The difference in the usefulness of the two devices appears to be small, but it may be all that Amazon has in its arsenal. The Kindle is a better e-reader because its content can be viewed easily in very light places. The iPad lacks that capacity, but does nearly everything a laptop computer can do.
Kindle has decided to make the better-selling iPad its competitive target, at least in public. That says a great deal about where Amazon management sees the long-term threat to its e-reader franchise. The Barnes & Noble (NYSE: BKS) Nook may simply sell too few devices to hurt Kindle sales.
The Kindle’s only other advantage, which may only be temporary, is that it sells for as little as $149 while the base iPad costs $499. If Apple drops the price on the tablet as many expect, it could easily take market share from Kindle.
Amazon is already faced with the perception that its e-reader business will be besieged with a slew of new tablets from consumer electronics and PC companies. None has the advantage of Amazon’s huge e-book store, but there is no reason that publishers will decide that they should not place their bets across many delivery systems. Apple has already built a large e-book store. That should tell Amazon management that it has no monopoly in the content business.
Wall St has thought that the iPad was Amazon’s real competition in the e-reader business and now Amazon’s management must be hearing footsteps.
Douglas A. McIntyre
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