Amazing Amazon


#687

@marcus335 You wouldn’t happen to be doing programming on the payments side of things?


#688

Like manufacturing moving to China, for cost reduction, services are moving to India or other parts world as cost reduction initiative.

China manufacturing vs US manufacturing is 1:5 range appx. If a part is made in USA that may incur $100 which will incur $20 at China (this includes mfr+ship+insurance) until reaching US port.

Same way, service in India vs service in USA is 1:4 range appx.

For both, quality is a question, but US companies like AMZN freely getting returns. Even after returns, cost is way low.

That is why Trump wants to stop this, but it is beyond his level as the cost outside is so low, businesses keep on getting it from outside.


#689

Exactly, many American companies are not capable of making high quality products. For example, GTAT can’t make good quality sapphire in sufficient quantity. Now INTC can’t make 9nm.


#690

Amazon, the upcoming ad giant:

Despite trailing far behind the leaders, Amazon’s ads are having an outsize effect on the company itself. Its revenues from ad sales worldwide in 2018 could hit $8bn, contributing perhaps $3bn in operating profit—over a quarter of the total. Michael Olson of Piper Jaffray, a brokerage, says that by 2021, it is “highly likely” that profits from Amazon’s ad business will exceed those from its lucrative cloud-computing unit, Amazon Web Services. Amazon loses money on its core e-commerce business, but can use the fat profits from advertising in the same way as it has used the cash from cloud computing—to push into new businesses and countries, says Brian Nowak of Morgan Stanley, an investment bank.


#691

No.


#692

Careful in trusting such article. Do you honestly think that it is possible. Draw on your experience with MU. Personally I doubt that would happen. Advertisers don’t switch that easily.


#693

#694

#695

Amazon reportedly has its eye on restaurants, gas stations, and other stores that wouldn’t consider Amazon a direct competitor.

For now? Those who work with AMZN on this is not thinking long term.

The Journal reported that Amazon may also hit snags with which companies are willing to assist a company that’s likely a direct retail competitor and is credited with starting the “retail apocalypse.”


#696

OK. Amazon is the next hit target. Facebook can come out of the penalty box now.


#697

#698

Right, you are not robots. That’s why we need to put real robots in there to replace humans.


#699

#700

#701

It’s getting so small players won’t be able to compete. The big cloud players are all designing their own chips that are far more efficient than anything that can be bought. Few companies have the deep pockets to design and build their own chips. It’s really bearish news for Intel and possibly nVidia.


#702

So far only mega cap companies like Apple, Amazon, Google, … who else?


#703

Tesla for AI chips.


#704

MSFT

Oracle claims their cloud is better running on their own HW. I’m pretty sure all their stuff is using Intel though.


#705

I need to curse AMZN otherwise manch would win the bet!!!


#706

You do not need to curse…Trump is there to take care of it.

How?

When I wanted to choose either AMZN or AAPL, I finally landed at AAPL for the reasons given below.

AAPL has iphone and computer products, which are mostly on essential commodity as of now. The P/E is very low that is good for recessionary period. They will also go for service side. They become dividend payer, good for investors. Above all, certified by Berkshire.

AMZN is completely service, higher P/E. However, they may eventually reduced the P/E over time, equally good, non-dividend payer.

When it comes to tariff impact, Amazon sellers import will be higher than AAPL’s import content.

Amazon sellers margin will be lessor than Apples margin on imported goods.

Apple is going for joint venture with Foxconn for winconsin factory, will resort to local manufacturing while Amazon sellers unlikely do by virtue of small players.

IMO, tariff impact (already 10% in force) to AMZN is higher than AAPL. I did not even split 50:50 but went to AAPL fully.