Amazon’s Kindle for Mac Sets the Stage for iPad World Domination

March 19, 2010 - By Justin E. Gehrke

March 19, 2010 – A little more than a day ago, Amazon (NASDAQ: AMZN) quietly posted a seemingly innocent piece of software, for download, on its mega-store of a website. A few hours later they posted a press release announcing the availability of this free software. As you most likely already know, it’s none other than free Kindle software for Mac computers running OS X 10.5 (Leopard) and 10.6 (Snow Leopard).

“Wait,” you say, “I already saw that on 127 other websites, posted on Twitter 234 more times, and know for a fact CNN Headline News ran a clip on it once an hour yesterday.” You would be right, but the commonality in their coverage focused on the perception that the software’s release was a victory for Amazon, not Apple.

Was it really a case of Amazon poking Apple in the side with its Oprah-endorsed Kindle? In an official press release on their holding company’s website, Amazon said, “Kindle books can now be read on the Kindle, Kindle DX, iPhone, iPod touch, BlackBerry, PC and Mac, and soon the iPad.”

At first glance, it seems pretty straightforward. If you own a Kindle, your books, to include bookmarks, will sync on both the device and Mac. Hold on, though. There is also a Kindle app available in Apple’s iTunes Store, for use on the iPhone and iPod Touch. We also are told that the iPad version of the App will soon be available.

This means Amazon won, right? They showed all of the naysayers and iPad pundits that the Kindle would not go quietly into oblivion, just because the iPad has “Books.” They held their ground and forged ahead and….. Wait, hold on a second. Amazon Kindle app….iTunes Apps Store…iPhone, iPod Touch, iPad. Something doesn’t add up, and here’s what it is.

As of late, Apple has made big headlines about its approval process for apps. Even now, it’s still not certain the Opera browser app will be approved, without some intense drama and feet dragging. So, why then would Apple let Amazon, a competitor in music, movies, and, here shortly, eBooks into their own store? It’s like Target letting Wal-Mart operate a Kiosk inside their store.

Looking at it from Apple’s perspective, it makes perfect sense. Since the announcement of the iPad, one of the highly speculated topics has been what effect the iPad Books app wouId have on Kindle sales. Apple had to have known that there would be those who would forego the iPad, simply because they already had a Kindle and weren’t willing to part with another $500+ (remember sales taxes) to buy Penguin-published books, read email, and update their Facebook status. So what tactic did Apple employ to counter the resistance?

The old saying goes, “Keep your friends close, but keep your enemies closer.” In this case, Apple didn’t just let Amazon move in next door. They fully finished the basement and let Amazon move in for free. Now, Apple has one more selling point and can say, “You like iPad Books but already have a Kindle? Don’t worry. You can bring those books with you, too. As a matter of fact, you should just throw that Kindle in the kindling pile. You won’t need it anymore.”

They’ll be right, too. Why? Kindle will have software versions for BlackBerry, iPhone, iPod Touch, the iPad, as well as for PC and Mac. For iPad owners, there will be two sources from which to purchase eBooks. It’s liking having your own virtual mall tucked safely inside your computer.

More importantly, Apple stands to profit nicely. Remember that it’s general knowledge that Apple gets a 30% cut of iTunes Store sales. As reported in a March 2, 2010 article from paidContent:UK (see link below), Penguin Books’ CEO John Makinson stated the 30% share to Apple is a better deal than the 50% they normally have to share with traditional brick and mortar bookstores.

So, to recap, Apple not only convinced two booksellers to give them 30% of their profits but also was lucky enough to have one of them publicly express gratitude about it. On top of that, Amazon spent its own research and development money to build applications for Apple’s products which, in turn, will likely encourage people to buy more Apple gadgets. Whether they admit it or not, Apple played this potentially problematic situation perfectly.

Does that mean Apple is the only winner? No, in the iPad/Kindle matchup, everyone will walk away a winner. Apple gets its 30% for letting the eBook vendors into the iTunes Store. Both vendors know millions of techies, gadget junkies, and image-conscious youth (and adults) will buy the iPad and buy eBooks, whether they actually plan to read them or not. As a result, they’re happy, as well.

So I guess that means everyone lives happily ever after, right? Apple, Amazon, and Penguin are all profitable. Consumers have new gadget. As a result, peace reigns supreme. Well, that’s unlikely. Why? You have to remember that it’s all fun and games until someone infringes on a patent!