A Bold Prediction
By Joe Wikert
I’m not convinced Amazon has a long-term commitment to the Kindle hardware business. In fact, I’ll go so out on a limb and predict that Amazon will completely exit the Kindle hardware space within the next 3 years. Here are a few reasons why:
Zero evolution in 2 years. Compare today’s Kindle 2 and DX models to the original Kindle. The current versions have pretty much the same functionality as the original. And don’t tell me native PDF support was a big change…that should have been there from the start! I had totally different expectations when I opened my Kindle v1 and saw the “experimental” features. Two years later, nothing is new there and the original experimental features never changed. Here’s a great example of how there’s been no feature evolution: We’re all waiting anxiously to see if Amazon will actually add folder functionality. Are you kidding me?! That’s another feature that should have been there all along.
Amazon isn’t a hardware vendor. Hardware isn’t Amazon’s specialty. Far from it. Just look at the Kindle’s design, UI and how it operates and you quickly realize if this is as good as it gets Amazon has no business in the hardware space. (Btw, how many outstanding software/content companies are also rock stars when it comes to hardware? I can only think of one: Apple.)
Competitors are passing them by. B&N’s Nook is what the Kindle should have been. See details here. I’m not saying the Nook is the answer, but Amazon’s lack of innovation is making it easier for new devices to leapfrog the Kindle.
Closed platforms are dead. Even Apple opens the iPhone platform for extensibility. Amazon should have not only allowed but encouraged third-party extensions and apps for the device. What sort of new and exciting functionality would exist for the Kindle today if Amazon would have created a Kindle app store 2 years ago?
Dedicated readers won’t be the answer, not for mass. Content is still critical, but as my O’Reilly colleague Andrew Savikas recently stated so eloquently, “convenience is king.” Mobile, multi-function devices will rule the day.
I was reading my Kindle during a recent cross-country flight. The passenger next to me said his wife is a big reader and he’s thinking about getting her an e-device. He asked me if I recommend he get her a Kindle. Sadly, I said, “no.” I told him he’s better off checking out the upcoming B&N Nook as well as waiting to see if the rumored Apple device ever materializes. That’s the first time I’ve ever recommended someone not get a Kindle when they ask me about mine.
I’m not down on Amazon, btw. I’m forever grateful for the job they’ve done to spark interest in the e-reader space. With all due respect to Sony, If it weren’t for the Kindle we’d still be waiting for the first commercial success in this space.
I had high hopes back in November of 2007 but Amazon is clearly hedging their hardware bet by offering the Kindle iPhone app as well as the Kindle for PC (beta) and Kindle for Mac (forthcoming) apps. That’s a smart move by Amazon. If my prediction comes true and they abandon the hardware space in the next three years they’ll still be a major e-content player.
Editor’s note: The above was taken, with permission, from Joe Wikert’s Publishing 2020 Blog. PB
November 23rd, 2009 at 1:19 pm
Great post! I’ve wondered about Amazon’s future with the Kindle myself. It seems like they are not making any effort to bring the Kindle up to par with other ereading devices.
I have also found it suspicious that they have never released their sales numbers. I’m not sure if other companies keep their numbers under lock and key, but it feels like Amazon is trying to create artificial demand.
B&N Nook might just be the ‘Kindle killer’. But only time will tell.
November 23rd, 2009 at 1:29 pm
Being from Canada and only having access to Sony eReaders, starting with the 505, then the 700, then the 300 before settling on a 600 before I got my Kindle last week I’d have to say the Kindle is actually much better to read, use the dictionary, hold and use in general. In fact, if that person on the plane had asked me the same question I’d have whole heartedly said yes, get your wife a Kindle by all means you can’t go wrong. Still waiting for the iPhone Kindle app to come to Canada. The Kindle is pretty good, pretty, pretty good (as Larry David would say).
All Amazon has to do is switch to the ePub format à la Sony, and I’d be thrilled. I’d sell my Sony eReader and read contentedly all my books from Shortcovers, Waterstones, etc.
