Apple, Amazon, and the Battle for Mindshare

Horace Dediu compares popular perceptions of Apple and Amazon:

Whereas Apple is perpetually given an expected lifespan of less than a decade, Amazon is expected to have an indefinite lifespan. This is because Amazon is seen as having no competition and Apple is seen as having infinite competition. In other words, Amazon is perceived as a monopoly and Apple is perceived as the innovator that is in a permanent state of being disrupted by the low end.

I think these perceptions are largely correct, and not because I think “Apple is doomed” or for some other click-baity nonsense.

Each company relies on its brand occupying a significant tract of mindshare in the consumer psyche. But while both companies may have overlapping territory they’d both like to claim, largely their domains are remote.

So, to game out prospective lifespans for these companies, you have to think about what might cut those lives short (or shorter, anyway), what might cause them to lose ground in the battle for mindshare. The big difference between to the two to me centers on what it is each company is understood by the consuming public to make or provide.

Apple is primarily a hardware/device company, though one that also provides services and content to augment that hardware’s value. Apple’s considerable mindshare could hypothetically be erased by the simple fact that hardware products wear out, new devices need to be purchased, or new categories of hardware can emerge. When that happens, gadgets made by other companies may pop up with lower prices, more compelling features, superior design (I said it was hypothetical), etc. With each device cycle, Apple is potentially vulnerable to losing ground. That’s not to say it’s likely or imminent (and certainly not “less than a decade”), but the threat is real and ever-present.

Amazon’s mindshare is, because of its foundation in a service, has the potential to be far more resilient. Amazon benefits from the simple fact that when people want to shop online, they think of essentially one brand. When they think of price comparisons, they think Amazon. When they think delivery, they think Amazon. And when they think of entire product categories like media and electronics, they think of Amazon. This has been the case for years, and there’s no sign of any other company challenging this state of affairs. And as more and more time passes with this as the status quo, it will become only more entrenched. Perhaps another outlet will begin to compete on price, or another on delivery times. But then they’d still have to catch up on selection, ease of use, content synchronization, and myriad other factors before they even began to catch up psychically. In the battle for mindshare, Amazon is very, very safe.

It feels unfair, particularly to followers of The Steve (peace be upon him), to talk about the steely Apple in such (relatively) precarious terms in comparison to the cacophanous Amazon. But it’s just a reflection of the fact that one company sells stuff, and the other makes stuff. More or less.

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