Is Amazon(AMZN) the next Apple(AAPL)?

By: ispeculatornew
Date posted: 03.02.2009 (4:00 am) | Write a Comment  (3 Comments)

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amznRemember the Apple of 1 or 2 years ago? When everything was flying high! Apple had its untouchable ipod, the item that despite competition had what was (and still is) a monopoly not because of lower prices or a better product but more because of the overall style of the product, the look and just having a product that is “in”. Its product has became so mainstream that it is difficult to imagine how even giants like microsoft or sony could enter the market and we know how hard they’ve been trying.

And recently I’ve began to see similar signs in Amazon with its increasingly hyped Kindle, a slick and great looking electronic book reader that is starting to get both rave reviews and an increasing number of sales. Some might say it has no shot because of its 300$ price tag but remember how the Ipod cost that much when it was released. Seeing Amazon founder Jeff Bezos on The Daily Show last week is another indication of the growing popularity of the item.

As well, as if the company could do no wrong right now, it recently made the headlines on US magazine “Business Week”, as the world’s best customer service among corporations, not bad to get such an honour.

I had recently went short AMZN mostly because it is trading at such a high premium compared to profits right now but I’m thrilled that the trade is now closed (with profits which is even better) because there certainly is starting to be a lot of hype around the company and its new star product!

I’m not saying I will not go short again on AMZN but I really think it will be important to be careful when trading the stock because its earnings could jump up if the Kindle gets more traction!! Just imagine schools starting to get rid of their big books and replacing them with electronic books! This would probably save money for students but also be better for the environment and a lot more flexible. You can also imagine how using documents at work could be a lot more effective.

While Amazon is still far from reaching enough of the population to consider it a trend, it could certainly reach a tipping point and from a short investor’s perspective, that is a little scary. Who knows, maybe going long will be the solution although the stock looks very expensive right now!

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3 Comments

  1. Comment by The Wild Investor — March 2, 2009 @ 10:17 pm

    I could definitely see kindle (or some similar product) in places of textbooks one day. That would be insane.

  2. Comment by N — March 8, 2009 @ 12:47 am

    I don’t think books will ever disappear. I’d still prefer having a book around just for the fact that I can’t bear looking at a screen for the entire day.

  3. Comment by IS — March 8, 2009 @ 12:46 pm

    No doubt, I agree 100%.. .but I think that as with many other documents, they will become less used. Sure, many people still receive bills through the mail, but an increasing amount of people do not really care about only getting an electronic copy!

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