In new ads recently posted on YouTube which may make it to TV, Amazon.com (NASDAQ: AMZN) has savaged the Apple (NASDAQ: AAPL) iPad based both on price and the trouble users have seeing its screen in bright sunlight.
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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