Not since the days of “Amazon.toast” has the smell of death hung in the air at Amazon.com‘s annual shareholder meeting. But there it was this past spring. The company faced no real financial trouble: Sales were up by nearly 30%, and Amazon had recently completed its Zappos acquisition. The stench came from all of the Kindle.toast predictions in the wake of the iPad’s debut and rapid adoption. CEO Jeff Bezos’s black-and-white e-reader looked awfully wan compared with the iPad, which lets people surf the Web, watch movies, play games, run apps, and also read books. And in color! The Kindle’s fate was written in e-ink. Apple had created the Kindle killer.
Death is a surprisingly frequent topic of conversation in the tech industry. Everyone is constantly on the lookout for the next Google killer, the next iPhone killer, the next Facebook killer. This search isn’t irrational. For as long as anyone can remember, tech businesses have operated according to winner-take-all economics — a single product comes to thoroughly dominate a certain category, while all its rivals suffer crushing failures. Think of Windows, the iPod, or Google. These products are so far ahead of the field that you wonder why the competition even bothers. The iPad, with its blockbuster sales and round-the-clock media coverage, looks like another winner-take-all business. If the iPad succeeds, doesn’t it follow that everything else in its path, including the Kindle, will lose?
Not so fast. The days of this kind of zero-sum game appear to be on the wane. As we begin to access the Internet on all kinds of new gadgets and not just PCs — and as those gadgets get smaller, more portable, and more specialized in their purpose — we’re beginning to see something unusual in the tech industry. Stalemate. Across a range of markets, several companies are competing for more-or-less equal market share.
Look at the smartphone business. According to Nielsen, Apple now commands about 28% of the market, impressive just three years after the iPhone’s debut. Yet it seems far from obvious that Apple will gobble up the entire business. Research in Motion’s BlackBerry continues to lead, while phones based on Google’s Android OS (a year younger than the iPhone) now constitute 9% of the market — and that share is expanding.
Although it’s impossible to predict who will come out on top in the years ahead, it’s difficult to see how anyone “loses.” Proprietary platforms aren’t what they used to be. In the PC era, Windows won because everyone needed a common system for running applications, and Microsoft was savvy enough to understand the power of feedback loops — developers created programs for Windows because that’s where the customers were, and customers bought it because that’s where developers were. In the Internet age, though, customers are no longer locked in to a single platform. A committed iPhone user could easily switch to Android — your email, social-networking contacts, bookmarks, and other data will follow you wherever you go.
What about apps? Thanks to common Web-based programming standards, it’s easy for developers to port their apps to whatever phones come along next. More important, the Web — our greatest source of apps — is available to anyone, on any platform. As long as Apple, Google, HP (through Palm), Microsoft, and RIM stay in the game, they’ll each be one amazing phone away from taking the lead, or one terrible phone away from losing it.
That brings us back to Amazon’s allegedly beleaguered e-reader. Speaking to investors, Bezos pointed out that because Kindle books are delivered across the Internet to a range of devices — including the iPad — Amazon might actually benefit from the Apple tablet’s popularity. The more iPads Apple sells, the more potential Amazon customers. Bezos is wise to ignore the calls for Amazon to make the Kindle more like the iPad. The Kindle will be a gadget whose only purpose is to read books. Bezos concedes that such a device isn’t for everyone, but “serious readers” will always prefer a dedicated e-reader. They’ll also like the Kindle’s new low price: $189. It’s time to kill the idea of the killer.