>Apple vs Amazon — Let the Games Begin

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Around the turn of this century (21st that is), Apple was getting itself ready to go beyond the highly competitive (and low margin) PC business and into the feverishly controlled and secretive music industry by introducing a tiny cigarette pack size device called an iPod. Driven by 5GB micro hard disk which promised to hold thousands of our favorite songs and could run them for many hours at a stretch was something that we did not even know we wanted. And the industry giants like Sony thought it made no sense and just outright went on an anti-mp3 crusade.

For Apple, it was truly a radical departure from its core business of making computer hardware and software. But with Steve Jobs cunning insight, and ability to see what we want before we know we want it, has turned the company into a media giant. What happened since that day is nothing short of a revolution for the electronic industry. Today, iPods are no longer just music players, they are essential accessories in our lives. It is hard to not run into someone who is not listening to a Podcast, a song, or watching a video, playing a game or gesturizing something on their iPods/iPhones.

What Apple got right and what Microsoft, Google and Nokia don’t get is that Apple is not trying to get into the music or phone business. No, it’s not into a PDA or gaming market either. It is essentially about being a leader in the distribution, use and viewing of digital media using an electronic device preferably a hand-held like an iPhone. Something that Amazon has been aspiring to do with its Kindle devices for the past many years.

Apple with its well and tightly integrated iTunes desktop, store and hand held devices (iPods and iPhones) has created a unique eco-system that is hard to rival or match. Kindle, from Amazon, comes in close with its ability to let users download what they want to read at a touch of a button. However, it still lacks as a complete device in many ways including not letting them run interactive media (like games, videos or even music). It does not support Wifi and still runs on some proprietary mobile data network (making it hard to use outside the USA). And worst of all the display is still black and white. Which is great for reading books but makes a boring display for doing everything else. And oh, it is heavily dependent on tons of buttons as the screen is not yet touch sensitive.

It is touted that within a few months Apple will announce an iMac Touch/iPad, a tablet PC with no keyboard or mouse, but just a huge touch screen. In short, a glorified version of iPod Touch that will probably have built in access to a 3G network (along with Wifi) allowing users to do anything and everything digitally. A device that will take on Amazon at a game that it thought it had created and had a complete monopoly over. Users who are already more comfortable dishing out money at iTunes Store will probably use it to buy/read books, watch movies, share photos and do whatever their heart desires online.

Apple’s strategy of going after the digital content and dominating that space has truly secured their place for the next decade. They are likely to dominate this market place for many years to come while traditional rivals like Microsoft and Google (with Android) will be left behind wondering what hit them. And for Amazon, it finally has a competitor that has its game plan all worked out against them.

The next decade is all about digital content. It will be all online and will be fueled by handheld devices. Apple has already geared itself to that challenge and will likely dominate this segment while its rivals will be once again left wondering what did they do wrong.