MacLeans Magazine - The mighty Amazon

(07-Apr-11) In the world of technology, there’s hardly anything as dangerous as missing the boat on the next big thing. Take Microsoft and Nokia. The two behemoths dominated the high-tech universe in the 1990s, but only two months ago they were dubbed “two unpopular kids in high school with rich parents” by an analyst in the pages of the New York Times when they announced an alliance for a joint push into smartphones.

And there’s no shortage of criticism directed at the other tech titans scrambling now to catch up to Apple’s stream of life-changing devices, from the iPod to the iPhone to the iPad. Most who have tried to duplicate Apple’s success with trendy products have failed—think of hardware giants such as Motorola, Samsung and Sony. Google, which has had surprising success with its Android operating system for smartphones, and Research in Motion, an early innovator with its BlackBerry, are the rare exceptions so far. But there’s still another player that stands a chance of standing up to Apple and playing a big part in the way we’ll buy and consume digital entertainment in the future: Amazon.

The Seattle-based online retailer is perhaps best known to Canadians as a place to buy cheap books online. But increasingly, there are signs that it has much bigger ambitions. Amazon already has the world’s most popular digital book reader, the Kindle. Though the multi-purpose iPad tablet, with its Internet-browsing, video-playing and even video-phone capabilities, has outclassed e-readers, it hasn’t eroded their popularity. People still like the Kindle—a lot. Sales reached eight million last year, compared to 2.4 million in 2009, according to estimates. Some prefer its easy-on-the-eyes display, as opposed to the iPad’s backlit screen; others own both devices. Most of all, people appreciate the Kindle’s start price of US$139, compared to US$499 for the iPad 2.

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