This Is The Amazon Ad That Scared The Crap Out Of Apple's Top Executives

On November 22, 2010, at 7:55 PM, Apple's Senior Vice President of marketing, Phil Schiller, blasted an email to top Apple executives.

He had just seen an ad from Amazon, and he was not happy.

He emailed Steve Jobs, Eddy Cue, who runs Apple's Internet services, and Greg Joswiak, VP of marketing:

I just watched a new Amazon Kindle app ad on TV.

It starts with a woman using an iPhone and buying and reading books with the Kindle app. The woman then switches to an Android phone and still can read all her books.

While the primary message is that there are Kindle apps on lots of mobile devices, the secondary message that can’t be missed is that it is easy to switch from iPhone to Android.

Not fun to watch.

Steve Jobs replied a few hours later:

What do you recommend we do?

The first step might be to say they must use our payment system for everything, including books (triggered by the newspapers and magazines). If they want to compare us to Android, let’s force them to use our far superior payment system. Thoughts?

GigaOm first dug up this email exchange. It is evidence in the Department of Justice's eBook case against Apple.

A few months after Jobs sent this email, Apple decided to cripple Amazon's Kindle app for iPhones and iPads. Apple said that if Amazon wants to sell a book through iOS, Apple's mobile operating system, then Apple would collect 30% of the sale.

Amazon abandoned selling books straight through its app. Instead, users have to buy a book through the web, then it's sent wirelessly to the app. A bit of a pain, but it doesn't seem to have slowed Kindle sales.

Quartz writer Zachary Seward notes that the larger point from this exchange is that Apple executives realized the oft-discussed eco-system lock-in advantage for Apple is not that strong.

Since this email exchange, Apple's lock-in has only gotten weaker.

Just about every great app for iOS is also available on Android. People are increasingly using services like Netflix and Spotify, which work on both platforms. Those apps make iTunes less powerful, and therefore Apple's lock-in less powerful.

Apple would counter any concerns by saying it has the highest customer satisfaction rate of any smartphone on the planet. And that's the best indication that customers are going to stick with the iPhone.

This seems to be the ad from Amazon that prompted the email:

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.