(There is a sidebar I am omitting about Permission to Worry, which is the name of an upcoming newsletter article I intend to write about this phenomenon -- I've come to regard it as the singular most important privilege that an organization can assign an employee -- but it is well beyond scope for this thread.)
Microsoft doesn't really care about Apple in the same way that Apple doesn't really care about Microsoft. Both companies operate in their own lanes, serving their core userbases. Microsoft sells OSes, subscription services and as a footnote, hardware - how did M1 threaten that?
Apple has increased Mac sales by ~20% over the past 5 years, but it's still ~1/4th of the money they're making off selling iPhones. Even if the M3 impresses everyone again with a 40 hour battery life and increases sales by 30% (a generous stretch), Macs still wouldn't be Apple's moneymaker or priority. You want to get an idea of how small the Mac is to Apple? The App Store makes almost 3x more money annually than Mac sales. Their de-facto iPhone monopoly is more valuable than the entirety of the Mac platform.
I think "Permission to Worry" is a pretty pretentious title considering how Microsoft butters their bread, but take my opinion and numbers with a grain of salt.
What changed is that the M1 is causing them to lose the platform war. Performance-per-watt matters enough to users that Apple's incredible parsimony with the juice has effectively secured it both the desktop and the mobile markets.
Sure, yeah, MSFT sells an OS and a cloud -- both are actually pretty awesome these days. But they only got those things on the back of performant Intel silicon. Network effects did the rest, but those network effects were, as it were, tethered to the world by the quality (and modest cost) of the hardware it empowered.
I propose that, like a hurricane moving over land, a software-platform company that loses the first battle -- for the immediate hardware-mediated user experience -- is going to start unwinding.
We don't have to look far for examples. Facebook is currently in just such a death-spiral, in no small part because Apple --- now in a place to dictate terms --- decided its users would be better off with more privacy, and cut FB off from the flows of data it needed for targeted marketing and ML training.
The ability to simply shrug off a behemoth like FB (and leave said behemoth scrambling, vainly, to own the next hardware platform) should surely be enough to get any unbiased observer's attention.
Awareness of the Home-Hardware Advantage is, I imagine, also why my former employer foists Edge on everyone with dark patterns and nagware. They're afraid of Google creeping down the stack. (Like they did on mobile.)
Leaving Apple as gatekeeper for both the desktop and mobile is essentially to submit to Apple hegemony.
I no longer have a horse in this race, but from where I sit, it looks like Apple has outplayed everyone, and the market knows it. (Hence my original comment.)
What do you think Apple will do to Microsoft, once Microsoft products are primarily accessed over Apple devices?
What does anyone do to their competitor, once they can control where, and how, that competitor can talk to its customers?
It really feels like you're not looking at the chessboard at all.
> from where I sit, it looks like Apple has outplayed everyone
I also don't have a horse in this race (used the latest & greatest from both Apple and Microsoft/Intel/Nvidia), but I don't think you're seeing the entire picture either.
First off, Apple hasn't won. There are still markets they don't cater to (budget computing, HPC, gaming, machine learning research, CUDA programming, 3D design/rendering, native Docker development, the list goes on), and they show no interest in poaching those users. Second off, you're overestimating the impact of Apple's advances here. Performance-per-watt is a nice advantage, but it came at the cost of abandoning x86 and paying insane up-front costs for next-generation silicon that led to a disappointing M2 cycle. One thing is certain, though - Apple's performance entirely relies on their ability to out-bid competitors for competitive components, which gives them a default monopoly (as the richest company in the world).
> What do you think Apple will do to Microsoft, once Microsoft products are primarily accessed over Apple devices?
Apple will do the same thing they've always done, beg third-parties to stay on their platform with under-the-table deals that bolster support for the App Store. Microsoft makes Apple money, to remove Office365 support would be paramount to telling your business customers to pound sand. All of this is ignoring the antitrust regulation mounting against Apple for their completely unfair abuse of the App Store and software distribution. Even still, they will never have the leverage to kick Microsoft where it hurts because they'll never have competitive market share. Like I said in my previous comment, assuming the most absurd conditions (like Mac sales growing 30% YoY), it would be decades before Apple had enough control to pull that off.
