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Posted by James McQuivey on April 5, 2010
Throughout, as various members of the press have mused about the death of Amazon's Kindle, I feel compelled to point out that, contrary to popular belief, Amazon is in a better position now than it was before the iPad. That's right, if Amazon comes out swinging, Round 2 will go to Amazon. Here’s why:
Notice that I did not defend the current hardware device known as the Kindle. I don’t believe Amazon expects these devices to live for more than another 5 years or so. In fact, it’s very likely that the current Kindle devices will get a sharp price shave in order to sell the 3.5 million eInk Kindles we’re estimating for 2010. And I’d be surprised if we don’t see a new Kindle model in 2011 at a significantly lower price point to exploit the fact that it’s such a great eReader for traditional books if nothing else.
But propping up the market for eInk devices is not where the action will be. Because for Round 3 and beyond, Amazon’s success will depend on it introducing a full-color, full-media, touch device that I have presumptuously nicknamed the Kindle Flame. Here's what Amazon should do to fan the fire:
Of course, my advice for Amazon can also extend to Sony. Sony makes TVs, game consoles, laptops, and, now, the world's #2 eReader. It also owns content assets, though it hasn't always succeeded in making those assets work for it in the market. Indeed, if TV content is the biggest hole in the fabric Apple is weaving, Sony could deliver that much more easily than Apple could -- imagine a connected Blu-ray player with a built-in DVR that synchronizes with Sony's version of the iPad (I have no clever name for Sony's version, though if the past is a reliable guide, I fear Sony will christen it the DTM-5001). There's a device ecosystem that could finally work for Sony.
Yes, folks, this match is far from over and even if Amazon takes Round 2, there's a lot of fight left in all these fighters. And that's just the way it's supposed to be: we don't want a repeat of the iPod market where Apple's extremely successful device so dominates the landscape that no one else can even hope to innovate and change the market. So even if you're an Apple fan, be grateful that neither Amazon nor Sony are going to take a dive, because the iPad's best chance for becoming as magical and revolutionary as Steve Jobs promised is in response to serious pummeling from the competition.