Is Amazon a good 'anti-Apple' model?

The only constant is change.

Business, society, human relationships—interestingly, very few companies manage to remain prosperous for long. What were once "evergreen industry leaders" are now struggling with tough transformations. Japan's once-dominant mobile phone industry has been shattered by external competitors and plummeted into a valley of decline. Past giants dreamt of invincibility akin to Qin Shi Huang, only to be brought down by the harsh reality of a knockout punch.

Almost all companies fail when they attempt to shift their business models. Asycmo’s Horace Dediu says, "Business is about balancing various changeable factors on a razor's edge. Nearly all resources are utilized to protect this balance." For instance, Microsoft, which had everything it wanted in the PC market, failed to leverage low-power microprocessors as a pivot point to gain an advantage. Low-power microprocessors enabled mobile computing, which in turn facilitated new ecosystems and software profit models. Then there’s Nokia, the former leader in the smartphone market, with its own operating system, platform, and a solid user base. However, it didn’t use its ecosystem as a pivot point, resulting in the loss of all these advantages. And Apple, after successfully selling the first personal computer with its own developed operating system and opening up the personal computer market, failed to use "licensed system software" as a pivot point to allow others to manufacture computers.

These corporate giants had numerous opportunities to change but ultimately did not.

Looking at history’s patterns, consider this perspective: “Amazon has a flexible business model; even though it isn't profitable today, it will be someday.” This judgment assumes that Amazon can easily alter its business model—from selling things at slim profits and investing assets in channel development, to selling products at higher margins without over-investing in channels. However, Dediu believes this premise of Amazon's business model doesn't hold true.

Dediu disagrees with the notion that Amazon’s business model is "anti-Apple." Apple also has businesses similar to Amazon's: iTunes maintains steady growth rates of 25% or more and similarly offers hardware like the Apple TV with almost negligible profits. Perhaps one day, iTunes could become profitable, but something else would need to drive that transformation, such as a payment process.

At a deeper level, Apple and Amazon share more similarities than differences. Their job postings list similar roles. Both focus on user satisfaction and control all variables related to that satisfaction. They both possess long-term vision, driven by mission rather than competition.

The difference between the two companies lies in outside predictions regarding their sustainability. Externally, Apple is often seen as having a lifespan of less than ten years, while Amazon is viewed as eternal. This is because Amazon appears to have no competition, whereas Apple seems to face endless competition. Another view suggests that Amazon is perceived as monopolistic, while Apple is seen as an innovator disrupted by low-end players.

Dediu disagrees with both views. He believes that Apple is also fragile but focuses on entering new markets from declining old ones. This is a difficult strategy, one that few believe possible. His view on Amazon is that its monopoly is also fragile. This is also an unpopular idea; the company's development depends on many variable factors.

Because Amazon excels at using technology, retail stores are now struggling to survive. But in the future, Amazon will also decline; its strategies can be replicated by competitors. Buyers usually choose Amazon for convenience, not just price or website usability. Instead, new information technologies will shift value and the value chain again, allowing shopping, browsing, and product provision directly through suppliers, bypassing intermediaries.

Dediu believes that Amazon already exhibits some monopolistic characteristics in terms of distribution channels, but it may be too late to transition to a more profitable model. He doesn’t want to say failure is inevitable, but he hopes to highlight that success is unpredictable, and decline is common.