Amazon dumps rival Apple and Google streaming devices
Amazon.com has announced it will end the sale of Apple TV and Google Chromecast video-streaming devices because those products do not work well with its own Prime Video service.
The move, which makes obvious sense in that the products from Apple and Google compete directly with Amazon’s Fire TV devices, is also a head-scratcher in that the e-tailing giant has decided to end the sale of the popular items (Oct. 29) as it moves into the important Christmas selling season.
According to Parks Associates, nearly 20 percent of U.S. households with broadband own at least one video-streaming box, while eight percent own a stick. Among those same households, Roku devices are used most often (37 percent) followed by Google (19 percent), Apple (17 percent) and Amazon (14 percent).
Michael Pachter, an analyst at Wedbush Securities, told Bloomberg that Amazon’s decision "was a bad move" and "sends the wrong signal to consumers."
According to Mr. Pacheter, only one-in-five Amazon customers are Prime members, so limiting the choices of the vast majority so that it can promote its own devices may wind up working against the e-tailer.
Dan Rayburn, a principal analyst with Frost & Sullivan, was also critical of Amazon. He told The Seattle Times that Amazon’s stated rationale is unconvincing. "To me, this is anti-choice," he told the paper. "They are making a strategic choice for their ecosystem."
Photos: Amazon, Apple, Google
- Amazon to ban sale of Apple, Google Video-Streaming Devices – Bloomberg
- Amazon to end sale of rival streaming-media players – The Seattle Times (tiered sub.)
- Amazon bars sales of Apple and Google streaming devices – The Financial Times (tiered sub.)
- Amazon, Apple, Google, and Roku dominate streaming media device market with 86% of sales – Parks Associates
Discussion Questions
What do you think of Amazon’s decision to no longer sell Apple TV and Google Chromecast devices? Was there another, perhaps better, way Amazon could have handled this rather than an outright ban of the rival products?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
Chris Petersen, PhD.
President, Integrated Marketing Solutions
This makes very little sense to me. The device is the “razor” but the content is the “razor blade.” Why would you stop selling razors?
Hopefully they’re not going to stop building their apps for the other devices too.
There must be more to this story, because on its face, it makes no sense from any perspective.
Bad decision. Amazon has stayed agnostic in its quest to sell everything. Now it’s dictating choices to its customers. Rather than limit and dictate choice, Amazon should make a product that is so compelling that consumers gravitate to it.
There is no such thing as “fair” in politics, war … or retail.
Just because Amazon or Alibaba are huge retailers selling online, that does NOT limit their right to selectively choose which products they will assort. Amazon routinely displaces smaller suppliers in categories that are “taking off” in terms of sales.
As for marketing and PR, there may have been some better ways of announcing the decision.
Regarding Prime only being one in five of Amazon’s customers, Prime is by far the most profitable segment and part of Amazon’s core long-term strategy!
However, rest assured that Amazon has one of the most sophisticated systems in the world to evaluate offerings; A/B test pages, click-throughs, etc. They can clearly measure the revenue and financial impact of their decision, and selectively bring back competitive brands through the seller “marketplace” if required.
I think it’s a bad move. If Amazon wants to be a truly universal marketplace, it can’t start picking favorites.
Any retailer gets to select the assortment it wants to sell to its customers. Amazon has already shown in the book business that it can be selective to enhance its own business when the opportunity is available, again through product curation.
The real question will be, does the customer care? I think that the ubiquity of being able to purchase any product anywhere usually at a best price (like directly from Apple) will allow customers to exercise free choice.
I also somehow doubt that where someone selects the hardware will dictate where they go for content.
I think Amazon was doing what any retailer/brand owner would have done.
I was surprised. One of the strengths of Amazon is the huge variety of choice of products with more brand variety than is available in retail stores. If Amazon begins eliminating products because they compete with Amazon products, consumers will have less reason to come to Amazon.com. When Walmart’s initiative at paring brands from their shelves resulted in a huge number of consumer complaints, they had to bring brands back to their shelves. Amazon.com as an exclusive source is very different than Amazon.com as an all-encompassing source.
Amazon’s behaving like a 19th century railroad tycoon taking a crowbar to competitors’ rails. Maybe their drones can be equipped with air-to-air missiles targeting UPS and FedEx.
This is simply a bad decision. In fact, I have all of the devices to compare, and while there are indeed integration differences, they are minor. Despite the statement, there is little reality behind it, so it sends the wrong signal to consumers.
Should Apple and Google then actually no longer support Amazon Instant Video or other Amazon applications? That will be painful for a very large number of consumers. Here Amazon has done what neither of these competitors have, that is, put their own products or services above the customer desire. Note that both Google and Apple offer all Amazon services, apps and solutions on their devices or in their markets. This is simply because excluding them would hurt their customers far more than help them. It is the same for Amazon and honestly, it seems uncharacteristic of Jeff Bezos who for so long and so consistently has focused on serving the customer. I expect this decision will be reversed, but we will see.
If Amazon wants to continue to be the first stop in our online shopping routine, why would they drop popular products? Do they think they’ll change our minds about buying them? Not likely.
Amazon, you need to rethink this one, for my 2 cents.
If you can’t beat ’em, ban ’em, apparently.
Doesn’t make sense given it is the Christmas shopping season; good news for Best Buy. Guess Amazon is taking the Apple closed system model for its content and streaming, or using it as leverage in negotiations for service support on their devices.