Amazon Should Concentrate More on Software and Less on New Fire

Global Equities Research analyst Trip Chowdhry says that iPad

competitors like Amazon

should focus on getting its software right rather than continuing to build new hardware. Chowdhry says, “If Apple iOS is on a Scale of 10 is 9, AMZN Android is 3. ‘AMZN software is not primetime' is the converged view we got.” According to Chowdhry, AMZN should have poured its resources into developing an improved version of Kindle Reader on iPad. “On a scale of 10, if Apple iBook is 9; Kindle Reader is 4; is the converged view we have,” Chowdhry said. “The success is predicated on innovative software and distribution. AMZN will benefit much more by using iPad as a distribution vehicle for Kindle Application, and putting more R&D dollars on improving Kindle Application on iPad and out-innovating Apple's iBook will have much better rewards for AMZN vs. creating a poor imitation of iPad.” Chowdhry also said that there are three things can could cause a downturn in Amazon's fortunes. “a) Digital Book format - ePub (Open Format which Apple, Google etc support) vs. Proprietary Kindle Format - currently, publishers are supporting both ePub and Kindle Format...any shift towards ePub at the expense of Kindle format, will have negative impact on AMZN. b) Shift from hard goods to digital goods. We are seeing this shift in Software - Delivering Shrink Wrapped Software Boxes is being replaced by App Stores digital downloads. We have seen DVD's /CD's being replaced by Streaming Media; and probably we are seeing early indication of shifts from physical books to digital books, where competition from Apple iBooks cannot be ignored. Some schools in California have pilot projects running, where the kids have all their books on iPad, if this pilot becomes successful and emerges to be a trend, AMZN business may suffer. c) What if AMZN has to pay Sales Taxes....will the customer still stick with AMZN? is still a big unknown... but probably AMZN is safe from this issue for probably another 2 -3 years.”