To be sure, Kindle inventory can be bought on an iPad. But Apple is going to push its iBooks offering, shifting sales away from Amazon.
To be sure, notes Citi analyst Mark Mahaney, Amazon enjoys a lead for the moment in product breadth and depth. Comparing Kindle and iBooks, using the New York Times best sellers list as the data source, Mahaney notes that 88 percent of New York times fiction and non-fiction best sellers are available on Kindle, compared to 63 percent from iBooks.
The average price for eBooks on Kindle is $11.23 compared to $12.31 for iBooks, a 10 percent advantage for Amazon.
About half of NYT fiction and non-fiction best sellers are available for both platforms, and 80 percent of those items are priced identically on each platform. About 20 percent of the items that are cheaper on Kindle are about 11 percent cheaper, on average.
That's probably not a sustainable advantage, as a 10-percent price advantage on a $12 item is just $1.20, not likely a sustainable "moat."
The iPad is not exactly a "give away the razor, buy the blades" strategy. Apple very much wants to sell razors. Amazon, on the other hand, really wants to sell blades. That illustrates an interesting difference in business models. Apple would merchandise content to sell media consumption devices. Amazon really would rather merchandise the platform and make a living selling the content.
Apple sells devices in the $500 to $800 range, while Kindle sells in the $189 to $489 range (basic version or the Kindle DX). Others may disagree, but it would seem Amazon has incentives to figure out how to "destroy" its hardware pricing to grab more media sales. That certainly makes more sense in the near term than trying to move upmarket directly into the iPad space.
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