Tuesday, June 29, 2010

TechCrunch hits the mark on Bezos's interview with Fortune

TechCrunch's Robin Wauters has deconstructed an interview that Amazon's Jeff Bezos gave to Fortune Magazine. In the interview, Bezos claims that the iPad had no influence on the company's recent Kindle price drop, and he says that tablets like the iPad are "really a different product category. The Kindle is for readers."

The fact is that Amazon's own advertising belies Bezos's remarks. Last night, I saw a TV ad for the Kindle that was based on one, and only one, feature: The ability of the Kindle to be read in sunlight. That doesn't differentiate the Kindle from the nook, Sony Reader, Kobo, etc. The only device that Amazon's ad was targeted against was the iPad. Amazon isn't spending money on national television advertising to position itself against a product that it doesn't compete with.

My opinion is that Amazon shouldn't be in the hardware business. The industry is moving too fast, and the prices are dropping too quickly, for Amazon to maintain the margins that it's looking for. At the time that Amazon got into the hardware eBook reader market, good hardware was essential to get consumers to adopt eBooks. Now, however, there are good hardware solutions available from many companies, and the pace of technology is getting away from Amazon. The company's not going to be successful in making the Kindle an application delivery platform to compete with the iPad or with Android-based products. On the other hand, Amazon has good eBook reader software for every major platform, so it no longer needs its own hardware.
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