Source: Amazon.com
Amazon and Apple get co-opetitive
More Apple products are getting the stamp of approval from Amazon, which will officially enable the sale of a range of new devices on-site from the tech brand.
Amazon is approving the sale of the latest iPad Pro, iPhone and Apple Watch models by authorized resellers rather than just through the third-party marketplace, according to TechCrunch. Independent sellers will, in fact, have their listings removed. Amazon already allows the official sale of some products, such as laptops and Beats headphones.
The change in the trade partner relationship raises questions about the extent to which Amazon considers Apple to be a competitor and what Amazon’s long-term plan might be for the device market. The two companies have been involved in an ongoing push/pull over their competitive devices, with Amazon sometimes removing Apple products from its site or Apple refusing to play ball with Amazon in some other manner.
For instance, in 2015, Amazon stopped selling Apple TV, arguing that it didn’t work well with Prime Video. At the same time, surprisingly, Amazon decided to discontinue its Amazon Fire TV, the product most directly competitive with Apple TV. In 2016, however, Amazon introduced its upgraded streaming device, the Amazon Fire TV Stick, which can be plugged into any television’s HDMI port and is Alexa-enabled.
But in 2017, Apple and Amazon reached a deal and announced the return of Apple TV to Amazon, in conjunction with the appearance of the Amazon Video app on the device according, to TechCrunch.
The items Amazon continues to disallow from sale on the website, however, may indicate where it sees its real competition in the future. Apple’s HomePod voice assistant is, according to TechCrunch, still not for sale on Amazon. This is also true of Google’s competitive Google Home product.
A willingness to play ball despite having some of its products restricted may speak to other concerns for Apple. There has been speculation that dwindling unit sales thanks to market saturation and the price of new devices was the reason behind Apple no longer disclosing unit sales for iPhones and some other products.
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Amazon expands its assortment of Apple inventory including the latest devices – TechCrunch
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Amazon dump rival Apple and Google streaming devices – RetailWire
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The Apple TV is back on Amazon – TechCrunch
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Amazon’s next-gen Fire TV Stick with Alexa is only $40, and it launches this week – BGR
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Why are Wall Street analysts so irked over Apple’s reporting changes? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: What do you make of what appears to be a warming relationship between Amazon and Apple? Will the Amazon/Apple sales relationship affect rivals competing with either company?
Poll
BrainTrust
Chris Petersen, PhD.
President, Integrated Marketing Solutions
Harley Feldman
Co-Founder and CMO, Seeonic, Inc.
No brand, not even Apple can afford to ignore the reach and growth of Amazon. The future conflicts will be less about products and more about content and media. In the case of both of these giants, content creation and streaming media is relatively new. Both need media distribution in order to gain credibility and customers for streaming.
How many remember that great line in The Godfather, “Keep your friends close and your enemies closer.” I see this as a possibility for the relationship between Amazon and Apple. Amazon has proven that it is not the most trustworthy company and Apple as well has been known to make some moves that some would find questionable. Working together gives both companies an opportunity to keep one eye on their competitor while at the same time allowing them to protect what they feel they must. As technology continues to move at a rapid pace, both companies know the importance of staying one step ahead. Amazon wants to be in everyone’s space, and Apple is well aware of that. So I would expect to see a relationship continue but slowly and with definite bumps along the way.
In some ways Apple and Amazon compete. In other ways they don’t. However, they are both giants that are popular with consumers so there is no harm in working together when it makes sense.
Standard co-opetitive play. Apple already sells its products everywhere — from Target to Best Buy — Amazon would prefer more “legitimate” sales from Apple rather than third-party resellers — approved or not — resulting in higher sales, the right target market and the opportunity to capture data about Apple users. For Apple, it gives them expanded reach plus control over what is distributed in the Amazon universe. This may affect some rival players, but Best Buy’s success is a testament that it won’t be adverse.
It’s just business. Amazon knows consumers want Apple products and there’s no reason for Amazon not to benefit from those sales directly. Apple wants their products available wherever their target consumers shop — and that means being present front and center on Amazon. It’s a win-win for both from a sales/revenue perspective and also provides a way for each to keep an eye on the others activities for those areas where they do compete. If big tech has proven anything it’s that there is room in consumers’ lives for all of these products and the spend levels are there to prove it.
Apple and Amazon compliment each other – Apple has great products and Amazon has a huge customer base. It is inevitable that they would work together. This relationship may affect rivals like Google. However each rival will initiate the agreements that work for them. Product suppliers will be interested in pursuing a relationship with Amazon due to its large consumer reach. Even Nike figured out it could not ignore Amazon as a sales outlet.
The new battleground is owning the consumer’s home through connected devices. The question will be whether you are on team Google or team Amazon. Not unlike Coke/Pepsi, PC/Apple or Ford/Chevy. We are all are part of a brand community. In order for Apple to secure part of the consumer real estate, they need to align with one of the distribution superpowers. As noted — product and price may be a necessary stepping stone, but the real value in the new shopping landscape is content, storytelling, AND publishing! It doesn’t matter how good your story is if you can’t deliver it!
Amazon and Apple are both in a position to provide the consumer with what she wants. Amazon is missing out on a decent chunk of revenue, and the pre-holiday timing makes sense. There is massive convergence going on among The Four (Apple, Amazon, Google, and Facebook) in respect to retail.
The other interesting news over the weekend was the Sephora/Google partnership. Every retailer/brand is realizing (even behemoths like LVMH) that they need to have a realistic amount of exposure within one of these mega-company’s infrastructure — whether that is content, hardware, or cloud services!
Playing nice with Amazon is becoming a necessity for any brand. Previous to this agreement, Amazon was allowing independent resellers to sell select Apple products on the site, meaning Apple had little control over who was selling products and how they were presented on the marketplace. This situation is a fairly common one, as Amazon allows anyone to sell almost any product on their platform, which often leads to poor brand representation in product page content, pricing, and overall customer experience.
We are seeing many brands trying to take back control on the channel by cutting out resellers, implementing more controls in the supply chain, selling on Amazon themselves, or like Apple, creating agreements with Amazon restricted to authorized sellers only.
The timing is right for both companies to team up as they are both under topline pressure heading into the holiday shopping season.
Amazon’s Q3 revenue was about $500 million short of analyst expectations and Apple announced they will no longer report unit sales, which are flattening. Amazon will be even more of a destination for gadgets and Apple should see better adherence to pricing as authorized resellers replace independent firms. Amazon and Apple mended fences on Apple TV last year, and Amazon has lacked a competing phone for some time (finding an answer in Alexa, a still-protected business, instead).
Whether consumers will benefit or not is up to debate. Apple’s reconciliation with Amazon coincides with pressure on the third party market. As noted above, authorized sellers will be held to approved retail prices or face Apple’s ire. At the same time, Apple announced new limitations on refurbishers who don’t spend at least $10 million per year with Apple.