Amazon tests video calls to verify third-party sellers

Amazon is taking new steps to verify third-party sellers; e-commerce giant is testing the use of video calls to validate the sellers’ identity. Yahoo Finance’s Tech Editor Dan Howley breaks down the details. Howley also discusses Apple's potential plans to delay production on its newest iPhone.

Video Transcript

BRIAN SOZZI: Switching gears, Amazon is taking new steps to verify third party sellers. The e-commerce giant is testing the use of video calls to validate the seller's identity. Yahoo Finance tech editor Dan Howley joins us now to break it down. Dan, why wasn't Amazon doing this before?

DAN HOWLEY: I think they really just wanted kind of face-to-face interactions rather than a video interaction, but now that COVID has, obviously, everyone homebound, or at least preventing people from being able to meet in person, they're doing this video style. They had been piloting this before. They were using it in months prior, so this is something that they're continuing to use, and it's basically a way for them to vet sellers that are using the platform-- third-party sellers-- to ensure that what they're actually offering are legitimate products.

Now we've seen, obviously, investigations by various outlets showing-- I think particularly "The Wall Street Journal"-- showed that they were offering some unsafe items, particularly children's toys with lead-based paint. There's obviously been an issue as well with the likes of Apple and Nike taking issue with the fact that there are fraudulent products sold through Amazon bearing their name. So now Nike doesn't even sell through Amazon as result. So this is a way for them to try to make sure that this is all kind of borne out, that they vet the people that are selling through their platform, and they can avoid any unfortunate issues with other companies disputing the fact that they may have fraudulent items or, more importantly, that items themselves are safe.

ALEXIS CHRISTOFOROUS: Hey, I want to switch gears for a minute here, Dan, and talk about Apple. I'm sure you saw this story in "The Wall Street Journal" this morning saying that the company is going to have to push back mass production of its flagship iPhone this year because of the pandemic. How much should investors be worried about that, given the fact that the iPhone makes up such a huge chunk of Apple's revenue?

DAN HOWLEY: It's interesting, because, you know, we've seen reports saying that this was likely to happen for some time now. Most analysts I've spoken to-- particularly Dan Ives at Wedbush basically saying, look. It's more likely than not going to be delayed. We haven't heard anything, though, about the actual launch-- the launch event that they usually have in September. But if there's still lockdowns going on in September, that's not going to happen. And if there's still military hospitals set up in the country, that's probably not going to happen either. They would push it out a little longer.

I think for analysts and investors, this is something, as I said, was expected. The going thought now is, OK. So we push it forward a little bit or back a little bit. That's still gives people enough time to purchase these devices for the important holiday season. And as you go through the iPhone cell cycle, you'll have Q1-- you have the tail end of Q4, and Q2 where a lot of sales really happen. It's really just the end of Q4 there, though, when the new iPhones come out.

So the older phones start to phase out around Q3 and the bulk of Q4, and then we go back into the cycle. So it seems like they would still have the devices on store shelves for the tail-- the very tail end of Q4, Q1, Q2, and then into Q3.

HEIDI CHUNG: Hey, Dan, it's Heidi here. So a pretty busy week for you. We have a lot of those large cap tech names reporting. We just talked about Apple, but I want to get what The Wall Street analysts here are expecting when it comes to Microsoft, Amazon, a couple of those other names that you closely follow.

DAN HOWLEY: Yeah, I think for the likes of Microsoft and Amazon, Google, a lot of what we're going to be talking about is obviously cloud usage. We talked about how AWS had seen a surge. Azure from Microsoft likely saw a surge as well as Google's cloud platform. Any of these cloud companies are really taking a lot of traffic and as a result of so many people working from home and so many operations now having to be done remotely.

So I think we'll hear a lot about that. And don't forget, you know, these companies don't just provide services for businesses as far as B2B work. They also host platforms like Netflix, so they are going to see a ton of increased traffic, and that will probably bode very well for them. But then you have to think, OK, if the economy starts to slow down, Capex spending from companies will start to slow down, and that may translate into these companies saying, look. Down the line, we might not have the kinds of profits that we were expecting as a result of our cloud platforms simply because other companies aren't signing up for new contracts because they just don't have the bandwidth for it right now.

But I think for the coming quarters, we're going to see gangbusters stuff from them. Microsoft, on the other hand, with their hardware side, probably not. And Google as well. I think it's going to be harder for product side at this point.

BRIAN SOZZI: All right, Dan Howley, thanks so much.