I hope you're right, and Apple tries to act cute while the trade commissions are watching. We're long overdue for another nuclear platform abuses lawsuit like the one we stuck Microsoft with in the mid-2000s, all it would take is one silly move to push us there.
The market and I agree that you are misreading things, but we can agree to disagree.
By my lights, winners don't have to take all in order to have won -- approximately half the market is sufficient. Enough to dictate terms for most users most of the time. That's Apple in 2022, and the market is reflecting that fact. In fact, I daresay that if Apple hasn't won, it is, at the very least, mate-in-three, or thereabouts.
A more interesting question is, what psychological comfort is there in minimizing one's perception of their hegemony?
I'm thinking in terms of avoidance of discomfort. Ideologically, I've been a FOSSian my whole life -- I'm in my forties, and I was a teenager when I first installed Red Hat.
But I'm increasingly aware that, despite having won the battle with the NT kernel, we somehow lost the war. Specifically, we were co-opted by Apple, Amazon, and, yes, now Microsoft too.
It puts food on my table but it leaves me feeling a little empty. I don't know about you. <3 Maybe it's the same?
It's hard to admit you're a bird in a cage. It's even harder to admit that the next generation will be.
Apple is too smart to want #1. I'll concede to you that they dominate the market through their avoidance of monopoly, but they hardly have a monopoly on tech as a whole. Modern MacOS is truly terrible if you aren't a creative or "business" customer, and it's intuitiveness as a user-friendly OS has waned for a while now. All of their other products are glorified lifestyle devices. How does that constitute a monopoly on anything but vanity?
We can both disagree on our subjective interpretation of Apple's ecosystem, and our subjective opinions on where they're headed as a company. We both seem to agree that they're objectively molesting the market though, so we're frankly not disagreeing on much. Still, "permission to worry" is a silly albatross to wear on anyone's behalf. Sounds like an article GameInformer would write about the Xbox 360, not an article discussing the merits of modern computing.
The article is as-yet unwritten -- the premiss will be that in general, the privilege of being permitted to worry about any given thing is, in an organization, the most critical plank of status. The opposite of a window seat.
Pay, equity, everything else -- not as important.
It has little to do with my former employer specifically. It's anthropology.
Every adult in the modern world has a smartphone and buys a new one every 2.5 years.
The consumer market figured out a long time ago that spending a lot of money on some new tech product when the one you already have still works fine is a dumb idea. No-one buys a new PC every 3 years any more either.
I assume some people still get a new phone every couple of years because they're buying an overpriced deal from their network and it comes with a new phone each time they renew for another 24 months. Otherwise the networks wouldn't still push those plans as their default option.
I'm not sure anyone I know does that though. From random personal conversations most of my friends and family seem to either keep their existing phone and switch to a much cheaper SIM-only deal once they've paid off the original deal that had a bundled phone or they buy their own new phone separately and then take out a SIM-only plan immediately.
It blows my mind that so many people are paying $100-$200/month for postpaid family plans (including redundant phones that pile up) , when Prepaid MVNOs charge $15/mo/person.
There are absolutely 0 apple products that offer enough incremental value over previous versions in the world where ppl actually start watching their costs
There was an amazing article on here a couple years ago that discussed how during a depression in Japan the most popular magazines went bankrupt, but the niche magazines did very well, because they were a source of 'identity' for their customers. That 'identity' is a really important commodity and people will skimp on food for their fix.
I think there is an element of identity in many of the products apple sells, but more importantly they are the best way to access the apps where people really do source their identity.
I really love the optimism implied in this comment. Unless people get to USSR poor, I have the feeling they will keep buying the new iPhone N, if anything just to have the newest.
It will be interesting to see their mixed reality device/OS - they should be announcing it sometime next year. I'm hoping that at the very least it can serve as a proper monitor replacement.
Wouldn't this apply to many hardware companies? And though I agree that they wouldn't have much hardware to sell in that case, their services business is still doing ~76B on an annual basis which is no joke.
I feel like Apple, Amazon, and Google are the most robust and antifragile businesses. They offer goods and services that are quite inelastic and difficult to replace. Facebook, on the other hand, is something that can be replaced. I doubt its long-term viability as a business.
Amazon has benefited from high price/earning ratios for decades; even the growth-adjusted PEG version has been aggressive.
