Amazon and Apple’s Prices

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Amazon and Apple’s Prices

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Last week Amazon announced a host of products, even a voice controlled microwave.  This event comes only a few weeks after Apple announced several new products at their keynote event.  Big differences existing between these events show the different market strategy for the two companies.

Apple seems to be focusing on a higher income market, while Amazon seems to be focusing on a lower but still well off income market.  An example being Apple’s iPhone XR, the cheapest of the three announced being almost as expensive as the iPhone X -which will also not be discounted next year by the company.  On the other hand when comparing the Apple home pod and the Amazon Echo the echo is over $100 cheaper and of approximate quality.

The large number of different devices announced by Amazon at relatively low price points along with the smart plug seems to suggest that Amazon wants consumers to buy and connect as many devices as possible.  This sacrifice of per unit profit for more market share of a consumer’s connected devices might work well, and it will be interesting to see which company gains more market share and profitablity.

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