Amazon's Apple Deal: Kindle Cannibal?
Customers may have less incentive to buy a Kindle, now that they can download e-books onto the iPhones and iPods they already own — A new tool that lets consumers download digital books onto Apple devices could spur demand for some of the 240,000 …
Context & Ripple Effects
When Amazon introduced the Kindle in late 2007 (its launch made buying e-books easy), the device was the sole gateway to its e-book store. By March 2009, Amazon reversed that logic: a free app put the Kindle store onto iPhones and iPods customers already own, prompting immediate analyst warnings that it could cannibalize Kindle hardware sales. Skeptics had long argued dedicated readers were a niche (CNET asked in 2008 why e-book readers 'don't stand a chance'), and reviewers quickly judged the iPhone experience inferior to the E Ink device (finding the Kindle 'is not the best iPhone e-reader').
First-order effects
- Prospective Kindle buyers can now read Amazon e-books on hardware they already own, weakening the main incentive to pay for a dedicated reader.
- Amazon deliberately trades potential device revenue for distribution reach, betting that book sales — not hardware margin — are where its economics live.
Second-order effects
- Rival e-reader makers face pressure to follow suit and open their catalogs to multi-platform reading, since a walled-garden device now looks like a competitive liability against the installed base of iPhones and iPods.
- Publishers and newspapers watching e-readers gain traction see smartphones emerge as an alternative mass channel for long-form text, reshaping their device-strategy calculations.
Third-order effects
- The pattern points toward a structural split in which e-books become a software business layered on any screen, while dedicated readers survive only by justifying premium hardware — a question the market kept litigating for years afterward.
- If content platforms consistently prioritize reach over proprietary hardware, device makers' leverage over digital storefronts erodes — foreshadowing the storefront-control battles later visible when Amazon's iOS Kindle app added browser-based purchasing after antitrust pressure on Apple.
The trend: Digital books are migrating from proprietary single-purpose devices toward multipurpose smartphones, forcing hardware makers to compete on services rather than gatekeeping.