Why the Apple iPad Is a Kindle Killer, or Not—and How Amazon Must Step Up

1/29/10Follow @gthuang

Almost everyone in the consumer tech industry has been thinking about how the Apple iPad, unveiled on Wednesday, affects their line of business—whether it’s gaming, video, mobile content and advertising, mobile interfaces, or digital books. Especially digital books.

Yesterday, Ben Elowitz, the CEO and co-founder of Seattle-based Wetpaint, argued in TechCrunch that the iPad will put the Amazon Kindle out of business—and he gave his top 10 reasons. Meanwhile, Scott Jacobson of Seattle’s Madrona Venture Group, writing in TechFlash, gave five reasons why the iPad will not kill off the Kindle. I’m waiting for someone to give us 2.5 reasons why we should care.

OK, I’ll do that. One, although the iPad is a multi-purpose device, e-book reading is clearly one of its sweet spots. By rolling out the iBooks store, Apple is saying, we think we can make serious money on this now. Two, it’s super interesting to watch a behemoth like Apple emerge on the scene so suddenly, and in so many different markets—forcing a lot of big companies to raise their game. The corollary to that (reason two-and-a-half) is that Amazon and Apple are prepping for a really major battle over the way consumers experience digital books—and we should all benefit from that. (Well, some of us still like our old-fashioned books, but that’s beside the point.)

From his writing, Elowitz appears to have no big love for Amazon—perhaps his deep experience in online retail at Blue Nile has something to do with that. He points to the superior economics and experience of reading a book on the iPad, as well as the iPad’s support of the ePub format versus the Kindle’s proprietary format, as reasons for the Kindle’s demise. Plus there’s a “cool factor” associated with Apple, he says. “Even those of us who are smart enough to know better still fall in love with Apple products, and carry them with pride. Amazon just doesn’t have that.”

“Amazon is already scared,” Elowitz writes. “The best plan for Amazon isn’t to try to buy customers or try to match Apple’s approach. Rather, they’ll need to re-think their consumer experience from start to finish. They’ve done a great job so far of digitizing books, but now if they want to compete with Steve Jobs’ inventiveness, they’ll have to step up to be a must-have device in consumers’ digital lives.”

Jacobson, on the other hand, is a former Amazon exec who helped launch the original Kindle. He is also a shareholder in both Amazon and Apple, and professes that his household includes two Kindles, four iPhones/iPod Touches, and two iMacs (and soon, an iPad). He points out that the Kindle is designed for hardcore readers—it’s meant to do one thing, and do it really well, and it includes a battle-tested recommendations system. (As compared with iTunes recommendations, which “still suck” when it comes to music, he says.)

Most interestingly, Jacobson argues that Amazon can’t afford to lose this battle. “While the transition from physical to digital will take far longer for books than it has for music, Amazon can’t afford to allow Apple to dominate the market for e-books the way it dominates the market for MP3s,” he writes. “Amazon needs to step up its game. The nice thing about competition is that it fosters innovation. And we the consumers will be the beneficiaries.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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