While reading this bit in the New York Times, "M" just made the observation that Amazon can't be too happy about Apple's new iPad because it might seriously cut into sales for its flagship product, the Kindle.
The Kindle is a great product, and at $400, it should be. But now that Apple is going after the same market with its own iBooks store and a piece of machinery that duplicates the functionality of the Kindle and then does so much more, and at only $99 more, Amazon is in trouble.
But is the Kindle dead in the water? Not by a long shot. First off, there are positives to the Kindle, vis-à-vis the iPad, that will make people still crave it. One of my in-laws is a Kindle zealot and he had me craving one (and if more of my textbooks had been available on it, I would have gotten one). If I were hanging out with him today, he'd be telling me all about why the Kindle is still a great device — maybe even better than the iPad — and I'll try to channel him.
First and foremost, the Kindle does black-and-white ink so very well that it comes about as close as you can get to feeling like you're reading an actual book. Obviously, I don't know yet what an e-book looks like on the iPad, but I can extrapolate based on my own experience with the iPhone. It's bright and colorful, and that works for some, but for others those characteristics would distract from the book-reading experience. The Kindle wins for its elegant simplicity.
And that leads to the next advantage Kindle has over the iPad: once you've turned the page, that page is up and running with very little juice. Simply put, you need power to keep a page open in the iPad, but you don't with the Kindle (well, very little power). Apple claims a ten-hour battery life with the iPad (which probably comes closer to seven or eight in real-world usage), but this is simply not an issue with the Kindle (from what I've heard).
Moreover, the Kindle is a lighter machine. At ten ounces (0.28 kg), it is less than half the 1.5-pound (0.68 kg) weight of the iPad. That makes for an easier reading experience, so there's one more plus in the Kindle column.
Of course, simplicity and elegance of the Kindle variety may no longer be competitive at $400. I think if Amazon drops its price to, say, $200 or $250, the Kindle will still be a huge moneymaker for Amazon.
Yeah, it's sad that such an innovator as Amazon may lose out in this battle. Amazon indeed paved the way for this new e-book paradigm and it seems unfair. But let's not forget that Amazon left a lot of other businesses in its own wake when it competed with brick-and-mortar bookstores that couldn't compete with Amazon's ridiculously low overhead. Indeed, many people (myself included), would go into a real-world bookstore, browse for something we wanted, and then order it from Amazon.com after we got home.
So my prediction is that the $400 Kindle will come down in price, and then Apple and Amazon will compete for "scoops" as to who can get the latest authors or the latest books. Kindle may be expanded in functionality — taking advantage of its wifi capabilities — so that it can do email and things like that, negating the need for an iPad amongst Kindle users.
Well I just went over to Amazon.com and, lo and behold, the Kindle has already come down to $259. Can I call 'em or what? Not a bad strategy on Amazon's part to flood the market with their devices while the iPad still remains unavailable (it will be available to the general public in late March or early April, depending on the model).
I just read an article from last week that says Amazon significantly upped the royalties it pays to those who produce the ebooks its sells. Specifically, it raised the royalties to 70%, which is in line with what Apple pays its content producers (for apps and ebooks, apparently).
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