Amazon achieved prominence through its expansive e-commerce business, emerging as the largest digital retailer both in the United States and globally.
In the realm of e-commerce, Amazon has risen to prominence, establishing itself as the foremost digital retailer not only in the United States but also globally.
Amazon Explores New Horizons
However, a significant aspect of the company’s success lies in its willingness to diversify its business ventures.
Prime examples of this include its ventures into cloud computing and digital advertising. Although not all endeavors have yielded favorable results, Amazon’s track record has instilled fear in its potential rivals. This well-documented phenomenon, known as the Amazon effect, often leads to a decline in stock prices merely upon the prospect of competing with the company.
Currently, it appears that Amazon has set its sights on the wireless industry, which could pose challenges for industry giants such as AT&T, Verizon Communications, and T-Mobile.
Surpassing 200 Million Members Worldwide
Historically, Amazon has kept information regarding its Prime subscribers relatively confidential, occasionally revealing new benchmark figures.
The most recent disclosure occurred in early 2021, when former CEO Jeff Bezos announced that Prime membership had surpassed 200 million worldwide.
While specific details have not been provided by Amazon, estimates indicate that the company likely has approximately 167 million Prime members in the United States, as indicated by data from Consumer Intelligence Research Partners. If this approximation is even remotely accurate, it encompasses roughly half of the U.S. population of 334 million.
Given the extensive reach of Amazon, it is evident that its entry into the wireless industry could pose challenges for the largest carriers in the United States. Undoubtedly, some wireless subscribers would abandon the expensive and profitable plans offered by Verizon, AT&T, and others in favor of a more affordable plan provided by Amazon.
Such a shift would undoubtedly impact profit margins, which are already under pressure due to intense competition.
If Amazon indeed intends to offer low-cost wireless services to its subscribers, it would further solidify the loyalty of its customer base. This consideration holds great significance because Prime members are among Amazon’s most valuable customers.
On average, these members spend $1,400 per year, while non-members spend only $600 annually. Therefore, Amazon has a vested interest in providing benefits that discourage subscribers from canceling their memberships. Once Prime members have paid the annual fee of $139, they aim to maximize their investment, leading to higher levels of expenditure.
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