Can Amazon.com Successfully Challenge Apple?

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics around the investing world.

Amazon.com has apparently signed deals with four record labels for its cloud-based music service. The online retailer clearly has its sights set on Apple's iTunes and the digital distribution of music. The company wants to continue to push into distributing all forms of digital media, which includes streaming movies like Netflix. The move is likely to give more content options for the Kindle Fire going forward, which could make the tablet more desirable than ones from Dell. David thinks this is a good move for Amazon.com and believes it will continue to push hard in this direction. Ultimately, this should be good news for Amazon's share price.

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David Meier owns shares of Apple. John Reeves owns shares of Apple and Google. The Motley Fool owns shares of Apple, Amazon.com, Google, and Netflix. Motley Fool newsletter services recommend Amazon.com, Apple, Google, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On June 20, 2012, at 7:33 PM, Secs27 wrote:

    Amazon is an overvalued glorified retailer. One can stream video, buy books, buy music, watch/buy movies from many sources. All with better pricing than Amazon. Additionally, why would I want to purchase that low end device called the Fire.

    Amazon caters to a different clientele than Apple. Amazon appeals to the blue collar, lower income, less educated masses.

    Apple's ecosystem, their superior products and offering appeal to a high end, educated, affluent consumer.

    With the release of Microsoft's Surface Pro in the near future, their will be a horse race for apple as Microsoft appeals to the same clientele as Apple.

    Every arena that Amazon competes in is a low margin, commodity business with virtually no room to ever grow profits. Amazon additionally puts out subpar products that offer nothing l or proprietary like the iPad or now the Surface.

    Many sites are popping up everyday that have far better pricing than Amazon. Why would one want to shop at Amazon, when far better deals can be ound elsewhere. At 181 x earnings why would anyone want to invet in ths company. With virtually no profits, they are burning through cash on hand and competition is plentiful.

    I'd prefer to invents in apple on a pullback or microsoft rather than to risk an Amaon bankruptcy. There is some pretty creative accounting being done at Amazon and when this comes to light, look out below.

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