It's Apple vs Amazon and, by at least one important measure, iTunes is the big winner — active accounts with credit cards attached.

It’s Apple vs Amazon and, by at least one important measure, iTunes is the big winner. Really? That’s crazy talk! While Jeff Bezos’ “everything store” sells more things, Tim Cook’s iTunes Store leads where it matter most — active accounts with credit cards attached.

Last week, when Apple reported yet another stellar quarter, CEO Tim Cook mentioned that there are now more than 800 million iTunes Store accounts, the majority of which bill directly to a credit card.

While Cook didn’t say whether that majority was 51 percent or even 99 percent, at the very least, the iTunes Store has at least 400 million credit card enabled accounts. Regardless, Apple has twice as many credit card accounts as Amazon.

While Apple vs Amazon has emotional resonance, the real meaning of this battle for 21st Century retail dominance is more subtle. For example, Tim Cook has been guiding Apple steadily toward offering a full service online payment service.

Apple vs Amazon: Data Points

More useless information designed to drive your imagination? Amazon’s calendar Q1 2014 revenue of $19.7 billion was roughly four iTunes Store receipts of $4.5 billion. However, Apple’s total take was for the first three months of 2014 was $45.6 billion.

For example, in addition to all of those iTunes accounts, Apple also runs its own swipeless check out service for its own brick n’ mortar stores. The company also has also partnered with Square and others for swipeless transactions at Starbucks and other retailers.

Though not a payment system per se, Apple’s iBeacon retail customer and information kiosking system is another way the company is ingratiating itself into retail.

Is iTunes really winning or is Amazon just getting warmed up?

Via 9 to 5 Mac, BusinessInsider


10 COMMENTS
  1. Morgan Stanley had a few other comparisons from mid-2012 that help to flesh out this picture to illustrate just how dominant Apple is:

    Revenue per user:
    Apple = $329
    Amazon = $305
    eBay = $125
    Netflix = $123
    Zynga = $7
    Pandora = $7
    FaceBook = $5

    Account Base (millions):
    FaceBook = 1,056 (not credit-card enabled accounts so much less valuable)
    Apple = 500 (remember these are 2012 figures)
    Amazon = 200
    Zynga = 180
    Paypal = 123
    ebay = 112
    Pandora = 66
    Netflix = 29

    Account growth in 2012:
    Apple = 55%
    Pandora = 39%
    Facebook = 25%
    Amazon = 22%
    Netflix = 20%
    Paypal = 15%
    ebay = 12%
    Zynga = 10%

    Free cash flow per account:
    Apple = $95
    ebay = $23
    Amazon = $9
    Facebook = 0
    Pandora = 0
    Zynga = -1
    Netflix = -2

    Notice that Google isn’t even mentioned in these figures. That’s because they only have an unbelievably minuscule 50-100,000 users for Google Wallet, the mobile payments system that they’ve been spending hundreds of millions of dollars on for the last 3 years. This has to be just about the biggest failure in Tech Industry history.

  2. The only reason no one uses it is because it is hard to get stores to install it. I have the fortune of having a place near me and I frequent that has google wallet and I absolutely love it. Another reason Apples numbers are so high is because they only care about making money and charge way more than the things are actually worth because they know the sheep will continue to buy stuff just to have the latest in all things apple. Amazon is different, they care about the customer and in some cases take a loss just to make sure the customer is happy. For instance my daughter just had to have the new iphone when she broke her phone by getting it wet. 4 Months later the power button no longer worked and it was next to impossible to get them to replace this defective button without having me pay for it. I had to go to 2 different apple stores and talk to a manager before they decided it fell under the warranty, which it did. As an amazon example I bought a subwoofer for 299. The next day I noticed it went to 199 because of a sale and after spending literally 10 minutes typing with them I was refunded a 100 dollars. The only reason apple is successful is because people continue to buy their products without realizing how much of a rip off they currently are.

  3. So let me get this straight:

    The only reason Apple has by far the highest number of credit-card enabled accounts in the world, the fastest account growth, the highest customer satisfaction ratings, the most popular physical stores etc is because they charge so much.

    ok, got it.

  4. Well no I dont know how you got any of that from what I said. I will admit Apple does have really cool stores and I like how you can interact with them with your phone its pretty cool. As for credit-card enabled accounts it is because they require you to have a credit-card. If android required a credit card it would destroy apple. Amazon also does not require a credit card, which is another reason it is not close to Apple. As far as customer satisfaction amazon tops the list when you include a list that amazon can be a part of. Apple does not even come close. What I said was that is the reason why apple is so successful. As another reason why apple has become so successful is because if people surround themselves with apple ‘sheep’ they are much more likely to buy apple products. For instance my daughters only reason for wanting a new iphone is because all of her friends had one. Plus the cables suck ive already been to the store 5 times to replace the charger cable and I never have any problems with my galaxy. Although the lightning connector is really cool and very well designed, but ive gotten off point.

  5. Umm, you do not require a credit-card to sign up for an iTunes account. Most people do however sign up with a credit-card as the ecosystem is so compelling.

    If Android required a credit card, it would destroy itself, not Apple, considering the demographic that buys Android devices.

    You said “Another reason Apples numbers are so high…”.

    Two of the four numbers you were referring to was Apple’s enormous total iTunes account number and the huge growth rate of people signing up with Apple. Hence my comment earlier.

    800 million people and families sharing the one iTunes account have voted with their wallets. Apple will be at 1 billion accounts within the next 3 months. Likewise, Apple will have sold 1 billion iOS devices before the end of the year.

    Ahem, according to ForeSee’s Retail Customer Satisfaction report, Amazon and Apple are the top 2 companies in terms of customer satisfaction with only 1 point separating them. I like Amazon too, but with only 234 million account holders, they trail Apple’s account/user base by a country mile.

  6. ps. Sheep mentality is normally used to refer to following the majority. Considering the majority of phone buyers buy an Android device, it is evident you are calling the wrong users sheep. Just thought I’d let you know your error. 🙂

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