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The Macalope Weekly: CEO chatter

The Macalope | Nov. 6, 2012
It’s all about the CEOs this week, as Steve Ballmer takes potshots at Apple, Amazon’s Jeff Bezos gets a love letter, and Tim Cook gets a “Dear John” letter.

Ah! So, naturally, the contrast is between Apple, which reported revenue of $36 billion and net profit of $8.2 billionits highest September revenue and earnings ever, and Amazon, which reported a loss of $274 million.

No, according to Gobrys analysis, the big contrast is between iPad sales, which were down from the prior quarter but still up 26 percent from last year, and his made-up assumption that Amazons loss must be driven by huge Kindle Fire sales, which he says Amazon sells at a loss. Amazon, of course, does not report Kindle Fire sales numbers, so Gobry is pulling this from places that things should not be pulled.

If you put that next to Apples lower iPad numbers, it suggests that the Kindle Fire is eating into iPad sales in a significant way.

Because there are no other factors that could possibly explain this! Just think of how well Amazon would be doing if its losses were even larger!

Gobry goes from this unvalidated assumption to ALL HAIL THE IPAD-KILLING KINDLE FIRE in 3.5 seconds.

The Kindle Fire is not a success because it imitates the iPad. The Kindle Fire is a success because of the ways it doesnt imitate the iPad: different form factor, different pricing and business model, and its own content and apps ecosystem.

Now, the Macalope suspects the Kindle Fire is selling at least fairly well, but thats total supposition on his part, based on nothing more than anecdotal evidence. At least the horny one has actually seen people using them, unlike pretty much every Android-based tablet that came before it. But to blame a quarter-over-quarter drop in iPad sales on the Fire, the updated version of which wasnt even announced until the third month of the quarter, is magic candy thinking.

Its still early days. But my lesson of those earnings is that Amazon is crushing it in the tablet market, and its got Apple playing defense.

All because Amazon reported a loss.

Gobry doesnt address the obvious flaw in his lauding of Jeff Bezos if this is true. If Amazons big loss is due to selling a ton of Kindle Fires, shouldnt that loss have been offset by the company selling lots of content? That is, after all, the whole idea behind selling the Fire so cheaply. If handle sales are so good, how come people arent buying razor blades?


Saturday Special: Get over yourself

Another week, another pompous Dear John letter to Apple. The Macalope wouldnt pay any attention to them but theyre so funny

This week its Ed Conway writing DEAR APPLE: Im Leaving You (Business Insider, so no link but tip o the antlers to Harry Marks).


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