Digitopoly :: It is tempting to suggest that Amazon are clearly competing on price compared with Apple. But, in reality, it is a different business model. Apple don’t try to make money from content (apps, books etc) and various calculations suggest they don’t which is why they cede pricing control to others. That means they make money when they sell devices and so they have to earn a mark-up there. And that is why Apple’s content store is tied to its devices and available nowhere else. Amazon want to maintain pricing control over content (and that has been a challenge) and pursue a ‘retailer model.’
An analysis by Joshua Gans, www.digitopoly.org
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