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Summary:

Amazon has announced a new Kindle. The new device is pretty awesome, both in features and price. It’s important that we declare both devices as winners and set some things straight for anyone calling iPad a Kindle killer or the other way around.

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Amazon has announced a new Kindle that most bloggers are calling Kindle 3. The new device seems pretty awesome, both in features and price. It’s important that we declare both devices as winners in their own right and set some things straight for anyone calling iPad a Kindle killer or the other way around.

Kindle as a service

Kindle is a service that allows consumers to buy books from anywhere in the world as long as there is an Internet connection. Books can be purchased via any device with a modern web browser and you can read those books on any device that supports Kindle software like your Mac, PC, iPhone, iPad, Android and Amazon’s own Kindle hardware.

[inline-ad align="right"]Amazon’s strategy is different from Apple’s. Apple developed the iTunes Store as a service to drive the sales of its hardware. Kindle software and hardware was created to drive the sale of books and other downloadable content. Kindle is huge for Amazon because going digital isn’t just convenient to the consumer. It’s great for Amazon because it doesn’t have to keep a stock of books and worry about paying to ship those books and the consumer wins by having that book accessible across multiple devices instantly. All Amazon has to do is ensure its selection of books is higher and its price is lower than the competition.

Kindle and iPad finally coexisting

Until today’s announcement, Kindle as a device was scrutinized against the Apple iPad, because while you could read books on both, the iPad was only $150 more than the smaller Kindle and a few bucks more than the larger Kindle DX.

Amazon aggressively slashed prices on the device in a way that made everyone think they were just being defensive and fearful of iPad but today, that all changed.

Kindle 3 is priced at $139 (Wi-Fi only) and an International version with 3G is only $189 (3G via GSM). TechCrunch Reports:

In addition to the price and screen change, the redesigned body is 21% smaller and 15% lighter, down to about 8.5oz. If their press release is to be believed, it’s also got twice the storage (4GB) and significantly improved battery life over the old Kindle.

Kindle is priced so aggressively that true book lovers can buy the new Kindle at a price that’s simply a no brainer considering that Kindle books cost considerably less than real books and you’re saving on shipping and the pesky 3-7 days it takes for a book to arrive at your door. No longer is there a decision to make between buying a Kindle device or simply paying $150 more and having an iPad that does books and so much more.

Amazon is finally showing the industry that it doesn’t want to make millions selling Kindles. It’s about the sale of digital books.

Apple and Amazon are both winners

When you’re just talking hardware, Apple will continue to sell millions of iPads to people who want books, games, movies, apps and the web and the Kindle will continue to sell in the millions for book lovers. This is a huge win for consumers because our decision is made for us and bloggers can stop comparing both devices like they’re the same. I’ll be buying a Kindle for my sister who reads books every day and an Amazon gift card so she can buy a few books to get started. It’s a much easier gift than paying $499 for an iPad that she’ll mostly be using for books, anyway.

So who are the losers?

Basically, everyone that’s not Apple or Amazon. For now and the foreseeable future, Amazon has done a phenomenal job getting Kindle on millions of computers, phones and other handheld devices. Its goal of selling books by the truck load is working well as it just announced Kindle books are now outselling physical books after only three years. The losers are Barnes & Noble’s Nook, Sony’s E-Reader, and any other devices that don’t either work with Amazon or have their own book store. B&N has a fighting chance but Amazon’s user base of passionate book buyers will stay true to Amazon and Apple has over 100 million accounts with credit cards who will dive right in to iBooks. Sorry, but it’s clear who the winners are in the digital book sales space.

What about iBooks?

Amazon and Apple may not be competing when it comes to Kindle hardware versus iPad but they’re still competing in the book sales space. I’ve been meaning to write this for a while but I won’t buy a book via iBooks outside of the free section. The reason is that Apple hasn’t convinced me that my digital DRMed books are safe with them. In the same way that my iTunes movies and music (prior to iTunes Plus) are not playable on other hardware other than Apple’s. Amazon has displayed the right strategy that any device or platform that comes out in the future will eventually get Kindle software and those digital books I bought in 2007 will sync to that device without fail and Amazon is a large company that I trust. iBooks may win me over eventually but for price, selection and compatibility, Kindle (the service) has me hooked.

