June 11, 2010
Mac Greer: Motley Fool analyst Tim Beyers, what's the biggest single misconception about the Kindle-versus-iPad smackdown?
Tim Beyers: People don't understand that this is a software battle, not a hardware battle. I think Amazon (Nasdaq: AMZN ) has a lot less to fear here than people think they need to fear. I'll qualify that by saying if Amazon thinks of this as a hardware battle and they're investing heavily in the hardware, then yes, Amazon shareholders have something to fear. But I don't think that's true. Last year we heard from CEO Jeff Bezos that the Kindle business is going to be divided to hardware and software. And now we're seeing Kindle appear as software in a lot of different devices. And the Kindle store is being made available, regardless of the e-reader you have, including on the iPad.
Greer: Over the next five years, Apple (Nasdaq: AAPL ) or Amazon for investors?
Beyers: I like Apple, for the simple reason that I don't think we have a clear read on how big the iPad and iPhone opportunities are. What we do know, though, unequivocally, is that they're big, and we know the margins on these devices are better than they are on Macs. So it's very likely that we haven't fully experienced the earnings power of Apple's new class of devices.