Amazon’s (NASDAQ: AMZN) stock has outperformed Apple’s (NASDAQ: AAPL) over the past year, past two years, and past five years. But, Apple is the leader, supposedly, in the creation and marketing of tech products. It has been able to launch new versions of the Mac, iPhone and iPad since 2007. Amazon is not in Apple’s league, or so it is said.
A comparison of the market cap of the two companies is hardly a comparison at all: Amazon’s is $90 billion to Apple’s $337 billion. Amazon’s annual revenue is close to Apple’s but its profits are not.
Yet, Amazon has been just as creative as Apple, it could be fairly argued. Amazon has vanquished or set back many of its bricks-and-mortar competitors, like Borders. It launched the most popular e-reader — the Kindle. New versions of the product may have features that will make it more like the Apple iPad. Amazon dominates the e-book market, despite attempts by companies like Barnes & Noble (NYSE: BKS) to enter it successfully.
Amazon was one of the earliest companies into cloud computing. It could be called a pioneer, as a matter of fact. The firm’s Amazon Elastic Compute Cloud is five years old. It allows outside firms to use the Amazon server and bandwidth service on leases, rather than having to build expensive server farms of their own. And Amazon has added products based on its cloud capability. Most recently its “Cloud Drive” allows consumers access to 5 GB of storage for free so that they can access files from anywhere. It has also introduced the Kindle Cloud Reader to allow consumers to read books without downloading files.
Apple has built its armada of successful products that began with the iPod in 2001. Amazon, over the same time, has turned its online book sales service into the largest e-commerce site in the world, a veritable supermarket of goods and services that is not matched by any of its rivals. It has launched a VOD service that competes with cable companies, Netflix (NASDAQ: NFLX) and Apple. Its app store is among the largest in the world for Android application downloads.
Jeff Bezos has been a fixture in the tech industry for nearly as long as Steve Jobs. He started Amazon in 1994, at the beginning of the Web 1.0 period. He made it through the tech stock market crash in 2000. He may operate in Apple’s shadow, but his company’s contributions to the broad tech market are nearly as great.
Douglas A. McIntyre