Amazon is not backing down from Apple and its iPad. Amazon is exploring new strategies and technologies for its ebook reader to square up to the Apple tablet.
1. Kindle Apps
Amazon’s Kindle Apps recently made its way into the iTune list of the iPad. Amazon has the bookstore, the 450 thousand ebooks, and the years of good customer relationships. The iBookstore is new and untested, has more expensive ebooks, and smaller store selection. Amazon has the $9.99 books, and the capability to flow purchased books from iPad to Blackberry, iPhone, iPod, PC, Mac, or even Kindle. It’s pretty obvious who has the upper hand in the competition.
Amazon has also announced it is opening an apps store and has invited third party developers to come up with applications for the device. Amazon understands it has to extend Kindle’s use beyond the hardware before Apple knocks it out of the market. By making its product more versatile, Amazon is playing on its main strength as an e-commerce venue. At the same time, Amazon is giving the Kindle its first step towards multimedia capability.
2. DRM Opt-Out
This move took place quietly it didn’t quite make the headlines, but last January Amazon made a major change to its Digital Text Platform. The new policy allows small publishers and individual authors the option to drop the Digital Rights Management (DRM) format and, thereby, allow consumers to move the purchased titles to other ebook readers. In this case, Amazon has a margin of advantage of Apple as iBooks are restricted by FairPlay.
3. Acquisition of TouchCo
Just like the changes it made to Digital Text Format, Amazon’s acquisition of TouchCo went quietly unnoticed. TouchCo, a touchscreen technology firm, has been working on an e-paper that will integrate true multi-touch capability and Mirasol’s color technology. This screen display can give Amazon the technology that matches, even exceeds, iPad’s capability. By making the device more appealing to potential ebook reader and tablet buyers, Amazon may see better Kindle sales in the future.
TouchCo screens are also cheaper to produce (about $10 per square foot) than the technology used on the iPad. This means the Kindle, despite its touchscreen feature, would still be cheaper than the average iPad by around $200.
4. $9.99 price point for ebooks
Despite intense pressure from publishers to increase ebook prices from $9.99 to $14.99, Amazon is refusing to bow out. By maintaining a $9.99 price point, Amazon retains a competitive edge over the iPad and other ereaders.
Amazon can still do more to give the iPad a square fight.
1. Amazon can work with Adobe and Google to create ebooks that are platform-independent. The Kindle, after all, is an application and not merely hardware.
2. Increase their ebook catalog. Perhaps Amazon can include out of print books, among others.
3. Encourage specialty publishers to publish electronic copies only by providing them better incentives.
The Bottom Line
By narrowing gaps in hardware design between the Kindle and the iPad, maintaining low ebook price, and making the Kindle application more flexible, Amazon is in the right track towards making its ebook reader a good match to the Apple tablet. Watching the future of the Kindle and the iPad unfold has just become even more exciting.
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