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How Apple Could Crush and Save Retail

NEW YORK ( TheStreet) -- (AMZN - Get Report) did not introduce Kindle Fire to compete with Apple (AAPL - Get Report).

Jeff Bezos is not an idiot. Bezos knew/knows he had/has no chance of even denting Apple's tablet market share. Bezos conceived Kindle Fire, not as an iPad knockoff, but as one means to the end of driving Amazon's e-commerce sales.

If we believe recent comScore data, Kindle Fire, at least relative to iPad, might be falling short. For a synopsis of the numbers see my article, Apple Leads Amazon In Mobile Commerce Race or, as Jim Cramer put it in a tweet, Apple Pantsing Amazon?

Simply put, iPad owners engage in a wide range of e-commerce activities, such as making purchases and researching items, at a much higher rate than Kindle Fire users. Before discussing how Apple could punkslap Amazon and save brick-and-mortar retail's sorry butt, a few disclaimers on comScore's stats:
  • Lower mobile commerce-related engagement rates cannot lead us, without question, to the conclusion that Kindle Fire does not do its job for Amazon. Plus, some iPad users could be shopping through an app.
  • I'll make the presumably safe assumption -- iPad buyers are more affluent than Kindle Fire owners, thus leading to more purchases.

If Kindle Fire triggers the level of engagement Amazon required to produce the revenue Amazon needs to make money on the venture, I'm not sure Bezos cares much about any of this. Again, it's not a competition. Amazon likely generated internal models of how much each Kindle Fire user needs to spend to define project success. If that happens, it's all good.

That, however, does not stop Apple from firing off a competitive salvo of its own. And, if I work in brick-and-mortar retail, I'm on the phone asking Apple to fleece me like it did the music industry and wireless carriers. For many retailers, growth and, in some cases, survival depends on it.

As long as it exerts its typical high level of control over the process, Apple should include a "Shopping" app on its iPad. The app would feature a handful of merchants, potentially on a rotating basis. For every sale generated, Apple takes a cut.
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