If I were Amazon I’d be selling the hardware, not the content.
Shaun Rein, the managing director of China Market Research Group, speaking to Bloomberg.
It’s interesting just how poorly Amazon is doing in China. This can be seen two ways: either they’re being out-Amazon’d there by Alibaba and will never be able to crack the country (just as eBay couldn’t). Or the massive upside if they are able to crack China eventually.
But, as Rein’s quote indicates, Amazon may have to flip its content-driven model. It’s hard to subsidize hardware with content sales when people refuse to pay for content.
In China, the Apple brand on the iPhone is a status symbol. You’re going to have the Samsung device, which is a nice phone, or you’ll show your friends you have an Apple device. It’s like wearing a pair of Levi’s versus a Costco brand.