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Why The iPad Actually Strengthens Amazon’s Position

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Round 1 goes to Apple (NSDQ: AAPL). The iPad, as expected, has caused a big stir, and given people like Walt Mossberg reason to gush with enthusiasm about the death of laptops. Throughout, as various members of the press have mused about the death of Amazon’s Kindle, I feel compelled to point out that, contrary to popular belief, Amazon is in a better position now than it was before the iPad. That’s right, if Amazon comes out swinging, Round 2 will go to Amazon (NSDQ: AMZN). Here

This article originally appeared in Forrester Research.

26 Responses to “Why The iPad Actually Strengthens Amazon’s Position”

  1. Lynne in Colorado Springs

    You must be reading my mind! I spend hours a day reading on either laptop or desktop and at least an hour or so reading my Kindle. I’ve ordered the 3G version of the iPad to replace the Kindle at home and when I travel. Kindle’s built-in Sprint network access has spoiled me to not being tied to a WiFi hotspot. I LOVE the fact that Kindle books can be read on many different devices. If I buy an iBook from Apple it will only be because Amazon doesn’t offer it. I say: one point each to Amazon and Apple. They’re both winners.

  2. stuwalters

    Great article, and probably one of the better discussions I’ve seen regarding the iPad vs. Kindle.

    If some of the other rumors/discussions are true, Amazon has sold the Kindle at lower than their cost, in order to encourage the sale of ebooks. This is similar to the idea of “give away the razor in order to sell the razor blades”. What this did was truly grow the ebook as a viable product line, as oppossed to it being a simple niche market used by readers like Sony’s.

    I believe that the iPad will continue this growth of the ebook marketplace for Amazon, Barnes & Noble (assuming they can keep up), and the iBook stores. You’re right, in that Amazon will not only survive, but probably thrive in this environment.

    I have personally pre-ordered my iPad (WiFi +3G), purely on the basis of two key uses: 1) as an ebook reader with the iBook & Kindle apps, and 2) as a web browser experience (instead of getting a netbook). Those two uses justified the cost for me, while everything else is just a bonus.

  3. Remember when the music companies forced Apple to drop their 99 cent price structure in favor of variable pricing by putting cheaper music on Amazon? Well, payback is a fickle bitch. The Kindle software will survive, but the hardware is dead.

  4. I don’t understand why these articles don’t state the absolute obvious right off the bat. Black and White e-ink is SO much easier on the eyes. I can read books for hours on the kindle without eye fatigue. It looks like a book. I can’t stand reading on a back-lit display. If you can do color in true e-ink, then great, but mostly I want to be able to read my books without eye fatigue with the ease and convenience that a true e-reader provides. I’ll probably end up buying an ipad, but I won’t use it to read books.

    Perhaps my eyes are more sensitive than most.

  5. celtex

    It’s not Amazon itself that may have a problem, just the don-only-one-thing and in black-and-white only Kindle. Spend a tad more, get a color e-book reader you can surf the internet or watch movies on.

  6. I’m surprised you say “Round 1 goes to Apple”….I would say that Round 1 went to Amazon about a year ago when the Kindle became the first commercially successful e-reader. Round 2 goes to Apple for the iPad, but it seems shortsighted of you to not recognize the success Kindle has had to date. I don’t own either, but everyone I know who has a Kindle (an ever increasing number) swears it has the “Tivo-effect”, i.e. once you own it you can’t understand how you lived without it. However, it will be interesting to see what happens to the Kindle now that the iPad is out, for sure.

  7. Frankly, I was surprised that Apple was so quick to allow the Kindle app into the iPad App store. Good news to for Amazon and consumers. A competitive market is good for all. I am waiting for my 3G iPad to be shipped but plan on using both Apple’s iBook app and Amazon’s Kindle app. I do wish Apple would allow more universal access to iBooks through all your devices including your desktop and iPhone.

