Amazon’s Kindle strategy as compared to Apple’s iPad strategy

Thu, Sep 20, 2012

Finance, News

John Gruber had a great piece up last week comparing Amazon’s general strategy as it pertains to its Kindle hardware and its accompanying media content with Apple’s own strategy with respect to hardware.

Amazon’s approach to selling media is in many ways platform agnostic. You can read Kindle books not just on Kindle hardware, but everywhere there’s a Kindle app: iPad, iPhone, Android phones, Mac, Windows, and even in a web browser. You can read iBookstore books only on iPhones and iPads. That’s an appealing message.

Apple, Gruber writes, wants to sell as many as iPads as it can. But Amazon, in contrast, has two objectives in mind given that it sells hardware and media content.

It’s a heads we win, tails you lose strategy. That’s the brilliance. If you buy an iPad but use Amazon’s iOS apps to read Kindle books and watch movies through your Amazon Prime account, Apple wins but so too does Amazon. If you buy a Kindle Fire instead of an iPad, Apple gets nothing. Amazon wins so long as you consume media content from Amazon, no matter if you play it on a Kindle Fire or an iPad. Apple only wins if you buy an iPad.

Astute and spot-on analysis right there. Amazon has, to a certain extent, been ignored a bit when it comes to discussing the tablet race. And interestingly enough, Amazon CEO Jeff Bezos views the tablet marketplace as a two-horse race with Apple and Amazon being the only two major players. And it’s hard to disagree. While Android tablets from the likes of Samsung get a lot of press, not many people are really buying Android-based tablets at all, save of course for Amazon’s collection of Kindle Fires.

So there you have it, two tech behemoths with decidedly two completely different ways to make money. Apple with its healthy margins on its hardware and Amazon trying to just break barely above even on its products and make up for it via volume and Amazon Prime subscriptions.

So which is best? Well with over $100 billion in the bank, it’s really hard to argue with Apple’s strategy, but it’s probably never a good idea to ever count Bezos and Amazon out of anything.



, , ,

Comments are closed.

eXTReMe Tracker