And for those of you who love your Kindle, well, I’m pretty attached to mine as well. I’m just not convinced Amazon is going to stay ahead of the crowd and innovate more frequently.

Speaking of which, Richard, you mentioned these items as signs of innovation: “International kindle, Kindle for PC, text to speech, full (though clunky brower), upcoming folders”. Yes, the international Kindle is fairly new but why did it take this long?! The same goes for Kindle for PC and Mac. Again, those are recent developments and seem to support Amazon hedging their bets more than anything, particularly since you can read Kindle content with them without ever having to buy a device. What’s the word on the “full browser”? I’ve heard nothing about that and wonder whether they’ll ever do it because of the bandwidth squeeze Sprint would feel from the change. And folders are just a hope at this point, 2 years into the product’s life!

“Asphalt”, why bother making the distinction between hardware and software on the folders point? Without the hardware there’s no software required to store the books. To your point though, I’m lumping both the device and the device’s software/OS together when I say there’s been no innovation. Seriously, what was the last OS you used that didn’t have folder support? I can’t even name one, and I’m going back to DOS!

Finally, I have to admit it’s been fun watching the online debate about this post. Am I right? Only time will tell, but it’s certainly sparked some great discussion. Thanks to everyone who’s weighed in here and over on my blog! And if Amazon is still in the hardware biz 3 years from now I expect every single one of you to tell me I was wrong!

Joe – I agree with you that Amazon can be seen as hedging its bet, but it can also be seen as keeping the sale of books as its central business.

You seem to be assuming that the Kindle, in its current closed incarnation, only makes sense if Amazon is making money off of the sale of Kindles. I don’t know if they are or not.

But let’s assume that they aren’t. What would be the logical move for Amazon? I say, give them away. Give away the printer, sell the ink.

Maybe what will happen is that Amazon will progressively drop the price of the Kindle, or start bundling it with some other product. What if, when you bought a Mac laptop, you got a free Kindle with it?

I think what’s happening is that the ebook ecosystem is arranging itself into various ebook empires: Borders/Sony, B&N, Kindle, with a number of marginal ereader and ebook sellers that take the crumbs off the table. Meanwhile, Adobe is going to become the cross-platform middleman for text, using ADE, and Apple will be the crossplatform device using the various ebook apps that the ebook empires produce. Amazon will not give up the Kindle, because that will mean reduced sales in this kind of environment.

I agree with Joe in that the reason Amazon got into mp3 and ebooks was they realized they couldn’t go on mailing CDs and books forever…sooner or later digital downloads would take over.

With music, Amazon faced a virtual monopoly in Apple, and went with standard format, DRM-free mp3s. But this strategy has Amazon playing as only a reseller; margins and customer loyalty are their only gains here.

With ebooks, Amazon saw a chance to create their own virtual monopoly, and to this end there are 2 vital prongs: first the Kindle, second the Kindle-format, proprietary to Amazon, and DRM’d.

Amazon really only needs the format to continue to thrive; designing and selling Kindles puts Amazon back in the sell and shipping business, which is what they are trying to get out of in dealing in ebooks in the first place.

The format allows Amazon to be more than simply a reseller. If they can maintain the format without the Kindle, they will do so. But could they? To do that, they must provide Kindle-format reading software on other platforms — PCs, handhelds, smartphones.

That’s the stage Amazon has reached now: ‘platforming out’ the Kindle format. If this is successful, Amazon will drop the Kindle itself. Amazon would probably make that judgment based on comparing sales to Kindles vs. sales to Kindle-reading software on Android, iPhone, PCs, and so forth.

It will probably take a couple of years before that point might come. In the meantime the publishers, all too aware of what Apple did to the music labels, will be promoting epub, and maybe PDF, and maybe some variant of Apple’s Cocktail.

Its not an either-or question but rather of mission suitability in a given situation. That is why Amazon went after iPxx and PC and are going after MacOS and other smartphones over time.
They’re looking to make sure you can read the books wherever you want to.
There is some merit to comparing dedicated readers to mp3 players; both are the high visibility trailblazers of a much larger market that also includes multifunction gadgets. But single function music players are nont going away any time soon and neither are dedicated readers; Moore’s law will make sure of it.
The whole debate will just go away once we low-end readers hit US$99 and show up in blister packs in pharmacies and supermarkets. The technology ensures they can be built (the screens are dropping in price and the electronics are being consolidated; expect a single-chip eink controller/cpu combo within two years if not sooner) and the market is growing fast enough to soak them up.
At that point the debate goes away because the single function gadgets will be priced lower than the multifunction gadgets. Nothing to debate then, right?
After all, would anybody be griping about dedicated readers if all were priced like the eBookwise 1150?

Regarding dedicated readers, I don’t understand why people believe there is no future for them. As Rob puts it, if you want good photo’s then you buy a camera.

We can move this argument in many different areas and ask;

Why buy a console for playing games when a computer can do that and so much more?

Why do millions of people still buy plain and simple MP3 players when they could have a do-everything device?

And, why can I still buy a mobile phone that does nothing but make calls and send plain SMS?

I’m sure we could go on all day like this.

Multifunction devices will always sell more because they are able to appeal to more people, that doesn’t mean there’s no space for dedicated readers.

I’m still up in the air about dedicated readers vs. multifunction. Multifunction makes sense, but it’s hard to have a product that does an excellent job at many things. (I may have a camera in my phone but trust me, if I want good pictures, I use the real camera).

I think Amazon sees this as a must-win. I also think they’ll keep pushing the price points. Do I really want to spend $2K for an Apple tablet that can do everything a Kindle does, with worse battery life and with a UI designed for anything but reading, or would I rather just read?

Rob Preece
Publisher

Granted, this approach, (when using DRM) does mean forgoing selling books to anyone who buys a third party device. It also means no Amazon store on those third party devices. As such, one could imagine a scenario where a more “open” approach is taken in the future (e.g. Store APIs and DRM software SDKs for third party hardware and expanded DRM/format options on the Kindle). Though even if some aspects of that path were taken, it does NOT seem to me that it ultimately leads to getting out of the hardware biz.

On the contrary, the benefits of a well designed ecosystem across software, services and hardware are so great to the end consumer, that if Amazon were to be more open, it only becomes more beneficial to “model” good integration.

After all, if one does not eat one’s own dog food, how would one know if it tastes great while being less filling?

And why should amazon care about the kindle? They’d be wiser to put themselves in a position to sell ebooks to people with any device. Every day new readers are coming out, and I think amazon would be wise not paint themselves into a corner, as it were.

re. ‘dedicated devices’ — i strongly agree that those who read only a book or two a year may find a multitasker more than adequate for their needs. i’m a little more skeptical when it comes to the reader of 20-50 books/year. time will have something to say about that, but at this point i think it’s a little premature to try to predict, because awareness of electronic readers as an option is still fairly narrow.