Kindle Feels iPad's Heat, Sees E-Reader Lead Going Up in Smoke
When Apple CEO Steve Jobs first announced the company's new iBookstore and iBooks application for the iPad back in January, he said that while Amazon had done a great job with its Kindle e-book reader, Apple planned to “stand on their shoulders and go a little further.”
Context & Ripple Effects
The e-book fight has been building all year: Steve Jobs framed the January iBookstore launch as standing on Amazon's shoulders, and by spring the head-to-head was concrete — an early iBooks-vs-Kindle comparison found Apple matching Amazon's catalog terms, while reporting that Apple had effectively stacked the deck against the Kindle app inside its own storefront ecosystem.
By April, Piper Jaffray's Gene Munster was already arguing Amazon should cut the Kindle to $149 to defend share against a device doing far more than reading. Eight months on, that pressure thesis has hardened: the Kindle's e-reader lead is now seen eroding, which matters because books were the one franchise where Amazon owned both the device and the store.
First-order effects
- Amazon faces renewed calls to discount Kindle hardware — the Munster-style $149 argument gets louder as iPad sales pull casual book-buyers toward a multipurpose device.
- Apple's iBookstore converts iPad owners into direct Amazon rivals at the point of purchase, ending Amazon's role as the default bookstore on the fastest-growing tablet.
Second-order effects
- Publishers gain a credible second major retail channel, weakening Amazon's leverage over e-book pricing terms that it had set largely unopposed.
- Dedicated e-reader makers beyond Amazon (Sony, Barnes & Noble's Nook) must compete against a tablet whose incremental cost to the buyer looks near zero once general utility is counted.
Third-order effects
- If the pattern holds, single-purpose readers become loss-leading or niche devices and the real contest shifts to who controls the content storefront — a structural move from selling hardware to renting shelf space in a digital bookstore.
- A bifurcated market emerges: premium tablets for general computing and cheap readers for voracious book buyers, squeezing the mid-priced dedicated e-reader out of the lineup.
The trend: Dedicated e-readers are ceding the mass market to multipurpose tablets, shifting the battleground from device hardware to content-storefront control.