Some say that Amazon is worried about the iPad.
Amazon was always going to face competition from other e-Book readers. But they perhaps didn’t expect the paradigm shift that has potentially come with the iPad and Apple’s iBook Store.
Even so, Amazon has just posted earning results which were higher than Wall Street expected. They did, however, follow them up with far more conservative estimates for future earnings for the next quarter. Shares in Amazon fell 6% in after-hours trading. Not a huge surprise there. The markets are fickle and tend to react to future earnings rather than current earnings.
What is interesting to note is that now that Amazon seems to be on the back foot and few industry blogs are starting to rally round their position, and gently taint their commentary with warnings of Apple’s impending dominance. Referring to the control the media savvy tech giant currently wields over the music retail business.
And yet it was only a couple of months ago that Amazon was locked in battles with publishers over royalty terms that those publishers found unacceptable. And some of those same blogs were cleating about how “evil” Amazon were being!
What we need to remember is that Apple re-invented the music business. In many ways rescuing a crippled industry from its own bad management and lack of foresight. And now they seem to have opened up the publishing industry further than Amazon were willing to, and given “new media” a brighter future. Hardly bad things.
Apple, keen to get a foothold in the eBook market has offered more favourable terms to publishers and small authors. Whilst Amazon was busy trying to lock people and companies into its system prior to the iPad hitting. They have obviously been slightly nervous for some time. But do they really need to be?
Amazon have traditionally exceeded the expectations of their shareholders, and don’t seem to be in such bad position really. They have apparently just inked a deal with Target to physically stock the Kindle in their stores. Target will sell the Kindle at the same price as Amazon retails them online. Amazon will be taking a cut in profits on its hardware by selling that way, and kind of contradicting its own corporate strategy of being an online retailer. Consumers will potentially be able to compare the iPad and the Kindle in the real world side by side before buying too.
Overall, Amazon seem to have a good spread of strategies, and healthy market penetration, that should enable them and Apple to keep each other honest, and in the end benefit the consumer.
What we must also remember is that Amazon can still sell its eBooks onto many platforms, including the iPad and the iPhone with its Kindle apps.
All in all it doesn’t seem Amazon have much to worry about, even if the Kindle slowly dies as a platform. Although they are predicting 7 million Kindles will have been sold by the end of the year. Not a small number if it pans out that way. And some say that many avid eBook readers still prefer the easier to read image on the kindles e-ink display to that of the iPad.
For techies the iPad is a much better deal. You can have your cake and read your eBook. But not all readers are looking for a tech bargain, many are more familiar with the Amazon brand, and prefer the more “ink-like” display of the Kindle.
Do you think the Kindle will die? Is Amazon in trouble? Has Apple actually made the eBook market a better place for consumers? Let us know in the comments