Lots of money. Fistfuls of money on every venture. Let’s compare Apple’s strategy and performance with two major competitors in the tablet arena, Google and Amazon.
Build It And They Will Come
Among technology giants Apple has a simple, single-minded focus. Build better products. That includes hardware and software and the surrounding ecosystem.
Apple’s reward for their stubborn Think Different™ attitude all these years is a list of highly profitable hit products used and loved by hundreds of millions of loyal customers.
The company’s latest financial results tell the tale. Record quarterly revenue and profit. Record annual revenue and profit.
In the last quarter alone, Apple’s revenue hit $36-billion and profit was $8.2-billion. Steve Jobs’ company sold almost 5-million Macs, 14-million iPads, and almost 27-million iPhones.
If there’s a chink in the armor that Steve Jobs built, it isn’t in evidence by the numbers.
Speaking of numbers, how are Amazon and Google doing these days? First, Amazon. This is the online store giant with the CEO who fancies himself as a new Steve Jobs. Jeff Bezos’ Amazon lost $274-million in the most recent quarter. Despite being the 800-pound gorilla of online merchandise sales, Amazon has barely been profitable in recent years.
Amazon decided to compete with Apple and introduced their own line of 7-inch Android-like media tablets. How’s that working out? Amazon won’t release sales numbers, either total revenue or units. But the company just lost a boatload of money.
Second, Google. This one-trick pony advertising behemoth also decided to compete with Apple in the smartphone arena. How’s that working out? Recent financials missed the mark in both revenue and profit while costs skyrocketed. Google has spent upwards of $20-billion to compete with Apple’s iPhone and what do they have to show for it?
Like Amazon’s Kindle Fire HD, Google’s Nexus 7 tablet is also being sold at cost. That means no profit. Both Amazon and Google hope to make up the losses on volume. How’s that working out? Apple sold more iPad models, with a starting price at $499, than all tablet makers combined. Even those which sell $200 tablets at cost.
Google’s revenue and profit comes from advertising. The search giant’s ad revenue was up, but not much, and revenue was down. The all important cost per click dropped for the fourth quarter in a row.
Almost six years after Apple introduced the iPhone, and almost three years after Apple introduced the iPad, the competitive scene has become intense with dozens of smartphone manufacturers taking up arms against Apple with Google’s Android OS, and tablet makers rushing to market with $200 plastic blobs that don’t make money and don’t sell.
Apple remains at the pinnacle of prosperity while competitors such as Google and Amazon have trouble making a profit even with their bread and butter business.
Why? Why has Apple succeeded where Amazon, Google, and others have failed?
Some chalk it up to marketing. Others say it’s Apple’s cult following. It’s neither.
Apple’s products are greater than the sum of the parts. Customers perceive the quality, the value and seamless usability that is the company’s hallmark. Who else builds and integrates products and services so well? Customer are loyal because they love Apple products. It’s that simple.
Why don’t customers love the Nexus 7 or the Kindle Fire HD or other smartphones and tablets the way they love and cherish the iPad and iPhone and Mac?