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Apple Vs Amazon The Race For 1trillion Dollars Market Worth by PhenomenalMorgan(m): 4:22pm On Sep 08, 2018
By Mary-Ann Russon Business Reporter, BBC News In early September, Amazon's
market value briefly went over
$1tn (£779bn), just over a month
after Apple became the first public
company in the world to achieve
such a feat. Both tech companies have grown over the last few
years, but will this continue? Apple and Amazon are as different
from each other as apples and
oranges. Apple is a tech company that is also a
trendy consumer brand. Its
computers and devices have often
been must-have gadgets, and
customers are willing to pay far more
for their products than cheaper alternatives. On the other hand, Amazon is where
people go when they want to get a
product more cheaply, more easily, or
more quickly. Since the iPhone first went on sale in
2007, Apple shares have soared by
1,100% and have jumped almost a
third in the past year. As for Amazon, the internet retail
giant has seen a steady, yet speedy
rise in its share price, with its market
value jumping from $600bn to
$700bn in just 16 days. In contrast, the same feat took Apple
622 days. Although Apple and Amazon offer
different products and services, they
are both technology firms and make
up two of the five best performing
technology stocks on the market -
typically known as FAANG, which stands for Facebook, Apple, Amazon,
Netflix and Google. Which company has a better outlook
on long term growth? Here's a look at
some of the key areas for each firm,
and how they are are performing. Device sales Traditionally, most of Apple's
revenues have come from its device
sales - particularly the iPhone, iPad,
iMac and iPod. Apple only has a 14% share of the
global smartphone market, yet its
revenues consistently dwarf its
nearest competitor. According to Strategy Analytics, in the
first quarter of 2018, Apple captured
$61bn in revenues, whereas
Samsung only achieved $19bn,
followed by Huawei in third position
with $8bn in revenues. "Apple's dependence on iOS devices
has been its strength, but moving
forward presents its greatest
challenge, in that opportunities to
grow its user base will be limited,"
Juniper Research's head of forecasting and consultancy Windsor
Holden tells the BBC. "We don't believe revenues will
decline, but the opportunity to
generate significant new revenues
will diminish over time, as increasingly
Apple relies on creating additional
value from existing customers." Amazon has performed below
expectations over the last five years
with its devices, which include Kindle
e-readers, Kindle Fire tablets and Echo
voice-controlled speakers, but
analysts say it can afford to do so. "Amazon can sustain a model where
they can sacrifice margins on devices,
because they generate revenue from
services and content," explains
Gartner principal analyst Roberta
Cozza. In 2017, there were 1.5 billion
smartphone shipments worldwide,
according to Juniper Research. However shipment growth will
continue to slow down over the next
five years, since most consumers in
western markets now already own smartphones. Apple also faces huge competition in
all regions from Chinese Android smartphone makers, who are releasing feature-rich premium
devices which are cheaper than Apple
and Samsung's devices. "In a competitive landscape where
you have this level of
commoditisation and low cost, it
becomes risky for Apple to heavily
rely on hardware sales," adds Ms
Cozza. Services When it comes to services, Apple and
Amazon's offerings differ
considerably. Amazon is primarily focused on
ecommerce, but apart from devices, it
also sells apps, has a cloud computing
business Amazon Web Services
(AWS), offers video content streaming
with exclusive TV content, and is also in the online payments space. AWS has proved to be particularly
lucrative - it has seen sales jump by
49% to $6.1bn in the second quarter
of 2018, and its operating profit has
risen to $1.64bn, from $916m in the
same period in the previous year. Juniper estimates that the cloud
computing market for software,
platform and infrastructure-as-a-
service will be worth over $145bn in
2020. Amazon is the largest player in this
market, with a third of the market
share. "Amazon's strength in the cloud
historically has been the ability to
attract an enormous variety of
customers; from large corporates
such as Netflix, to individuals," says
Mr Holden. "Moving forward, it will be a key
player in the Internet of Things (IoT)
movement, particularly given its wide-
ranging AWS tools and ability to
provide edge computing services." Apart from devices, Apple is mostly
focused on its Apple Music streaming service; Apple Pay contactless payments; and selling
music tracks and mobile apps on the
iTunes Store. But it could potentially develop other
services. "Apple has other avenues - immersive
technology in education; and think
about wearables and healthcare,"
says Ms Cozza. "I think still there are a lot of services
and opportunities where Apple can
grow." Long-term growth Both Amazon and Apple are hugely
successful businesses, and in fact
their joint total worth could
encapsulate 25 of the biggest
companies in the US. But which one has the greatest
potential for long term growth? Neil Saunders, managing director of
GlobalData Retail, feels that both
companies will continue to grow, but
at a different pace. "They're still really admired, but there
are concerns that Apple won't be able
to keep pushing their iPhone as
heavily as it has done in an era where
there's much more competition," he
tells the BBC. Apple's share price growth has seen a
lot of stops and starts, he says. It
needs another "breakthrough"
product and a new mass market to
sell to, or its growth will stagnate. As for Amazon, because it is a
younger company than Apple, it still
doesn't have an established presence
in many countries, so it has more
room to grow than Apple, which
already has a global customer base. "Amazon is much more of a mass
market player than Apple - with some
instances you could use Amazon
every day," he said. "With Apple you would only buy one
product a year. Amazon has a much
bigger potential to scale up than
Apple." On the downside, both companies
have grown so large that they now
face the threat of regulation from a
number of governments, to say
nothing of additional taxation. Still, the consensus is that Apple and
Amazon's fortunes are unlikely to be
dented anytime soon. "Both companies are facing issues
around regulations. There are issues
about taxation, but if it comes down
to a straight fight between Amazon
and Apple, then given that Amazon
has these various strong strings to its bow, then ultimately my belief is that
Amazon will win out," says Mr
Saunders. Source https://www.bbc.co.uk/news/business-45430686
Re: Apple Vs Amazon The Race For 1trillion Dollars Market Worth by PhenomenalMorgan(m): 4:42pm On Sep 08, 2018
with microsoft and google(alphabet injc) staggering around 900billion i laff at those who say agriculture is the best way to diversify our economy, tech is!! Imagine if amazon alone was is nigerian company imagine d efect it would have on our economy, realy we need to start looking at tech agric can help it only tech can give Nigeria revenue enough to cause the needed economy

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