Interesting comparison made by Horace Dediu: “Netflix, Apple and Microsoft all have similar P/E ratios. (25-26). Meta and Google have collapsed (9 and 18.5 respectively.) Amazon is holding 100.”
What's extremely funny about this is that Amazon, Alphabet and Meta are all very much oriented around advertising and data collection (with a bit of product on the side, as a treat to users), and Apple is now ready join the same party after neutering the potential competition in the platforms it controls.
(in fairness, Amazon is really all about AWS, which almost seems like its there to prop up the e-commerce business)
Apple and Amazon are adding real values to the economy and making positive contribution to society. Google and Meta are parasites that invade our privacy and show us ads. These ad companies should disappear from the earth.
I’m getting more and more iffy on Amazon. I love the convenience but the fact that they’re hiding the real merchants and so much fraud goes on is pushing me away. Also raising Prime prices to add more services I don’t want but have to pay for.
I miss the old days when everything I bought from Amazon came from Amazon and was trustworthy and not a fake.
Their terrible worker treatment isn’t endearing in any way either.
#2 is a problem with companies Apple contracts with. And Apple holds those suppliers to high standards, partly because of past attention.
The dirty little secret is everyone uses Foxcon and other companies like them. MS does (did?) for Xboxes. Other computer makers. Electronics device makers. Everyone. Very few companies have their own factories they run top-to-bottom.
But the headlines are pointed at Apple. That gets clicks. Do those other companies try to keep worker standards up the way Apple does? No one covers that, do they.
But Amazon owns the warehouses. Amazon sets their labor standards. Maybe there are subcontractors for the workers or divers. But it’s 100% Amazon’s control. Amazon didn’t contract everything out to a logistics company. Amazon IS the logistics company.
If you live somewhere everyone else has Prime, you'll usually get free super saver items in two days or less as well. I don't pay for Prime but since the truck is on my street every day, my stuff gets dropped off quickly anyhow.
I get that benefit, but I feel it's in the way of having to find $25 worth of items before placing the order. A lot of times I'll change my mind on that $8 item before I get there.
or, yknow… searched something on the internet using Google search? that tiny little thing that literally revolutionized the human experience of recorded information?
Google search was by no means the first search engine, or the best. They succeeded by having good business acumen during one of the most turbulent phases of industry that tech has ever seen, along with a big drive to integrate the non-tech public into their products.
google has done great, I don't buy ' literally revolutionized the human experience of recorded information? ' -- it's simply not true; they just did well in that niche.
Had they gone insolvent another similar group would have dominated that same field, that should make it dead obvious that their business (search specifically) wasn't revolutionary -- just very successful.
Google is one of the most harmful entities on the entire planet. Anyone who doesn't realize that just... doesn't know enough about the topic yet. Nobody is as good at extracting profit from unethical and outright harmful behavior while simultaneously shifting the blame onto someone else for it.
Apple and Amazon both show ads and make a lot of money from it. You think Apple's 'privacy' changes are for actual privacy and not to undercut a competitor?
But, one thing it does do is open the world to people living in rural areas who wouldn't otherwise be able to access so many goods and services (of, admittedly, varying quality and provenance).
Exactly. I've lived in a rural area for ten years where the nearest hardware or clothing store was an hour away. I get most of my hard goods from Amazon. I can't recall a single issue with the hundreds of products I've ordered. The biggest issue is USPS shipping is no longer reliable and I can't count on items being delivered when Amazon estimates.
Word of mouth. Of course spreading the word of new products and services would take a lot of time so some businesses won't be able to spend a lot of money and bootstrap to millions of customers in a few months. Everything would be slower but it will function.
So a future where only large businesses serving large segments of a market are able to operate with any success while small players have little to no chance in establishing themselves into small niches. And that's of course before getting into how you broke the primary method of monetization of the entire web.
That's how it would work if we remove advertising. But is there any chance of removing advertising from the world? I don't think so. What's happening instead is that a big player like Apple is using their existing base (iDevices) to build its own advertising platform and weaken rivals in the advertising business.
That Amazon isn't worth more is puzzling. I know I've stopped buying from them unless I absolutely have to because I can't trust that the product I get is non-counterfeit and previously unused -- seriously, who sells used shavers as new, totally f'in gross -- but has everyone else stopped buying too?
update: grammar