Amazon Kindle Ad Taunts Apple iPad

Amazon targeted Apple's iPad in a new Kindle ad campaign that shows off the e-reader's versatility and price point. The two companies are competing for share of the burgeoning e-reader market.

Amazon evidently sees Apple's iPad as a major competitor-if not the major competitor-to its Kindle e-reader, at least based on a new television ad campaign.

The new 30-second spot features a man and woman, sitting poolside. The man struggles to read his tablet PC's screen in the blinding glare, while the woman merrily scans text on her next-generation Kindle. Man, frustrated, asks how she can read "in this light." Woman, thoroughly amused, responds: "It's a Kindle, 139 dollars. I actually paid more for these sunglasses."

Unlike the Kindle, of course, the iPad could actually play that video. Not to mention display text in the dark, with its backlit screen. But Amazon's competitive angle nonetheless seems clear: position the Kindle as a lightweight, versatile and inexpensive way to read.

The WiFi-only version of the Kindle retails for $139, while the next-generation version with 3G connectivity sells for $189. Amazon's latest tweaks to its flagship product include a higher-contrast e-ink screen, longer battery life, Wikipedia access, support for password-protected PDFs and a more lightweight body.

Amazon seems determined to expand its sales channels for the Kindle beyond its online storefront. The device will appear in Best Buy starting this fall, where it will compete against Barnes & Noble's Nook and the iPad. Although Amazon and Barnes & Noble spent the summer engaged in a price-cutting war over their respective devices, the iPad is widely regarded as a looming threat to both; over the summer, an analyst with Susquehanna Financial Group suggested the customer base for Apple's tablet had exceeded that of the Kindle, and that Amazon would face corresponding pressure in both the marketplace and from publishers.

Despite those pressures from tablet PCs, analytics firm In-Stat predicts that e-reader shipments will grow from around 12 million units in 2010 to 35 million in 2014.

"Tablet PC shipments are taking off, fueled in particular by the Apple iPad introduction. Yet, there will still be a revenue opportunity for e-reader suppliers and OEMs since tablet PCs and e-readers target different consumers," Stephanie Ethier, an analyst with In-Stat, wrote in a Sept. 14 research note. "Standalone e-readers will address the needs of avid readers, to whom the reading experience is central. Tablets are better suited for consumers who prefer a stronger multimedia experience, and only light reading."

The firm predicts that e-readers will decline in price throughout the rest of the year, with more devices dipping below $100. Featurewise, the line between a traditional e-reader and a tablet PC will begin to blur. Lastly, though, the tablet PC market will continue to grow exponentially, from 13.7 million units shipped in 2010 to roughly 58 million in 2014.