Apple vs Amazon

Apple vs Amazon
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September has been an exciting month in mobile, or more generally, connected devices. Last week, Amazon announced two new Kindle Fires and is trying to move into iPad-sized tablets. In spite of the controversy over ads displayed on the lock screen, it’s a very compelling price point.

Perhaps most interesting is how Amazon views Android. Amazon CEO Jeff Bezos says “it’s a base operating system layer”, like Linux but with a lot of customization. In other words, they’re not in the game of making Android devices; they’re making Kindles.

Amazon’s not alone. Barnes and Noble’s NOOK comes to mind, as do other OEMs who’ve shared their plans to move in this direction. For tablets, the trend away from Google-approved Android devices is accelerating.

This week, Apple is expected to announce the iPhone 5, but there’s also speculation that a 7″ iPad (the so-called iPad mini) is in the works. It’ll be interesting to see how the turf wars play out. As Amazon moves into the iPad territory with its larger, retina-like 8.9″ Kindle Fire, Apple moves down into the 7″ tablet category.

Their business models are quite different. Apple makes more money on devices than from selling content/services, while Amazon is the opposite. Now, Apple’s model is much more profitable right now, and that’s because they can charge a premium. But in order for them to maintain that premium, they have to innovate in ways that make it difficult for competitors to catch up.

This explains why Apple is updating iOS at such a furious pace, so they can differentiate themselves sufficiently to create value in their hardware. The billion (trillion?) dollar question is how long will this game of “catch me if you can” last? Will it continue indefinitely? Is there some critical threshold?

Apple keeps pushing the envelope on hardware (e.g. retina displays) that force changes in the software. As long as they can keep doing that, the competition will be chasing them for a very long time!

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This entry has 2 replies

  1. Nick Golden says:

    I’m glad that Amazon has released new kindles. I want the user base of those devices to go up, as I am not planning on releasing my game to android, but rather Kindle fire devices, and possibly nook. At least I know that even if there are a handful of configurations with Kindle/Nook it’s better than the trillion, bazillion configurations of android (aka “fragmentation”).


    • Miyudreams says:

      Kindles use Android OS. You create your app using Android’s SDK, (sorry fragmentation will still exist). Then if you want it to be sold on Kindles, you use Amazon’s available libraries for in-app purchases and Game Circle, and change your redirects to Kindle stores. Your Kindle app will get tested on Android devices, and it’ll fail if the apps don’t work on Android phones. I released my app on Android first, then dropped in some Amazon libraries, and released it for the Kindle.