Apple and Amazon’s Strategic Difference; Announcing TI 50: The Information’s Weekly Newsletter

I’ve been to a lot of startup conferences. I felt it was time to build a new one. So on Dec. 9, we are hosting our first TI 50 conference, a chance for leaders in the private tech sector to come together to discuss and tackle the biggest challenges of the moment—from the future of the office to building diverse teams to managing your cloud stack, cap table and more. We’re running the event in conjunction with publishing our first list of the 50 most promising startups: TI 50.

A couple of things will make this event stand apart: first and foremost, our community of attendees. As I reflect on our recently wrapped SPAC conference, I feel extraordinarily grateful for our fabulous attendees, who kept our speakers on their toes with question after question. I’m still brokering follow-ups.

Then of course there are our phenomenal speakers. Amir, Kate and I worked hard to think through the right leaders to talk to this moment, and are thrilled to announce many of them, including CEOs and founders of Carta, Notion, Substack, Zola, Cameo and so many more.

We have loaded the event with a number of perks, including a free plus-one ticket. More here.

Now on to this week’s column, written by the great Nick Wingfield.

Apple and Amazon

This week brought a reminder of those distinctions with Apple’s unveiling of the M1 chip, its first microprocessor for the Mac produced in-house, along with a trio of new computers based on the chip. The announcement was the culmination of years of speculation that Apple would eventually divorce Intel, which had supplied chips for the Mac since 2005. It was only logical that Apple would do so after spending the past decade very fruitfully shipping iPhones and other mobile devices equipped with its own in-house processors.

When Apple starts making a key technology internally, it invariably keeps that technology for its own use. The M1 is all about differentiating Apple’s products with better performance—from applications that load faster to longer battery life. Still, don’t ever expect to see Apple start selling M-series chips to Lenovo, Dell or Microsoft for their computers.

Open for Business

That approach of Apple’s is not typically how Amazon rolls. An example can be seen in Paris Martineau’s deeply reported story this week about how Amazon is becoming a force in trucking. Over the past several years, the internet retailer has started investing heavily in its own online freight brokerage—an Uber-like platform for finding truckers to move Amazon goods in 18-wheelers between its facilities over the middle mile.

Using that platform, the company has successfully shifted much of its own freight moving in-house and away from big incumbent brokerages in the trucking industry. But unlike Apple, Amazon now has opened up the technology to let drivers book trucking jobs for non-Amazon freight, too.

It’s classic Amazon. More than a decade ago, the company took its spare web capacity and technical know-how in running the technical infrastructure behind its own website and turned it into Amazon Web Services, the first major cloud-computing service. Similarly, it opened its retail platform to independent merchants, offering them an online marketplace for their goods and the ability to tap Amazon’s logistics expertise through its fulfillment centers.

Amazon’s online marketplace was in the news this week, too, as part of an antitrust case that European competition authorities brought against the company. The Europeans accused Amazon of improperly using data about smaller merchants on its marketplace to gain an advantage for Amazon’s own products.

Still, Amazon’s approach to vertical integration could invite great regulatory risk for the company over time. By opening so many of its expansion businesses to outside participants, it is likely to face accusations again and again that it can’t fairly play the role of both player and referee, which is the issue at the heart of the European marketplace case.

It is conceivable that regulators could more closely examine whether Amazon uses data from AWS customers to help it figure out new businesses to get into (it has said it doesn’t do this). Amazon, for example, became a significant competitor to Netflix, a longtime AWS customer, in video streaming.

Of course, this is all highly speculative. Some people are skeptical of current antitrust enforcement actions against Amazon, believing that it will be difficult for governments to show consumers have been harmed as a result of its actions.

Count David Yoffie, a professor at Harvard Business School, among those skeptics. He also doesn’t believe that Amazon’s approach to vertical integration will make it a bigger target for enforcers than Apple. “I don’t think the risks per se are exacerbated,” he said in an interview.

The coming years will show whether that’s true. Apple also has attracted attention from antitrust regulators in Europe and the U.S., which are investigating how it competes against other companies on the iPhone App Store with its own services (the Europeans are also looking at Apple’s business practices in digital payments).

As in the Amazon case, the App Store investigations are examining Apple’s dual role as a player and referee. But Apple’s forays into vertical integration result in fewer such situations than similar moves at Amazon. It would be ironic if, by staying more closed, Apple proves to be less interesting to antitrust regulators in the long run.

This Week’s The Information’s Articles:

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