The recent moves by Amazon

We are looking for a new intern. One of the candidates submitted this article as a response to our test. We had given him this article to comment on.

Over the past two weeks, Amazon has made two moves to “kindle” some interest in the e-book industry.  

  1. They released its Kindle 2 electronic book reader, which for $360 will allow you to effortlessly shop from its catalog of 240,000 titles.  Wireless capabilities are provided by the Sprint cellular network, however, Amazon fronts the bill so you don’t have to worry about subscription fees.  Most new releases will run you $10.  Initial feedback is that the software is super user friendly and fast. 
  2. They announced that you will be able to buy and read from its catalog using an iPhone or an iPod Touch by downloading the Kindle reader software for free from the App store. 

As it appears, Amazon is not only taking a page out of Apple’s design prowess by streamlining its software to make a satisfying user experience, but they are also capitalizing on the iPhone’s ubiquitous nature by using the device as platform to distribute their content. Quite the bold move.  Instead of recognizing Apple as a potential competitor, Amazon must believe that their strength within the publishing industry and their “first-mover” status will provide enough protection as they attempt to build a market. 

Interestingly enough, Amazon’s new found strategy is strikingly different to that of which Mr. Jobs utilized with the launch of iPod/iTunes.  Amazon is looking to exploit the potentially significant profit margin from digitally distributing books (which requires no physical material costs, shipping costs, or warehousing costs), thereby turning their focus to e-books as a service provider.  

Contrastingly, Apple’s focus is on their hardware that carries an extremely high profit margin, while iTunes (their service provider) was initially created as a loss-leader (yet many have questioned the validity of that assertion over the past year). 

Original article

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