Amazon dominates eBook sales, with 87.9% of eBook sales in the UK and 83% in the US. The only competition barely comes from Apple who has less than 10% in both markets.
As a result though, there is little incentive for them to innovate either in hardware or software. Amazon will of course point to new releases etc, but I believe it is much slower than it could be.
On hardware, the Kindle was always the best ebook reading experience. Today though, ebooks are increasingly read on tablets and mobiles with sales of dedicated ebook devices pretty much flat over the past 5 years.
The result is a much poorer experience. The screen is not as great in sunlight and losing yourself in a book is much harder thanks to notifications on tablets and mobiles. Reading is not the focus of these devices and it will take a lot longer for them to evolve to be better reading devices as a result.
On software, Amazon finally integrated itself into Goodreads (who it bought in 2013) and started to build network effects on top of its ebook store. There is so much more opportunity here though. Reading books is not always a solo activity.
Clearly, companies still believe they can win against Amazon though. Walmart last month expanded its grocery partnership with Rakuten in Japan and launched new eBook readers and mobile apps undercutting Amazon. I would be surprised to see it make much of a dent in Amazon’s market share though.