Amazon recently announced its new Kindle app for the iPad. Many critics are asking, could Amazon’s shift to a robust e-reader, such as the iPad, make the Kindle obsolete? Wired notes, the iPad “makes the Kindle itself look rather old-fashioned.” However, e-reader hardware might not be Amazon’s end-game strategy. From the get-go, books have been Amazon’s bread and butter, and the e-commerce giant is not losing site of that goal with some fancy hardware.
Amazon understands its strengths: e-commerce, not hardware. On average, Amazon sells 6 Kindle e-books for every 10 physical books in its online store, according to TechCrunchies. Just as Amazon’s online book marketplace grew the website to a multi-billion dollar company ($24.5 billion in revenue, 2009), e-books are Amazon’s next scalable platform. The hardware? Most likely a vehicle for its e-books, nothing more.
At the time of its release, the Kindle filled the market gap for e-readers. Now, with Apple’s iPad, the need is filled, and then some. The iPad’s incredible, full color display and interactive features blows Kindle’s black and white e-reader out of the water. Amazon is smart to realize it cannot compete with powerful industry titans, like Apple and Microsoft, on the hardware front. The e-commerce site can, however, compete in the e-book market — an area Apple is only starting to explore with the iPad’s iBookstore.
Does Amazon jeopardize its 45 percent e-reader market share by enabling Apple to provide a better user experience on the iPad? Yes, but e-readers are not Amazon’s end-game. Amazon’s leadership understands its strengths and weaknesses. It has, and always will, focus on its strengths: e-books, all 450,000 of them. E-readers are Apple’s domain now.