The battle between Apple

Much has been written on the battle between Apple and Amazon.com . Undoubtedly Steve Jobs' passing has made us all reflect, and like as not on a much deeper level than previously, on the man and the empire he created.

In many ways, the companies are more alike than they are different. What makes them both remarkable players is their ability to take the long view. Their business strategies focus on what clients will want a decade from now, not just then holiday season. Because they look at the future this way, both companies are comfortable breaking big rules along the way. And to date, they've both delivered, in ways that have exceeded even what their biggest supporters expected. Which is like as not what makes this then round of battle most interesting.

Apple's strategy has been to focus on a specific type of consumer: one who is comfortable with a higher price point, is keen on sleek design, and is drawn to an integrated software/hardware solution that's easy even for your mother to use. Not to mention that along the way Apple built a brand cachet that started with its "Think Different" campaign and remains unmatched today. All of this means that Apple might be losing the bottom 30% of the market. However does Apple care? Recent figures confirm that Apple is capturing more than 50% of the profits with just 5% of the computer market. Straightway quarter's projections have it snapping up furthermore, with 60%. And that's without even trying to account for the value of Apple's extended ecosystem.

How will the Kindle Fire launch affect Apple's 80% share in the tablet market -- and could it eventually only help to spur interest in the iPad? On short notice, Amazon will face big losses -- as much as $20 per tablet -- however the move will spur sales and help win over the low-end segment of market. It's a gamble, yet one Amazon is smart to make if it wants to compete with the iPad -- and startups like Spotify -- on music and movie downloads.

Build it and they will come As Apple builds out its iCloud and Amazon continues to expand Amazon Web Services, and as both companies secure customer loyalty within their respective clouds, this is where the real war will be fought. The real value in the hardware lies in its ability to connect the consumer to a cloud-services world worth living and working in. The war will be won by the company that continues to evolve, innovate, and personalize those services, making them so useful, delightful, and entertaining that the consumer won't dream of leaving. Think of a small business that builds its sales database, calendaring, and accounting program within a cloud that as well holds birthdays, favorite restaurants, music and photos -- a network on top of a network, all interconnected.

How to turn that loyalty into revenue

Now consider how to turn that loyalty into revenue. The ongoing lifetime value of each consumer is directly related to the volume of digital content and services he or she consumes -- and consumers who buy on a recurring basis have the power to boost the bottom line in dramatic ways. Getting a loyal customer to sign up for a recurring subscription, or renew an existing one, for instance, is much easier than luring a brand-new customer if done right. The company that takes better care of its current customer base now, even marginally, will, I believe, have the upper hand.

History tells us that there's only room for three to four players in mature markets, and two healthily duking it out for the leadership position -- spurring technology with each new release and each new customer acquisition. Amazon will continue its relentless effort to disrupt entire industries, and Apple will always focus on expanding the boundaries of what's possible in the mobile, entertainment, and computing worlds. Thanks to the foundation both companies have worked tirelessly to build, the best is probably but to come.