Amazon, Apple partner on e-commerce in a blow to third-party resellers
- Amazon struck a deal with Apple to expand the selection of products coming directly from Apple on its site and gain access to Apple's latest devices, including the new iPad Pro, iPhone XR, iPhone XS, Apple Watch Series 4 and Apple's line up of Beats headphones, according to several reports. The deal will go into effect later this year and includes the U.S., U.K., France, Germany, Italy, Spain, Japan and India.
- Many Apple products are not available on Amazon currently, or are sold through Amazon's third-party marketplace at various conditions and prices. Under the new deal, only Apple-authorized resellers will be allowed to sell Apple and Beats products on the Amazon marketplace. Listings for new and used Apple products on Amazon will be removed after Jan. 4, and sellers will have to apply with Apple to become an authorized seller.
- The deal does not include the sale of Apple's HomePod smart speaker, which is a competitor of Amazon's Echo devices. Amazon also doesn't list Google Home speakers. The agreement with Apple also doesn't affect the Renewed program, which sells certified refurbished electronics.
Amazon and Apple teaming up could be a win-win for both companies looking to drive sales around the holidays, as electronics are often popular gift items. It also points to the ongoing commodification of smartphones. Apple is selling fewer iPhones these days as the market matures and even though the company is betting that software and service sales — as well as higher priced iPhones — will continue to drive revenue growth, getting its hardware into more consumers' hands through Amazon won't hurt. Apple customers are known to be loyal and the deal provides them with added convenience if they know are purchasing authorized items. It could also attract new customers, who might then sign up for some of Apple's services.
Amazon's Q3 2018 net sales grew 29% to $56.6 billion, up from $43.7 billion in the year-ago quarter. But, the company's sales were slightly lower than expected, which company execs said is "slightly worrying." The slowdown comes as consumers may be less likely to turn to Amazon in a good economy and Amazon's growing number of competitors, so the Apple deal could give the site a sales boost given the popularity of Apple devices. Amazon reported $2.5 billion in revenue it its "other" category, which mostly consists of advertising, a 123% jump.
The deal will help Amazon and Apple better police inventory and pricing of Apple products on the site, which could also protect consumers. Amazon has been working to improve its marketplace by making it more difficult for small sellers to list products without working directly with brands. Amazon has a similar partnership with Nike that helped both companies reduce counterfeit items on Amazon and gives both brands more control over the sale of Nike products on the site, according to CNET.