Revolutionary, Not Just Evolutionary

Diane is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

It’s good to be the king, and Amazon (NASDAQ: AMZN) is the undisputed retail king of the Internet jungle. What’s more, the regal retail giant has big plans for expanding its reign beyond the web.

This e-commerce powerhouse not long ago was simply the online go-to place for books, music, health and beauty products, and small electronics. Over the years, it has morphed into the leading place for a bevy of small and big ticket items. Its robust rise and stellar success has put one-time cynics to shame and turned them into true believers of the company's prowess.  Furthermore, the internet behemoth is showing no signs of slowing down.

This Seattle, Washington based company is the world’s largest online retailer and was just crowned again, for the eighth consecutive year, as the best online retail experience.  Amazon continues to draw customers away from traditional bricks-and-mortar shops, department stores, specialty boutiques, and discount outlets. The ease and comfort of privately shopping from home, at the office, or on the go; not to mention the site's competitive and hard-to-beat prices, continues to lure shoppers in droves. Amazon’s easy to navigate website, simplistic checkout, and free and swift shipping options are other invaluable perks.

Since adding a cache of large electronic offerings such as big-screen TV’s, Amazon’s rise in this area has been attributed to the near demise of rival Best Buy (NYSE: BBY), which owns a respectable 19% of the specialty consumer electronic market in the U.S, but is struggling to stay afloat thanks to Amazon's alluring and growing presence in this arena. Best Buy has attempted to go private, but that looks iffy at best right now. Its stock's steady decline and troubling future make this one stock best to avoid.

Meanwhile, Amazon is becoming a singular, one-stop shop as moves to deliver goods in just one day, with the addition of distribution centers in San Francisco, Indiana, New Jersey, South Carolina, Tennessee and Virginia. The shift will thrust Amazon into the ranks of a real dominant retailer.

The company roared into e-reader market with its hugely successful e-reader, the Kindle. It launched did much more than simply ruffle its rival Barnes and Noble’s (NYSE: BKS) Nook.

Barnes and Noble's shares have had a less than noble showing of late with plenty of concerns roused about this once dominant player's position in the retail book industry, a segment that is fading fast. It doesn't take much reading to recognize Barnes and Nobles' days may be numbered. The NYC based company recently reported revenue at its consumer stores dropped 10.9% during the crucial 2012 holiday season. Plus, revenue for its Nook segment fell 12.6% during the same period.

Meanwhile, Kindle was the best-selling eBook reader in 2012, thanks to its lighter weight, better battery life, and greater storage capacity than challengers.  As Nook users continue to deal with and complain about interface and other technical issues, Amazon’s Kindle looks perfectly poised to retain its top spot in the arena.

Kindle’s e-books now outsell print books on Amazon, a trend that took hold in 2011 and continues to gain traction. The frenzy over the best-selling, steamy and provocative “50 Shades of Grey” series had men and women of all ages downloading the e-books copies at record speed.  While these inquiring and inquisitive readers may have been a tab embarrassed to actually buy a print copy and be caught reading one in public or even at home, the Kindle provided a covert cover.

Amazon also has plans to move faster and further into tablets, a segment growing at a quicker clip than e-readers. Many consumers are finding multi-use tablets, which have come down in price, the better way to go. Amazon's stash of streaming videos, games, music and e-books complement its tablets.

Amazon also has an app store that offers some 60,000 apps that run on mobile phones and devices powered by Google’s Android software. Now comes chatter that Amazon may be set to roll out its own smartphone. 

The company has been testing such a device with its Asian suppliers. A launch could come in 2013, sources familiar with the company have shared in whispers.

An Amazon smartphone would compete with the like of Apple (NASDAQ: AAPL). Apple sold 50.5 million iPhones in the December quarter, up 36% from the same quarter a year ago. But Apple maintains just 35% of the smartphone market, while devices running on the Android operating system command the lion's share with 53.7%.

Amazon could take a juicy bite out of Apple’s presence in this fruitful arena by offering a low-cost device that is privy to Amazon’s myriad on-line e-books, games, streaming media offerings, shopping experiences, apps and more, in addition to one run that runs on the most dominant operating system.

And in a nod to Amazon's prowess, it just won a lawsuit filed by Apple over using the name Appstore. Apple claimed it infringed on its trademark App Store, but a judge disagreed and ruled in Amazon's favor.

Amazon prospects look amazingly alluring. The company keeps changing and growing. Amazon is not simply evolutionary, it’s revolutionary.



DianeAlter has no position in any stocks mentioned. The Motley Fool recommends and Apple. The Motley Fool owns shares of and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

blog comments powered by Disqus