If Amazon does two things, a) drops price and b) continues to rapidly improve their product I think the Kindle could continue to have a very comfortable niche and could in the end either split the book market with Apple or control most of it.<p>Nintendo's massively underpowered Gameboy famously defeated waves upon waves of highly advanced competitors by understanding what the market really wanted (great games and great battery life) and doing that better than the competition. It's much, much too early to say how the battle between the Kindle and the iPad for the book market will play out, but I think if there is indeed a clear differentiator in quality between the Kindle and iPad screen, and the Kindle is truly better for reading, then there might be an opportunity for Amazon to put their foot in the door and show that they have the better product. For folks who are interested in an eBook Reader but already have an iPhone and a Macbook a cheaper Kindle could be the better option than the iPad.<p>At this point I do feel that Amazon may need to get some retail partners and to set up Kindle Kiosks in electronics and drug stores across the world. It doesn't matter if your screen is better if no one can see it first hand, and they're dazzled by the iPad they see in their local Apple store.<p>The other issue that Amazon faces is while they may be able to lower their price and keep a nice spacing between them and the iPad, eventually the price of the iPad will come down and the Kindle will less attractive. Amazon will need to continue to innovate on their technology and seek out relationships to build content that Apple won't be able to get. The announcement of the Kindle SDK is a good first start.