I’ve written about this in the past but I believe it even more as time goes by. Amazon will suffer a lot more from the arrival of the Ipad than most would imagine. Some had pointed out that electronic books represented such a small portion of Amazon’s sales that the impact would be minimal. And they could have been right. But my opinion was that Amazon would lose so much focus & energy on this battle with Apple, one that I believe it cannot win, that it would impact the rest of the business as well.
Last week, I mentioned that Amazon was threatening smaller publishers that decided to offer their books on Apple’s Itune store. Seriously? Is that the best they can come up with? Because knowing how Apple has dominated Apps and music, I can’t imagine a publisher would go down that route. Instead, they would probably take themselves off of Amazon. And right now, the selection of books is the only thing keeping clients around.
The product is simply superior
Hearing about Apple hiring staff to start building a colour screen for its Kindle is cute in a way but kind of pathetic in another no? I mean we knew years ago that this was going to happen so why did Amazon just figure out now that having a black and white screen might be a problem when competing against competitors? Did it not anticipate that the competition would have multi-use products to compete with the Kindle? The problem is that at this point, it is probably too late for Amazon to catch up. The Ipad has not even been shipped yet and it’s already years ahead of the Kindle or even worse, it’s years of the future version of the Kindle.
So what is Amazon to do?
I would say it’s simple. Wave the White Flag, give up. Not in the sense that Amazon should stop selling and producing the Kindle, but rather that it should focus on its core strengths, its distribution and shipping network. Continue producing the Kindle but set it off as a division that is no less but also no more important than the others. And when I hear news about Amazon, I would expect the Kindle to be a small portion of it. Amazon is not equipped to compete with Apple for such a device, especially when you consider companies like Sony & Microsoft failed.
Am I being too radical? I just don’t think it’s bad luck that Amazon’s stock has suffered since the release of the Kindle.