Kindle versus iPad is a dead argument. You’re both winners. No one is arguing the iPad isn’t better hardware for much more than books but that comes at a price and, even on the iPad, Kindle is just one tap away via its own app.

Related GigaOM Pro Content (subscription required): Evolution of the e-Book Market

  1. I would really love to get some hands on time with the new Kindle. I have tried the iPad and love it but it is kind of expensive for me at the moment. I have tried the Nook and found it to be somewhat lacking (having to use buttons to select and choose items on a touchscreen instead of just touching the item you want is just bad interface design). I have seen Kindle’s at Target but they didn’t have any functioning display units. I really need to spend a few minutes playing around with something like this before I decide to drop the cash on it.

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  2. Great article Adam. Pretty much someone like me gets broader understanding with tech which is not so so my strong suit. Good job!

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  3. Only problem with digital readers is how limited the stores are. Try finding Dürrenmatt or Barthelme in an eBook store.

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  4. I hope they drop the price on the DX by having a wifi-only version, but I’m guessing they want to hit the high-end of the market.

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  5. I really want the new Kindle, even though I already have a Nook.

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  6. Great article and analysis. It’s nice to see two leading companies compete and effectively cooperate on their own strengths.

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  7. Christina Dennis Thursday, July 29, 2010

    I really want the Wi-Fi Kindle even though I have and love my iPad. The biggest negatives of the iPad are the glare on the screen which makes it difficult to read text at times, and you can’t use it outside in extremely hot weather. My iPad crashed while I was reading on my deck when the temperature was about 98 degrees and the sun was intense.

    Do you think the Wi-Fi price will eventually drop even lower? Someone else said that $90.00 is the “sweet spot” for the Wi-Fi version. Thoughts?

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  8. A store’s fidelity is the exact reason I chose iBooks over Kindle. In it’s very long history, Apple has never pulled content, apps, or books from customer’s devices. That Amazon actually did this speaks volumes. Maybe next time there won’t be enough outrage in the press and they will get away with it.

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    1. yeah but they did have censorship. do some research and see for yourself. they also control what you put on your own device so i am not sure apple is much better…

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    2. Amazon’s actions re: the recall of “1984″ were certainly a boneheaded mistake, but their CEO also gave one of the most forthright apologies for it I’ve seen from a major corporation, admitting fault and calling their actions “stupid, thoughtless, and painfully out of line with our principles.” They changed their customer terms of service to guarantee a non-exclusive right to a permanent copy and to protect the user against any remote content deletion unless they consent to it, request it (i.e. as part of a refund) or if the book has harmful or malicious code.

      I held off on getting a Kindle until this happened, at which point I felt comfortable enough with my ownership rights to proceed. Then again, I also buy things from Apple’s App Store even though they still retain the ability to remotely delete apps, so I guess I’m not being entirely consistent…

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  9. I enjoyed your thoughtful write up. However, if the Kindle’s winning point is the vast selection of ebooks available from Amazon made accessed through their Kindle/Whispersync program, the iPad would trump the Kindle reader as the program is also available on the iPad (as you mentioned).

    I totally agree that they’re both winners in their own right. I think a person looking to decide between an iPad vs a Kindle will ultimately decide which to get based on the weight and feel of the device (iPads being heavier with screens that have glare, while Kindles are lighter with no glare, but no colour or a good enough backlight to read in the dark with as well). Additionally, the fact that the 3G international download bandwidth is included as part of the Kindle package is an added plus in its favour. This is not possible with the iPad since, depending on the user, it could potentially demand a huge bandwidth for media downloads.

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  10. It is refreshing to one company not trying to create an “iPad killer”. I wish others would do the same: have a unique product to offer instead of copying Apple;

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  11. “Kindle books are now outselling physical books”

    This is not right. Kindle books are outselling **hard cover** books only.