  8. Elaine

    I have both a 1st gen Kindle and an iPad. (I also have a Rocketbook, but let’s not go there :)). I also read a ton.

    I think that Kindle on the iPad is a better reading experience than iBooks on the iPad. In addition to the points made in the post, I would add:
    – Kindle makes it easier to browse the bookstore — you can buy/browse Kindle books from anywhere you have a web browser. The only way to browse the iBookstore is through the iBooks app on your iPad.
    – The iPad is heavier (1.5lbs to 10oz) than the iPad. When you’re reading in bed, that makes a difference.
    – I prefer the UI of the iPad Kindle app to iBooks — I want my pages to just flip, not to be animated. This is probably a personal preference.
    – I also find the amazon website much easier to browse than iBooks — I think that the whole iTunes UI needs an overhaul — the content is not very well organized in my opinion, although the Genius feature helps you find other content you might like.

    The 1st Gen Kindle isn’t a great hardware device, but it isn’t bad. It holds a charge for a long time and its been rugged enough to survive a backpacking trip in the Sierras as well as a camping trip at the beach.

    On the other hand, games, web browsing, watching video, etc.. is superior on the iPad — it’s a far more versatile device. But, the iPad/iBooks e-book experience lags the iPad/Kindle e-book.

  9. taukehkedai

    Most of the time, i used my laptop to browse internet. As a part timer in internet marketing, i spend more time on the web. If iPad can give that same experience, i would bet that i would carry iPad whenever i go rather than my laptop. Anyway, i strongly believe, same like PC and Mac, some people would like iPad, some wouldn’t. It is all depend on their usage and need.

  10. I thought this was going to be an insightful article about how Apple and Amazon could mature a budding symbiotic relationship, but I really had to laugh at the Amazon Flame idea…April Fool’s Day is past. I read Kindle books on my iphone whenever I have some time but don’t want to carry my Kindle. The real way to leverage their book store is ala Netflix..become platform ubiquitous. Don’t design hardware, keep improving the Kindle App for iPad and every other device that someone might read a book on.

  11. Excellent article and analysis.

    The key for amazon is decreasing the price of present Kindle (especially Kindle DX) We know its perfect for pdf’s and yet its overpriced. Everyone of us who owns a ebookreader just yearns for a device that can read pdf files natively and KindleDX does it well. If amazon makes its price competitive, you can expect some very serious competition for iPad.

    Btw you got a hilarious typo on the last line.,
    James McQuivey is an analyst at Forrester Research, where she serves Consumer Product Strategy professionals. He blogs here

  12. Not one mention of Pixel Qi LCD screens? You media people disappoint me.

    There is NO WAY anyone is going to read books for hours and hours on a transmissive LCD screen such as on the ipad.

    E-ink reflects light, so does Pixel Qi LCD screens. Not only would the Amazon with Pixel Qi LCD be just as readable as e-ink on LCD, in e-reader LCD mode the battery runtime could be over 50 hours.

  13. “Even if Apple could offer a full library of books, it can’t offer the decade’s worth of reviews, comments and community connections that Amazon’s bookstore has.”

    Which makes it unfortunate that commenters are wilding out on ebooks that aren’t priced the way they like. They’ve pretty much ruined the rating system for ebooks by doing that and, despite lots of people pointing this out, Amazon is not handling it in a smart manner.

    Too bad for writers and readers.

  14. winc06

    The iPad looks to be a wonderful device, but I recently bought a Sony Reader because I just can’t stand looking at my laptop more than a few hours. I can be half blind from looking at my computer screen and pick up a real book or my Sony Reader and have no problems continuing to read. The iPad has a back illuminated screen that fades in sunlight just like a laptop and that will cause eyestrain in a lot of people and it is just a bit too big for easy portability. I don’t think Amazon has anything to worry about. The Kindle attracted people who are readers. I don’t think that will change. In fact it is likely that many iPad buyers who get intrigued by reading will end up adding an e-Ink reader to their pile of gadgets.

