Best business decision of decade: Kindle app?

amazon_kindle.top.jpgAmazon now sells more e-books than books, largely a result of its decision to put its Kindle app on any device. By David Goldman, staff writer


BARCELONA, Spain (CNNMoney) -- AT&T CEO Randall Stephenson called Amazon's Kindle e-reader app the "gutsiest and savviest business decision of the past decade" during a keynote address on Tuesday.

At the Mobile World Congress in Barcelona, the wireless giant's CEO said Amazon's decision to put its application on every conceivable kind of device -- even though it sells its own e-reader -- made the company "the poster child" of the cloud computing movement.

"When Apple's iPad came out, and it became clear that it would be a hit, what did Amazon do? It made an app for it," Stephenson said.

When Amazon (AMZN, Fortune 500) decided to launch its iPad app, essentially giving users a reason to buy a competitor's tablet over its own, analysts called it a brave and bold move. But Stephenson said it is now clear that Amazon's decision was incredibly intelligent.

That's because Amazon had the foresight to understand the implications of the cloud computing trend for the consumer: Content is becoming far more important than the device it is consumed on. Users just want to read their books, watch their videos and get their e-mails, regardless of whether it's on a Mac or a PC, an iPad or a Kindle, or a Windows Phone or a BlackBerry.

Half of us consume the same exact content on three or more devices, according to a new study commissioned by AT&T (T, Fortune 500). That means people are watching a Netflix movie on their PCs, picking up where they left off on their Nintendo Wiis and finishing up at the gym on their iPhones.

For Amazon, it means that people are buying Kindle e-books from the company regardless of what device (or devices) they use. So it's no surprise that Kindle was among the first applications mentioned during the launches of new mobile devices, including Microsoft's (MSFT, Fortune 500) Windows Phone 7 and Hewlett-Packard's (HPQ, Fortune 500) TouchPad tablet.

It's a strategy that is clearly paying off: Amazon sells more Kindle e-books now than physical books.

"The customer experience is increasingly device-, OS- and network-agnostic," Stephenson said. "We can try to fight it, but customers will do what they want."

Digital music and media are becoming less reliant on the device they're consumed on, but Stephenson said the next step forward will be for mobile applications and video. Live and network TV is consumed differently on a PC or television than it is on a mobile phone or tablet, and the experience and availability of mobile applications vary from operating system to operating system.

But that could soon change. A new Web standard is emerging in HTML5, which offers a much richer and more dynamic user experience. That means more mobile applications will be written right on the Web itself, meaning they will work across multiple platforms.

Following Amazon's lead with Kindle, Stephenson said AT&T is investing heavily in the cloud, which he called "the path forward."

There is a danger associated with that: As consumers care less about what devices they are using, they also care less about how those devices are connected. Wireless, fixed access or Wi-Fi, people simply want access.

But Stephenson said this is AT&T's Kindle moment: He believes the companies that are most open and amenable to innovation will stimulate the most demand for their services.

As an example, he pointed to text messages. At first, SMS could only be sent to those who were on the same network as the sender. But when networks opened up the ability to send texts to people on other networks, text messaging revenue exploded.

He's hoping the same will be true in the cloud. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,804.80 26.65 0.15%
Nasdaq 4,765.38 16.98 0.36%
S&P 500 2,070.65 9.42 0.46%
Treasuries 2.18 -0.03 -1.27%
Data as of 8:34pm ET
Company Price Change % Change
Bank of America Corp... 17.62 0.09 0.51%
Apple Inc 111.78 -0.87 -0.77%
General Electric Co 25.62 0.48 1.91%
Intel Corp 36.37 -0.65 -1.76%
Microsoft Corp 47.66 0.14 0.29%
Data as of Dec 19

Sections

New York Magazine reporter Jessica Pressler, who has been caught up in controversy this past week, will not be moving on to a new job at Bloomberg News. More

Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More

Forums in dark corners of the web sell the kinds of hacks that befell Sony. More

Unilever sued Hampton Creek over its egg-free mayonnaise spread Just Mayo. But the company behind Best Foods and Hellman's mayonnaise has now dropped the lawsuit. More

The income of the top 1% jumped significantly in 2012, far outpacing inflation. Not only did this group make a larger share of the country's income, their share of total taxes also jumped from 35% to 38%. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.