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  12. Tom Loughlin Friday, July 30, 2010

    “Amazon is a large company I trust.” Have we already forgotten the Orwellian debacle wherein Amazon reached into millions of Kindles worldwide unbeknownst to their owners and erased puchased copies of “1984″ without the owners’ permission? Trustworthy? Not in my ebook. It doesn’t mean I wouldn’t buy a Kindle. But it does mean that they are no more trustworthy than any large corporation in this country.

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    1. Adam Jackson Friday, July 30, 2010

      Nope, I haven’t forgotten about that but Apple has done far worse things with our data only beaten out by Google and Microsoft.

      I’ll save my “examples” for another article but Amazon has done the least of any other company.

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    2. I’ve already commented above in regards to another poster, but I’ll more or less repeat my reply here: I think it’s important to consider Amazon’s RESPONSE to the issue when making a decision. Amazon’s CEO Jeff Bezos admitted what the company did was “stupid” and “thoughtless,” and said they’d make efforts to ensure this doesn’t (and can’t) happen again. To this effect, they’ve changed the terms of service to guarantee the user a non-exclusive right to a permanent copy of what they purchase. They’ve added a clause that says they can’t remotely delete or modify purchased content unless the user consents/requests, if they’re legally obligated to by judicial order, or if the material contains malicious code. And they offered to return the deleted material or give owners a $30 gift certificate or cheque for $30.

      It’s that kind of response that DOES make me trust Amazon more, however slightly, than any other large corporation. Only time will tell if they repeat their crass mistake again. I hope they don’t, but anything can happen.

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  13. Amazon choose the right strategy. There is no way they would have been able to compete with the iPad and android tablets coming to market.

    This strategy allows them to still have strong kindle sales and have a profitable presence on tablets.

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  14. Agreed. The iPad is just too feature-rich to be a great reading device. Too easy to get distracted with other things. The Kindle and the Nook are, in that sense, elegant in their simplicity and dedicated functionality.

    Encouraging price, but these things will be less then $100 soon. That should be a major tipping point. Thus, rabid readers like me continue to hold off (yeah, I just ordered a few physical books on Amazon this morning.)

    What I can envision happening at some point is that you buy a $250 Amazon or B&N gift card and they just throw in an ereader.

    Makes sense, right? People feel like they’re getting a great deal, they get addicted to ebooks, and the sellers have a customer for life. Will be surprised if we don’t see promotions like this before the end of 2011.

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    1. Adam Jackson Friday, July 30, 2010

      Great idea Jim. Yep, amazon will make it back in the savings of selling digital books that don’t require storage or shipping costs.

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  15. This is really an unfair article. I’m a huge apple fan, but clearly the winner here would be the iPad, because you can get the B&N, Borders, iBook and Kindle apps all on one device.

    In terms of the Kindle, what people fail to realize is that you are stuck buying from Amazon. I have a nook and I can buy from B&N, Borders, Kobo Books, Baen books, Smashwords, ebooks.net, etc. I can also borrow ebooks from the local library, something the Kindle cannot do as well. The Kindle lacks a removable battery, so you cannot change them out if you wish. Nook’s OS is Android-based, so it’s easy to tweak (I feel like a traitor even saying that here), and that’s a nice feature to have.
    I did a lot of research when I considered my first e-reader, including the iPad. The Nook won hands down based on it’s openness alone. The Kindle is far too proprietary. Sounds like another company we know and love…

    So no, I don’t see it as clear who the winner is. I think the jury is still out. I also don’t see the price slash on the Kindle with wifi as an answer to the price difference between it and the iPad; they are completely different niche markets. This was clearly a sales strategy aimed at the Nook and Kobo. The one advantage Amazon has here is that everyone knows what a Kindle is. The nook is only 6 months old, but B&N is a major bookseller. Who hasn’t purchased from their neighborhood B&N? You give it time to pick up speed and I guarantee that your next article will read a little differently.

    And btw, ebook from iBooks are expensive! No thanks.