  15. One other thing, I an a professional software developer. I use three monitors to due my work. Personally, I think pretty much all laptops are toys. There are items to be endured when a desktop is unavailable. Laptops are too slow, not high enough screen resolution, poor multi-monitor support, god-awful aspect(why is it so hard to buy a laptop that *isn’t* wide-screen), the keyboards are too small.

    I can go on and on. The iPad is a great device and has put the personal back in PCs.

  16. I strongly disagree with Eric. My wife and I both have iPhones. I purchased the iPad and now my wife wants one. Why? Well, the iPad is more capable than the iPhone *in the home*.

    Browsing: I’ve browsed plenty of times with my iPhone at home, but never enjoyed the experience. I enjoy the size of the iPad. Browsing is, IMO, at least as good on the iPad as it is on my laptop based on how *I* use my laptop. I mainly connect via RDP to my desktop. Now, I’ll just browse.

    Pictures: We all accepted the trade-off of size and quality on the iPhone in exchange for being able to have all of our pictures in one device. Well, not you get the convenience and you get *better photos*.

    Reading: Reading is better on the iPad, IMO, than the iPhone and my laptop because I can sit back and enjoy
    as opposed to leaning forward, crimping my my back.

    Video: What can you say? Again, the screen is king. If my wife wants to watch “Gray’s Anatomy,” I’ll just
    grab the iPad and go into another room.

    Now, will I take the iPad with me to run errands. No, but I didn’t get it for that. Will it come with me on
    vacations or on flights? Are you kidding? Why compromise?

    The iPad has basically turned my iPhone back into a phone.

  17. I would suggest to Amazon that they drop the Kindle-Line alltogether. Why did Apple initially start iTunes? Because the whole Music-Download and play business sucked. I believe Amazon started the Kindle because there just was no eBook Reader besides a PC or Mac. In fact nothing to take away with you on a train or vacation, nothing for the couch or the bed. What they came up with was not really a breakthru device, was it? Is it?
    Now there is a benchmark hardware from a hardcore hardware company. Plus it has the Amazon app on it. What more could they ask for? Amazon’s not a hardware designer they want to sell books!

    PS: I admit that I didn’t read the full post. Sorry I got bored with it.

  18. So what? I like AMZN. I USE AMZN. But, I wouldn’t touch the stock– really high P/E. Apple has much more growth potential; there’s still a lot of Windows users out there, after all…..

  19. RalphF

    This post captures reality quite quell. Amazon has brilliantly built what I call the Kindle bookshelf (not the device, the inventory of paid e-books). First for the X million of hardcore readers who already own Kindles and second for the prospective e-readers who want to dip their toe into the e-reading space but don’t want to be beholden to Apple. And the Kindle bookshelf being readable on all devices (including Apples) is very important. In short, if you are going to purchase an e-book and have it live someplace in perpetuity, whom do you most trust with your “library”? For most readers, Amazon is the trusted relationship there, and Apple will have a hard time displacing it, any more than Amazon can replace the trusted music relationship that most users have with Apple.

  20. The game works both ways. Apple also benefits from Amazon.

    If I were to buy an iPad, I would certainly use “the decade’s worth of reviews, comments and community connections that Amazon’s bookstore has” to choose books I wanted, and whenever possible, buy them through iTunes and read them on my iPad.

  21. Exaclty. Team up with taiwanese companies to create yet another crappy overpriced android tablet in a market already overcrowded with such useless pieces of junk by the bazillions. Brilliant plan.

  22. I spent 2 hours with a new iPad (thankfully not mine but my wife’s purchase) and it’s been sitting on the coffee table now for 24 hours unused. Reverse technology here: The newer iPad’s bigger and less capable than my older 3GS iPhone. One will go with me everywhere. One will collect dust. I expected as much as wasn’t disappointed. It WAS easier to hold and type on that I thought prior to actually touching… and yes, it DOES look and act slick. But it’s a redundant toy.