Amazon vs. Apple – Who Wore It Better?

Apple and Amazon have a collective $2 trillion market capitalization. Apple has a small edge (for now) at $1.1 trillion to Amazon’s $0.98 trillion. Regular readers know we think that spread will continue to shrink given AMZN’s larger addressable market. But since Microsoft’s market cap doesn’t quite hit a 9-handle yet ($877 billion today), the trillion”ish”-dollar club remains a cozy duo.

Worth noting: both had major product announcements this month. Apple launched its latest iPhones. Amazon was out with a new raft of Echo home speaker and automation devices (a microwave and wall clock among them), along with a car-based product. Apple’s launch was the typical high profile affair; Amazon’s event less so.

Comparisons may be odious, to paraphrase Shakespeare, but it’s what we do. Specifically, we were curious about how much attention these launches received from US consumers. To assess that, we ran an analysis of relevant Google searches for the last 30 days.

The bottom line is that Apple did a far better job at focusing consumer attention around its iPhone launch than Amazon was able to muster with its Echo product introductions. It’s not even close:

• On September 12th, the date of Apple’s release, US searches for “new iphone” were 100x those for “amazon echo”. This was before the new Amazon products dropped, but a useful comparison for the next point.

• On September 20th, the date of the Amazon announcements, “new iphone” still outpaced searches for “amazon echo” by 13:3. This was over a week after the phone launch, but 1 day before some of them went on sale in the US.

So is Amazon hopelessly outgunned in consumer electronics? We all know better than that. Some further Google Trend data reveals the rest of the story:

• US Google searches for “amazon” are routinely 2-3x the number of searches for “apple”.

• The only time “apple” searches outnumber “amazon” are on product announcement days like the recent iPhone reveal. On September 12th, “apple” searches beat “amazon” by 24%. A week later it was back to 2:1 in favor of Amazon.

The upshot here is that Amazon doesn’t need attention-grabbing product launches for Echo/Alexa because potential buyers of those items will see them every time they visit the Amazon website. And if Google search trends are any guide that will happen at 2-3x the frequency of visits to Apple’s online portal. Apple, by contrast, needs all the attention it can get to push traffic and potential purchases. Apple.com is simply not the destination that amazon.com is.

Since both companies sport essentially the same market value, this comparison shows there is more than one way to achieve a $1 trillion in equity value. Apple gets there selling high priced, high margin, must have products. Focused attention is everything. Amazon sells day-to-day items at lower margins and scales into other opportunities (think cloud computing, but also Alexa) opportunistically. They don’t need the attention; they know you’ll be by soon enough.

The big question is what approach will deliver the NEXT $1 trillion in market valuation? You can guess our answer. If any company can get there among those currently public, it should be Amazon.