One of the most fierce tech battles of late has been Google vs Apple. On multiple fronts you would see both these silicon valley giants battling it out, sometimes in a subtle manner while other times quite publicly. Apple made the iPhone and captured the smartphone markets mindshare in 2007-2008, in came Android and Google soon became the biggest competitor for iOS. Apple started its own iAd to hurt Google and even before that Google Voice on iPhone debacle left everyone with a bad taste… leading upto an FTC investigation. It doesn’t end there, Apple is gearing up to get its own Map service on the iPhone, it already has iCloud as a step towards Google’s domain and Siri already sidelines Google, working with Wolfram Alpha and Yelp directly.
But if we look at how things are unfolding now, soon we would be talking about Apple vs Amazon. This time, Apple made the first move towards a domain dominated by Amazon – ebook readers. With the release of the iPad last year (and of course iBooks) Apple became a direct competitor to Amazon’s Kindle. Kindle has had its app on the iPhone, web and now even the iPad, however one couldn’t resist comparing the iPad with an Kindle. While die hard book lovers sided with Kindle, iPad got the volumes (note: Amazon doesn’t reveal Kindle’s shipment numbers) and benefited from being an apps enabled, multi purpose portable computer. The iPad (Tablet) effect was what Apothekar of HP cited when deciding to sell out the PC business. But the Amazon vs Apple story has just began.
Amazon has hit back with the Kindle Fire and many believe that it is the first tablet that holds a candle to the iPad, not as a direct competitor but a viable new market in many ways. Amazon has concentrated to make the Fire a content consumption device, something that we have often refereed the iPad to be. Beyond the consumption point, any tablet turns out to be a luxury in todays world and thats where Amazon wants to make the Kindle Fire a must have by keeping both, the price and utility low. Will it do volumes more than the iPad / iPad 2? Probably not, but Amazon has made a move in the Apple dominated tablets market and it is so far the most viable one. The story however continues with rumors of an Amazon phone.
Amazon is said to be in race to buy webOS (Palm) from HP and use the same for its phone endeavor. At the same time many independent rumors have claimed that Amazon would be building a smartphone and at the same time more tablets with larger screen sizes. Add to this the fact that Amazon is selling Kindle and Kindle Fire at a loss, the business model is very different. Apple makes money on the hardware and bundles kick-ass OS, Google gives the software free, let others make the hardware and makes money on Ads, Amazon gives the hardware at a discount and makes money by selling content like eBooks, Music or anything else on Amazon.com. Given that Amazon has perfected this model since years selling the Kindle, the Fire and the upcoming smartphone would mean direct competition with Cupertino. Cloud services, Apps, Music, Books … Amazon has a foot in each of these.
Logically, they are well placed to pull off a great competitor to Apple, but can they really afford to continue making loss on the hardware and make money from subscriptions / content sales? After all app sales isn’t the big revenue churner for Apple. The difference is in the approach and focus, would be interesting to see how Amazon and Apple fight it out.