Apple's iCloud Takes Aim at Amazon

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- The entry of two tech heavyweights in the cloud storage space is sure to make Amazon ( AMZN) squirm as Apple's ( AAPL) iCloud will launch on Wednesday, and Google's ( GOOG) GDrive will soon be rolled out.

This shows that competition is very much alive and heating up in the cloud computing market and could pose a threat to Amazon's S3 or Simple Storage Service, a long-time player in the cloud storage space.
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We currently have a price estimate of $240 for Amazon's stock, which is about 11% above the current market price.

See our full analysis for Amazon's stock here.

While there are no clear known specifications as yet for Google's GDrive, Apple's iCloud has already managed to garner sufficient attention right after its release.

There are three advantages with the iCloud that can give Amazon's EC2 a run for its money:

Seamless integration: The iCloud is designed to work seamlessly with the iPhone, iPad, iPod touch, Mac or PC, wirelessly storing content and pushing it all devices automatically. Considering that around 180 million iOS devices were running by early 2011 itself, this provides iCloud with huge scale advantages over Amazon.

Consumer-friendly: The iCloud announcement also comes with a host of cloud-based user-friendly features such as iTunes Match. This feature prevents the need to painstakingly upload music into the cloud as iTunes Match itself creates a library matching the user's existing playlist.

Pricing: While the iCloud provides free 5 GB-worth of storage for documents, mail and back-up for iOS 5 users, Amazon's S3 service charges users for even the first gigabyte of storage space.

Despite the above advantages, there is one big bet Amazon is making for extending its cloud computing reach -- the Kindle Fire.

The tablet employs Amazon's experience in the cloud computing segment using the EC2 (Elastic Cloud Computing) to host applications and data, saving storage space on the tablet. What Amazon needs next is a steeply rising sales curve for the Kindle Fire, which could provide the necessary scale to challenge Apple.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.