Amazon.com, Inc. (AMZN - Analyst Report) recently announced that its Cloud Player can now stream music wirelessly through Ford Motors Co.’s (F - Analyst Report) SYNC Applink-equipped vehicles.
Owners of Ford automobiles can enjoy music wirelessly by downloading the Amazon MP3 app on their Android smartphone devices, powered by Google Inc.’s OS. The owners of the 2013 Ford Fiesta, Mustang, Focus, E-Series, C-MAX Hybrid, Expedition, Fusion, F-150 and Super Duty models can enjoy music from the Cloud Player music library in their vehicles.
Amazon’s Cloud Player is a web storage application, which allows people to listen to music from any computer or Android device with Internet access. It allows streaming on devices such as Kindle Fire, Apple Inc.’s (AAPL - Analyst Report) iPhone, iPod Touch, Mac and PCs. Amazon does not share the exact numbers, but the Cloud Player has apparently roped in millions of users since its launch in early 2011.
Amazon has been offering its Cloud Player on Sonos home entertainment systems, Roku streaming players and Samsung smart TVs. Further, it has extended its reach to Apple’s smart devices.
Thus, Amazon’s strategy of widening its reach is quite smart. It is hoping to add more users to the Amazon cloud and drive the sale of Amazon’s other digital goods. Therefore, while iTunes still leads in the segment, Amazon’s tactics could help the company gain larger market share.
Amazon is now following Apple’s model, as it does not charge anything annually, but only for what users download. A song costs around 99 cents in the iTunes store, but is available for playback on any iCloud registered device at no extra cost.
In the fourth quarter of fiscal 2012, Amazon reported revenues of $21.3 billion, up 54.0% sequentially and 22.0% from the year-ago quarter. This was in line with the guidance for the quarter of $20.3–22.8 billion (up 55.7% sequentially, or up 23.3% year over year at the mid-point), although short of our expectations. Year-over-year revenue growth was 23% excluding unfavorable currency impact.
Amazon is one of the leading players in the extremely fast-growing retail ecommerce market. While the strong growth prospects are making the market more competitive by the day, Amazon continues to maintain and even grow its share on the back of its consistent and reliable service. Amazon’s scale of offerings, its broad reach and platform approach are the keys to its success.
Amazon has a Zacks Rank #3 (Hold).