Amazon.com Inc (AMZN)

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AMZN Amazon Email to Customers Hints at Anxiety Over iPad MiniBY Dow Jones & Company, Inc. — 12:48 PM ET 10/26/2012

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Just hours before Amazon.com Inc. (AMZN) posted a quarterly loss Thursday, the online retail giant emailed a handful of customers a survey about its newest source of agita: the iPad mini.

The highly technical questionnaire, similar to ones the company has sent on other topics in the past, asks customers to rate how Amazon's (AMZN) seven-inch Kindle Fire HD stacks up next to the 7.9-inch tablet Apple Inc. (AAPL) unveiled Tuesday. "The new iPad Mini screen has a resolution of 1,024 by 768, corresponding to 163 pixels per inch," the questionnaire says. "If another device offered a detail of 216 pixels per inch, how would you rate it compared to the iPad Mini?" The comparison is a reference to the Kindle Fire HD, which offers just that resolution, according to "The Unofficial Apple Weblog," which published Amazon's (AMZN) questionnaire.

"It looks like Amazon (AMZN) is trying to figure out if customers want an iPad," says Rishi Shah, a marketing consultant and blogger. The questionnaire tries to gauge how the Kindle fares against the new competition, he says, and even offers a $5 Amazon (AMZN) gift card as a reward for returning it. Despite Apple's (AAPL) efforts to promote all the specifications of its new iPad, Shah says it's unlikely most customers will have strong opinions about technical minutia. (Amazon (AMZN) did not respond to requests for comment.)

The timing of the questionnaire is not so unusual, experts say. It may be the perfect moment to gain a picture of how the $199 Kindle Fire HD will match up against the $329 iPad mini in the marketplace, and to figure out exactly what tablet features are most important to customers. There's nothing "clandestine" about such market research, says consumer advocate Edgar Dworksy. "Maybe they want to get a sense of new features that would be of the most interest," he says. Given that Amazon (AMZN) Chief Executive Jeff Bezos spent a fair amount of time on Thursday's quarterly earnings call comparing the Kindle's specifications to those of the iPad mini, it seems the company is thinking a great deal about Apple (AAPL), says Peter Hildick-Smith, president of market researcher Codex Group. " Amazon (AMZN) is clearly concerned about its growing, direct competition with the world's most highly valued company," he says.

In fact, studies suggest that Amazon (AMZN) may be waging a losing battle, at least in terms of the higher-end tablet market. The iPad Mini has many advantages over other seven-inch $199 tablets, according to a report this week by JP Morgan analyst Mark Moskowtiz. The larger screen size, faster iO6 software and "look- and-feel" give it an edge over cheaper rivals, it says. Since the price gap is also closing between the Kindle and the iPad, "Amazon (AMZN) is gearing up for a features war," says tech expert and blogger Jakob Nielsen.

Write to Quentin Fottrell at [e-mail]

(END) Dow Jones Newswires
10-26-12 1248ET