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That's not economics, that's magic. For comparison, note how the author indicates specifically Apple's economic strategy: make money on device sales + encourag
by runako 14y ago
That's not economics, that's magic. For comparison, note how the author indicates specifically Apple's economic strategy:
make money on device sales + encourage more device sales by making less money on media and apps
Note that all of the numbers in the Apple strategy are positive.
There's nothing comparable for his Amazon suggestion. "Miniscule margins + massive patience" works when price > 0, for all existing Amazon product & service lines. Applying that formula using negative margins doesn't work.
It's one thing to say Amazon can make money on volume by selling TVs for razor-thin margins. It's something entirely different to suggest they can make money giving away $200 smartphones + $350/yr voice & data plans free in perpetuity. That's the part the author conveniently skips over.
- seiji 14y agoOh, I see where you're coming from. You're right if we limit the ecosystem to just phones, phones, phones. But, Amazon is kinda everything in the frigging world. The amazon phone would (obviously) tie to your amazon account. You could instabuy anything. They would make buying things from Amazon a first class feature of the device. Having the device (much like having Amazon prime) would mean you most likely spend more through Amazon. I admit it's a magic fairy dust line of thought, but it's still quite compelling. Suru, I need more toothpaste by Friday. Same kind as last time, sir? Yes, Suru. By your command.