This morning’s Observer column.

The prospect of the forthcoming battle between these two technology giants has led some excitable analysts to declare that, whichever company triumphs, “the consumer is going to be the winner”. Oh yeah? The reality is that both Apple and Amazon are aiming at the same thing: locking in the consumer to their system. Apple has done this via the iTunes and App Store, which ensures that nothing runs on an Apple iDevice that hasn’t been approved by the company. Amazon’s approach is only slightly more subtle. The Fire comes with only 8GB of memory, which means that most of the content that its users will access will come from Amazon’s Cloud storage. In that sense, the Fire is the ultimate network appliance.

But there’s an added twist. The Fire also comes with a pretty slick browser that loads pages faster than even browsers running on fast PCs. So 100 millisecond (ms) load times are reportedly reduced to 5ms. This is achieved by having the processing done not by the Fire but by remote virtual machines running in Amazon’s EC2 Cloud, and by clever caching and pre-emptive fetching of links. “This means,” writes Jason Calacanis, a well-known internet entrepreneur, “if you’re on the NYTimes.com they have, in their cloud and possibly already on your device, the next five pages you’re going to click on. They know this because the last five folks to hit the NYTimes.com’s homepage opened those pages. These kind of caching services have a ton of privacy implications”…

That’s putting it mildly.

LATER: Came on an interesting report of the thinking of a US market analyst. Horace Dediu. The nub of it is:

Amazon’s margins on the digital goods it will sell through the Kindle are razor-thin. That means it will take a large volume of sales to subsidize the Kindle’s sales cost, encouraging Amazon to wait a long time between updates to the underlying hardware. They’ll need to amortize that cost over several years to make the accounting balance out, rather than pushing customers to buy a new tablet every year or two.

As a result, the Kindle Fire is unlikely to advance rapidly in terms of its technology. Amazon is going to milk as many years as it can out of each generation of the tablet.

We’ll see.