Early last year, Tim O’Reilly boldly predicted that the Kindle could be gone within two or three years. After the iPad announcement today, it seems that his words will soon become reality.

With the same 9.7″ display size and similar prices, it’s hard to believe anyone would pick Kindle DX ahead of Apple iPad. And the biggest weakness of Kindle is the file format. Amazon forced publishers to user their own file format which can be read on Kindle only. Basically, all your books will be locked to Amazon which is the single point of purchase.

Tim O’Reilly believes:

what Amazon seems to have missed is the important role that “free” played in the success of the iPod. People didn’t populate their iPods solely with music purchased from Apple. It was easy for them to “rip” their own CDs into the standard mp3 file format and load their entire music collection onto the device.

On the other hand, iPad is using the ePub format, the open format from the International Digital Publishing Forum which is supported by a lot of e-book readers.

In this way, Apple can play the same game with their new iBooks Store. Although there is no easy way to “rip” a book, customers can load some of their own epub-based e-books purchased from other vendors onto the iPad. So no single bookstore will take over the e-book world.

According to Paul Aiken, executive director of the Authors Guild:

Amazon is selling e-books at a loss in order to spur Kindle sales – it sells books for $10, but pays publishers more than $10 per copy. But once Amazon gets control of the market, it will be free to impose price reductions – to force publishers to reduce their e-book rates to less than $9.99.

I am sure publishers don’t want to see that happening.

Although Amazon is the pioneer in this category, it seems they still haven’t found the best way to sell digital contents effectively. They should know that if books are not shareable and controlled by one vendor, the marketplace for books will be diminished eventually.

Both Amazon and Apple want to become the nation’s largest e-book retailer. Both of them have revolutionized their own markets with amazing innovations. Who will win this battle at last? While Amazon is the leader now, I am sure Apple will catch up soon, very soon.

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5. Jack Welch on Company Size and Success

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