How Amazon can beat the iPad

Get ready for an e-book war as Apple positions the iPad as a Kindle killer.

By Kim Peterson Apr 2, 2010 12:15PM
Credit: (© Justin Sullivan/Getty Images)The iPad from Apple (AAPL) goes on sale Saturday, and if the early reviews are to be believed, the tablet device could strike at the heart of Amazon's Kindle.

But don't rule out Amazon (AMZN) yet. The company has a few weapons in its arsenal to counter any threat from the iPad.

The Kindle will first benefit from good timing. Or, in Apple's case, bad timing. See, the iPad will not ship with the book-reading software Apple has developed, reports The Wall Street Journal. It wasn't ready in time.

That means users who want to read e-books on the iPad will have to decide which free program to download. Certainly, Apple's new iBooks software is a choice, but Amazon can use the opportunity to jump in with its Kindle app for the iPad.

Yep, instead of ignoring the competition, Amazon has embraced it and developed an app for iPad users to read Kindle books. Apple will have iBooks ready for download on Saturday, but it's not clear when Amazon's app will be ready.

Amazon has 80% of the e-book market in the U.S., analysts say. That will certainly change after Saturday, as Apple's sleek new iBooks app delivers some benefits over the Kindle (namely, a color screen that looks better than the black-and-white Kindle).

One analyst told the Journal that in the iPad's first year, users will probably buy more books from the Kindle store than an Apple iBooks marketplace.

Another analyst, Gene Munster at Piper Jaffray, proposes a bolder move for Amazon: Cut the price of the Kindle to $149 from $259.

"By widening the pricing gap between the two devices, Amazon might temper the maybe-I-should-just-spend-the-extra-money-and-get-the-iPad hesitancy that, let’s face it, a lot of potential Kindle buyers are probably already experiencing," writes John Paczkowski on AllThingsD.

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