Online retailer Amazon’s Kindle e-book reader has been a testbed for all kinds of broader mobile trends ‘ integration of the device with a web service, in this case buying and downloading books; using some of a cellco’s 3G capacity for a service in which the carrier is invisible and the content provider owns the customer relationship; pushing gadgets optimized for one application.
On all these counts, Kindle was a bold move, but it has performed quite well for Amazon so far, with a reported 500,000 units sold in the US, and the newly upgraded reader is soon to be brought to Europe. But a single-app, single-device proposition has clear limitations, and Amazon is looking to extend its reach, bringing its applications to other hardware platforms, and even making Kindle open source.
When Amazon upgraded the Kindle device last month, introducing a slimmer version and supporting synchronization to cellphones, it was widely expected to port its software system to other smartphones completely. The thinking, apparently, was that serious book enthusiasts would continue to buy the Kindle, which provides a far superior reading experience to that of any phone, and which drives increased book purchasing ‘ but casual readers would at least pay for e-books, at a few dollars a throw, to read on their regular phones. In this way, Amazon could fight against the encroachment of open source and free book reading applications, especially for Android or iPhone.
As with unlimited music deals versus per-track purchases, many analysts are trying to work out at what point it benefits the consumer to invest in a specialized device and service. In one calculation, published by ZDnet, the cost of the Kindle was clearly easily recouped if it replaced textbooks in schools or even for individual students. For consumers, someone buying one book a month from the New York Times bestseller lists, with a mixture of hardbacks and paperbacks, would save about $59.04 on the books alone. But the device costs $395 ‘ to wipe this out within a year, consumers would need to buy about six books a month, which is unlikely outside the ranks of students. This means that e-book adoption among more casual readers will only come if the device cost is halved at least, or a decent reading experience can be replicated on ordinary handsets.
Neither a price cut nor a general smartphone port materialized in February, but the latter is still expected, and Amazon this week made the first step, predictably looking in the direction of the iPhone, one of the biggest drivers of mobile media consumption, and sporting several book readers in its App Store, such as Stanza and Google’s Book Search for public domain literature.
“We are excited to make Kindle books available on a range of mobile phones,” Amazon spokesperson Drew Herdener told The New York Times recently. “We are working on that now.” This week sees the first move, with Amazon releasing a free application that will allow the same e-books and magazines available on Kindle to be read on the iPhone and iPod Touch. The program’s Whisper Sync service keeps track of a reader’s place in their book, even if they move between the Kindle and iPhone.
Amazon has been forced to make one compromise with the writers’ community, though not yet in the area of revenue share (where it takes 65% of the book price, criticized by many publishers as excessive). The Authors’ Guild trade association has slammed the new text-to-speech feature in Kindle 2, saying it would hurt sales of audio books and arguing that Amazon was not compensating authors for the feature, and so was violating their copyrights. The retailer has conceded the point, announcing that it will modify systems to allow authors and publishers to decide whether to enable the function on a per-title basis.
However, it did say in a statement: “Kindle 2’s experimental text-to-speech feature is legal. No copy is made, no derivative work is created, and no performance is being given.” However, like many other companies picking through the minefield of mobile and online content rights, Amazon has seen the value of keeping the content owners onside. “We strongly believe many rights holders will be more comfortable with the text-to-speech feature if they are in the driver’s seat,’ the statement continued.
The revamped Kindle2 is slimline (thinner than the iPhone at 0.36 inches), with a minimal grid keyboard, new button placement and sevenfold increase in storage over the original. Through a five-way controller, the Kindle2 will let users skip to different sections, preview stories and search for words by moving the cursor through the onscreen document. With built-in text-to-speech capability, stories can be read aloud to users. Other enhancements include 25% more battery life, or two weeks of charge; a 16-level e-ink display to turn pages 20% more quickly than the original.
The new device costs $359, the same as the original, plus users pay a fee for any materials downloaded directly to it. The cost of connectivity (via the Sprint network) is built into each download, and Sprint receives a share of the profit. 10% of Amazon’s book sales now go through Kindle in the US. The retailer takes up to 65% of the list price, with most ebooks retailing for $9.99.
CitiGroup expects Amazon to generate $1 billion in sales from the Kindle by 2010, or 4% of its revenue, and calls it the iPod of books.