I had this comment exchange with Bijan Sabet of Spark Capital the other day while talking about a book Fred Wilson was reviewing:

Bijan:

Thanks for the recommendation.

Buying it on kindle for iPhone now.

Me

You’ll read an entire book on your I-Phone?

Bijan

Yep. Until my ipad shows up!

Me

Do u think Apple will offer the Kindle app for the IPad?

Bijan

No idea but I hope so

Me

It would create an intersting dynamic. Having two book reading
options. One that makes you money and one that doesn’t.

It would get me to buy the IPad for sure. I would all but abandon my
Kindle.

Being able to play on both devices would be a boon for Amazon.

This got me thinking.

If Apple allows the Kindle App on the IPad, it could canniblize their own book store revenue. For Kindle readers, there is little reason to buy from the Apple book store. However, it is a great reason to buy an IPad. IPad’s are far superior devices than the Kindle. If I can leverage my Kindle account on an IPad, it would be no brainer to switch.

Apple has an interesting dilemma. Risk losing some book revenue and lower the barrier to adoption for existing and potential Kindle users or draw a line in the sand; have a monopoly on bookstore revenue but sell fewer IPads. I think Apple will be better served by offering the Kindle app. Mostly because, they should want as many people on their device as possible. Secondly, because Apple and Amazon will each be lacking titles. Users will go to both stores to find the titles they want. The bookstore revenue loss may not be that material.

Amazon is in a bit of a different situation. They run the risk of the Kindle device becoming completely obsolete. If Amazon offers the Kindle app on the IPad, they in essence remove any value or need to buy a Kindle. If Amazon offers the Kindle app for the IPad the deliberation between buying a Kindle or an IPad becomes fruitless. The IPad wins. You can simply buy any of the Amazon titles the Kindle offers on the IPad, as well as have access to the Apple bookstore, email, the web, your music, pictures etc. Game over, no contest, case closed, the Kindle just isn’t the device the IPad is.

If I’m Amazon, I put the app on the IPad. I’m not going to play the hardware game. Hardware margins traditionally suck. Hardware is a vehicle to higher margin sales. I suspect this is/was the case for the Kindle. It was created to drive more book sales. If I’m Amazon, I’m going to keep this focus on getting people to buy books from me and let Apple make the device. This is what Amazon does best. They know the online retail space better than anyone. They need to compete on their own turf, where they can win. Competing with Apple on hardware is not a good fight.

If Apple wants to sell more devices, which is where they play best, they need to offer the Kindle app on the IPad. It will kill the Kindle. If they want to be the next Amazon, they shouldn’t. I don’t want to know why they would want to be Amazon.

If Amazon wants to sell more books, they should offer the Kindle app on the IPad. It will get them more book sales. If they want to sell more Kindles, they shouldn’t, but can they be an Apple with the Kindle? I say no.

The Kindle (app) needs to kill the Kindle (device), it is best for everyone.

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