And yet, last I checked, a lot of companies made serious money in retail, but very few companies managed to earn substantial profits in smartphones, tablets and notebooks.
I seems to be harder to compete with Apple than most investors think it is. (I say that as a developer who hopes that an open platform will win the smartphone wars.)
Consider a site like NewEgg. At ~250M annual revenue they're an appreciable fraction of Amazon's size with a lot of catalog overlap. Certainly for commodotized consumer electronics they are direct competitors.
I think the difference the author is trying to articulate is that NewEgg's overlap with Amazon (for example) is considerably less impactful on Amazon than, say, Samsung's overlap with Apple. Phones and tablets are a huge proportion of Apple's profit generation - an area where they cannot afford to be dethroned. With Amazon and consumer electronics, having NewEgg overtake more of their sales in that area would hurt, but Amazon has such a vast catalog that the company, investors, and stockholders know they'll soldier on in a variety of other markets.
That's Amazon's power. Apple's no one-trick pony but they are a pony with a countably limited number of tricks. Amazon is a platform for selling anything and everything. They've abstracted out their distribution network to adapt to selling the Next Big Thing before it's even been conceived. Competitors can take a swipe at a chunk of their market but at the end of the day they're in so many markets that it's a truly monumental task to dethrone Amazon in any meaningful way.
Now, if you could say that incumbents attacking Amazon's base stole serious revenue from Amazon that would be something. But what does it mean to say WalMart makes serious money in retail, ergo it is easy to compete against Amazon?
If you define it as general retail (who manages to capture the consumer dollar), then Walmart and its physical stores can be considered a competitor.
If you take the article's concept: "build a massive online database and offline infrastructure to transport boxes from warehouses to hundreds of millions of doorsteps.", then clearly stores aren't competing with Amazon.
In many places, suburbs and cities alike, people don't want stuff delivered to their doorstep. The existence of Amazon Lockers is proof enough of this - sotres now offer online shopping with local pickup (Best Buy, Staples, and IIRC Wal-Mart). This competes with Amazon.
Wal-Mart is also attempting to reposition itself as an Amazon alternative (i.e., pure online shopping) and has the capital and existing supply chain infrastructure to do so (they are one of very few).
On top of that Amazon continues to struggle with specialty goods. Amazon is very, very effective at selling mass-market products, but their attempts to move upmarket have been extremely mixed. Lower-volume, premium goods are not their forte, and brick and mortar stores (as well as niche online shops) still have a firm grip on that.
Not to mention we know that the public is extremely price-sensitive. Amazon continues to price-compete with Wal-Mart, despite its substantially lower volume, leading to even thinner margins. They do this out of necessity, because at this point for many people the conveniences of online do not trump a quick trip to Wal-Mart if the product is cheaper.
I don't think it's at all prudent to discount pure brick and mortar businesses as competitors to Amazon. Amazon very much exists in the same sphere as all retailers, online and off.
I guess I don't see it that way, but reflecting I guess my view is distorted.
In general it is true that Amazon has a high threat of substitutes. I think what @silverstorm, and this article, are trying to say is that rivalry for Amazon is pretty low, given how expansive their business is.
[1] http://en.wikipedia.org/wiki/Porter_five_forces_analysis
Certainly Walmart believes they are competing with Amazon. (I would have bought my patio furniture there, too, if they hadn't sold out. Instead I bought it on Target.com.)
This was all said in the article I think but I'm just trying to rephrase it.
But yes, as Microsoft demonstrates competition in this sector doesn't always go by the book. Because it really isn't such a free market with non-captive consumers.