Deal Underlines Amazon’s Crucial Role As an Online Retail Channel

Last week, Amazon reported that it has signed an agreement with Apple that will greatly expand the selection of Apple products on its e-commerce sites in the US, the UK, France, Germany, Italy, Spain, Japan and India. The deal will allow Amazon to sell Apple’s latest devices including the new iPad Pro, iPhone XR, iPhone XS, iPhone XS Max and Watch Series 4, as well as its line of Beats headphones.

Although many Apple products have been available on Amazon sites for some time, most of them have been sold by resellers, with pricing and conditions varying widely. Under the new deal, Amazon will limit resellers of Apple and Beats products to those authorized by Apple. Independent sellers will have their listings removed after 4 January 2019, but they can apply for permission through Apple.

Amazon and Apple have been fierce rivals for years, but have now found reasons and ways to cooperate. The agreement between the two giants is a sign that they’re on better terms than previously. In 2015, Amazon removed the Apple TV set-top box from its site to promote its rival device Fire TV, and also for not supporting Amazon Prime Video. It wasn’t until earlier in 2018 that the Apple TV made a return to the site. Amazon can be protective of its ecosystem product, and this is likely to be the reason why it won’t sell Apple’s HomePod speaker, which competes with its Echo range of devices and Alexa ecosystem.

In most markets, Apple sells its cellular products through operator channels, its own retail stores or third-party retail stores where it has a high degree of control on pricing and the way products are displayed. It’s very rare that an operator or retailer will dare to deviate from Apple’s strict pricing and retailing policies.

The additional exposure will help Apple reach more consumers through one of the world’s best-known online shopping channels, where a growing number of customers have been buying unlocked Android smartphones and tablets. Indeed, our recent survey of consumers in the UK and France showed that Amazon is becoming an increasingly important destination for customers buying mobile phones (see Cracking the Code).

The announcement didn’t mention when the wider selection of Apple products would be coming to Amazon, but we expect them to arrive on Amazon’s US site before Black Friday. That’s just a week away.