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Thursday, January 24, 2013, 03:22 pm PT (06:22 pm ET)

Apple's record profits contrasted with Amazon's hopes to turn a profit

Apple's profits for fiscal 2012 reached above $40 billion, making it the only tech company to ever reach that benchmark. In fact, it's a feat only ever matched by oil giant Exxon Mobil.

Apple's financial performance invites comparisons with other companies such as Amazon, which has taunted the iPad maker with a rival business plan oriented around ad and content sales, rather than seeking to earn profits primarily on hardware.

A report by Bloomberg writer Mark Gimein contrasted the two companies, noting that while Apple reported quarterly earnings of $13.5 billion this winter, Amazon has only reported a total of $5 billion in earnings spanning from 2003, the first year it turned a profit, through the end of 2011, the full last year it has reported earnings.

In the previous quarter, Amazon actually lost $274 million, but Gimein states the company is "expected to turn a profit" for 2012.

"By conventional metrics," Gimein writes, "Amazon’s earning are so low that it’s almost senseless to talk about them."

He added, "Apple makes so much money that investors are leery of whether it can continue growing. In stark contrast, Amazon has made so little that, paradoxically, it continues to hold out the prospect of limitless growth."

Amazon has been around since 1997. Its Kindle-branded tablet efforts long predated the iPad, having been introduced in late 2007. But its two year lead in tablet-sized mobile devices, followed by three years of direct competition with the iPad, haven't come anywhere close to matching Apple's performance in mobile hardware. Amazon won't report how many Kindles have sold, but its tablet business isn't resulting in Apple-style profits.

Money from content?

Amazon embarked upon an effort to undercut Apple's iTunes song sales with its own discounted MP3 store in late 2007. Five years later, Amazon still has a relatively small music business limited to nine countries, compared to Apple's world leading online music store now available in 119 countries.

Two years ago, Amazon fractured Google's Amazon tablet platform to introduce a rival to Apple's iOS App Store with the same branding, in order to sell software content to a series of Android-based devices. However, it has not been able to consistently turn a profit doing so. Amazon operates in six countries; Apple's App Store is available in 155.

Apple reported $2.1 billion in revenues from iTunes in the winter quarter, but the company has regularly described its iTunes-related online services as designed to operate as an enhancement to its hardware business, without needing to turning a significant profit. Amazon isn't turning a significant profit on content sales either, but it's also not profiting from hardware.

That calls into question the widely held hope that advertising and content sales will be able to fund competitive efforts to develop mobile products to rival the iPod, iPhone and iPad, whether those efforts involve Android or not.

Amazon is scheduled to report its winter quarter results Tuesday January 29.