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Look at it this way: if Apple were in the same near monopoly dominant position wrt smart phone as Amazon is wrt ereader, would you expect much iPhone innovation from them? Even having lost market share to android, look how long it has taken them to release a (rumored) larger iPhone. And Amazon is not even in the ereader business, they are in the ebooks and media content business.
It's an exaggeration to say Amazon destroys ereader innovation, but they really don't need to do much to compete as there is no competition. Soon, they will be in the same position as Apple is with the iPod. When was the last time people got excited over a new iPod?
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