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    1. I agree with Jennifer 110%.

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    2. Right on jennifer. Additionaly there is another major point being ignored. People will not be owning an ereader and a tablet like the iPad. When I get on a plane I’m only bringing one or the other. I read tons, but my content is very diverse and a lot of it is in apps like Instapaper or magazines like zinio. The iPad is a convergence device that gives me everything in a similar form factor to an ereader.

      Ereaders are cool but they wont be around in 5 years. It’s an intermediary tech.

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      1. The iPad is not a “Kindle Killer” because the Kindle is, by design, set to self-destruct. For Jeff Bezos and Amazon, “It’s about the economy of electronic content, stupid!” I am convinced he realized all along that Apple and others would inevitably incorporate and dominate the ebook’s physical form factor in ONE ubiquitous device. In any event, both Bezos and Steve Jobs are worthy succesors to Gutenberg.

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    3. Maybe I can point out (without sounding too defensive) that Barnes & Noble Nook software isn’t available on as many platforms as Kindle. As a service, Kindle is winning. As a hardware unit that also has iPad integration, Nook is doing quite well but faring much worse than the Kindle.

      I also didn’t get into the issue of selection. iBooks titles are expensive, Kindle has the most books and Nook doesn’t. I hope that better explains things.

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      1. The B&N reader software (or nook software you’re referring to) is available on iPad, PC, Mac OSX, iPhone OS, iPod Touch, BlackBerry & Android Devices. What platform is it not available on that you need?

        Let’s not also forget that Nook has a Try Before You buy for EVERY ebook available and the LendMe feature, which yes, is more of a gimmick at this point, but is still a nice feature to have nonetheless. Kindle is the big dog here, but only because it’s been around for a long time. As more people realize the additional features and flexibility they get with the Nook, they’ll switch. Some already have.

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      2. There are over a million titles available for the Nook, generally cheaper than on the Ipad and Kindle. You can also check out new ebooks from the library for free on the Nook. I don’t think selection is a problem for the Nook, and I don’t see that they are a loser. There are a lot of people who support B and N and I think you will see it gather more support for the hardware and the apps, whatever platform it may be on.

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    4. You can email or copy books on to your Kindle so you are not “stuck” buying from Amazon.

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    5. Nice post! I like open products, especially if you can read books that you already own on them. ePub is my format of choice..can the nook ready them?

      Currently my eReaders are my iPhone(Stanza) and Netbook(PDF reader/Calibre )
      Selection isn’t important if you only read free ePub formatted titles.

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  16. Actually the Nook is selling pretty well, and yes they have an app. So not so sure it is a loser…and it is not trying to compete against the ipad.

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  17. I dislike Amazon’s policy regarding the ownership of my books. They’re DRMed, and the license agreement has some horrible points about Amazon being able to remotely kill all of my books, which actually aren’t mine, they just allow me to read them. Apple’s policy isn’t worse than Amazon’s!

    Also, by 2010, Amazon should have figured out that people like color screens. The Kindle has no book covers, no colorful illustrations, just plain text. And by text, I mean black on white text, not nicely colored text on a nice paper texture. I’m not saying the Kindle is bad, but it just doesn’t appeal to me at all.

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    1. well i think that some people want a device that reads like a book: black and white. That is the whole point of the Kindle and Nook. They are electronic readers. Pure and simple. They aren’t even trying to compete directly with the iPad.

      Most real readers, don’t buy a book for the covers or in most cases for the illustrations. (there are some exceptions if it is done for art or childrens books) The e readers are for people who want to do ONE thing well, read.
      The iPad is for browsing the web. Ask most people what they get an ereader for and they will tell you it is for reading. Ask most people what they get an ipad for and it is not for reading, but other things like browsing the web and watching movies…

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    2. How many books have you seen that have coloured text??

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  18. Can you listen to books on IPAD like you can on Kindle?

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    1. Can you say that again? I did not hear you.

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  19. Excellent article, helps me understand the strong points of ipad and kindle

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