Filed under: Apple Inc (AAPL), Amazon.com (AMZN)
Apple, Inc. (Nasdaq: AAPL) and Amazon.com, Inc. (Nasdaq: AMZN) have been hot companies and, yes, hot stocks. But the two companies are taking shots at each other.
Of course, as was expected, Amazon.com launched its digital music store, which has about 2.3 million songs. But as the company is wont to do, it has engaged in some price cutting. For example, a song costs between 89 cents to 99 cents. An album goes for $5.99 to $9.99.
Well, to get some analysis on this, I turned to Rafi Mohammed, who is an expert on pricing. He operates Pricing for Profit and is also the author of the book, the Art of Pricing. According to him:
“Amazon’s entry into the digital music market will significantly affect Apple. Drawn by steep discounts, many music aficionados will switch to Amazon’s service. This will inject some much needed competition into the digital music market, which will help music companies gain negotiating power. Additionally, a strong iTunes competitor may offer co-branding opportunities for music device makers. My prediction: this is the catalyst to music companies moving to their beloved variable pricing (some prices higher than others) model and new digital music players that will successfully challenge Apple’s iPod.”
Tom Taulli is the author of various books, including The Complete M&A Handbook
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