Amazon profits soar, but for how much longer?

The old man of the internet, Amazon has been around almost since it all began. Along with a handful of other goliath websites it started selling fast-moving consumer goods and quickly built up a dominant position.

It was cheap, efficient, reliable and stripped away the need for a stroll the shops. Its success was assured and has endured to this day. Profits in the fourth quarter of 2009 were up 71 per cent, it was announced today.

But today another familiar name in technology could be about to spoil the party. Revealed just two-days ago, Apple’s iPad gives users access to many things that Amazon offers but with what many would describe as an upgraded service.

The iPad looks like a big iPhone, and that’s basically what it is, except with more memory and more capabilities including browsing, games and movies and the chance to work on documents.

By comparison Amazon’s Kindle e-reader – an electronic tablet shaped book reader – looks like a typewriter. Buy a Kindle and you can do one thing, buy an iPad and the world is your oyster.

Then there’s the download libraries offered by Apple, which like Amazon give you a universe of books, music and software. But the iPad, it is said, makes purchasing an enjoyable experience, while Amazon is merely functional.  

Add to these factors the similar prices of the Kindle and iPad and the fact that the latter has “Apple sexiness”, and there’s only one winner.

Amazon expects both sales and profits to remain above expectations this year, but with the iPad taking chunks out of its hardware, software, film, music and books business, whether this will happens is by no means a certainty.

Related article:iPad: the first reactions

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