A M A Z O N : A N O B J E C T I V E C A S E S T U D YC H A R L E S A R T H U R

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A M A Z O N : A N O B J E C T I V E C A S E S T U D YC H A R L E S A R T H U R

About me:

Technology journalist - The Guardian (2005-2014), The Independent (1995-2004)

Author: “Digital Wars: Apple, Google, Microsoft and the Battle for the Internet”

This report has been prepared on the basis of the limitations set out in the engagement letter and the matters noted in the Important Notice From Deloitte on page 1.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London, EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom member firm of DTTL.

© 2012 Deloitte LLP

Study of the UK petroleum retail market. A Final Report for DECC

14 December 2012

C A L A M I T O U S !

D I S A S T R O U S !

This report has been prepared on the basis of the limitations set out in the engagement letter and the matters noted in the Important Notice From Deloitte on page 1.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London, EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom member firm of DTTL.

© 2012 Deloitte LLP

Study of the UK petroleum retail market. A Final Report for DECC

14 December 2012

A M A Z O N D O E S N ’ T S E L L P E T R O L

(Petrol filling stations)

A M A Z O N D O E S N ’ T R U N P U B S *

W H AT ’ S C A U S I N G W H AT ?

A M A Z O N H A S T R O U B L E T O O

• Amazon might not be the cause of all the problems in the book industry. (Depending what you think those problems are.)

• In fact Amazon has its own problems.

M E D I A S A L E S G R O W T H : S L O W I N G

K I N D L E U P TA K E H A S S TA L L E D

E B O O K S H AV E T H E I R U S E S

• Median reading 5 books per year (4 for men, 6 for women)

• “mean” is 10 and 14 - so more women read more books

A M A Z O N : A M B I T I O U S I N H A R D W A R E

tablet

smartphone

Kindle

Echo, Dash..

S TA L L I N G S A L E S M E A N S . .

S TA L L I N G S A L E S M E A N S . .

T H E F I R E P H O N E : B I G A M B I T I O N

T H E F I R E P H O N E : B I G A M B I T I O N

TA B L E T S S O L D P O O R LY

Total sold: about 30m

T I M E F O R T H E G O O D N E W S

K I N D L E S E L F P U B L I S H I N G !

• Yes, it’s full of rubbish

• It’s the world’s biggest slush pile

• But with one key advantage…

O T H E R S R E A D I T F O R Y O U

• They find what they like

• It’s democratic

• It produces best-sellers that turn into films

• Like this:

T I M E F O R T H E B A D N E W S ( P E R H A P S )

• Amazon focuses on “free cash flow”

• “the cash a company is able to generate after laying out the money required to maintain or expand its asset base.”

• “Earnings can often be clouded by accounting gimmicks, but it's tougher to fake cash flow”

‘ F R E E C A S H F L O W ’ V W A L L S T

Q U E S T I O N S A R E C O M I N G

C O N C L U S I O N S

• Amazon’s media sales growth is slowing down

• Ebooks and e-readers have a natural sales ceiling

• Amazon doesn’t dominate in hardware

• Ebooks bring possibilities

• Wall St may start questioning Amazon’s accounting

C H A R L E S A R T H U R

T H A N K Y O U