November 23rd, 2009 at 1:47 pm
I totally disagree with the premise underlying your post. Although I agree that Amazon has not done much in software upgrades until recently, now they are moving very quickly: International kindle, Kindle for PC, text to speech, full (though clunky brower), upcoming folders- that is a lot.
And if you say that was only triggered by the entrance of the Nook- so what? That’s exactly what competition is supposed to do. It does NOT mean that Amazon gives up and takes its ball home. just the opposite- they are very actively upgrading their product.
And, their customer service remained unsurpassed.
And, no other ebook store compares.
Now, I am aware that you are only talking about the hardware devices, but Amazon has come up with THREE different kindles this year alone. What makes you think they will leave the field? Especially when their product is better than everyone elses. I think your prediction is WAY off base and fundamentally flawed.
November 23rd, 2009 at 2:05 pm
Uh, the only reason the Kindle 1 has essentially the same functionality as the K2 is because they provided a free update to bring them up to parity. Thats more a sign of commitment to the customers than a lack of investment.
As pointed out, Kindle’s evolution this year has been pretty good; K2, DX, GSM K2, KfPC…
If Amazon hasn’t been doing as many updates as some of their competitors its because their reader paradigm is based on the Apple “less is more mantra”. The Kindle may do less (in some areas) than other readers but what it does is rock solid.
Among us techies stability tends to be undervalued. But among mainstream buyers stability is priceless.
No, Kindle doesn’t support every document format under the sun; that is the Hanlin V3 and V5 calling card. And it doesn’t let you teak presentation to your precise taste as Open Inkpot or the Pocketbook line. But it does offer a rock solid competet reader with free wireless access to, arguably, the best online ebook store.
Sorry, but the only real knock on Kindle is their use of DRM and that doesn’t seem to be hurting them none…
November 23rd, 2009 at 2:49 pm
Anyone know when Amazon’s iPhone app will become available to the rest of the world? I can hardly wait to see it up here. And, I’ll be glad when the other 60K books become available in the catalog. I can live with DRM; but geo restrictions are something else which must go.
November 23rd, 2009 at 3:20 pm
joe, you may be right, but i disagree with some of your reasoning. 1. ‘folders’ is a software problem; not a hardware problem. and 2. these devices may now be counted on to leapfrog each other over the entire life-cycle of the category. but without amazon’s initial commitment, no one would be leapfrogging anyone. (i also disagree that the nook has managed to do this — why add a shiny battery-suck to the device. but sony’s definitely on track to get there.)
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.
November 23rd, 2009 at 5:05 pm
I couldn’t disagree more with this post. I recommend the Kindle to all who ask about mine. Amazon is doing a great job. My one complaint is that they haven’t allowed customers to (legally) load DRM-protected e-books on the Kindle or transfer Kindle e-books to Mobipocket. The Nook is an unknown quantity, and Barnes & Noble’s e-book prices are mostly higher than the Kindle Store’s. Also, you can associate multiple Kindle’s with an Amazon account, so the Kindle has better sharing capability.
November 23rd, 2009 at 6:48 pm
I don’t know if Kindle will vanish, but I do agree that the Kindle (piece of hardware) is not the main aim of amazon. I’ve read this kind of thing before, and I believe amazon itself said that they were about the ebooks, not the hardware (though I have no sources for that).
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.
November 23rd, 2009 at 7:45 pm
I have my doubts too, in large part because:
1. The Kindle is as much of a “store on a device” as is is a reading system
2. The “closed system” approach allows for more control over total user experience (e.g. reading, account access, sync, shopping, sharing, customer service, etc) and that control enables the company to provide consumers with a consistent, carefully crafted, easy-to-use, brand-able ecosystem – ala Apple’s iTunes/iPod/appStore combo in the digital space and with some (albeit metaphoric) corollaries to McDonald’s in the meatspace.
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?
November 23rd, 2009 at 10:04 pm
I read approximately 100 books a year and love my Kindle. There are things that can be improved about it but I’d not want to be without it, even if there is an Apple tablet next year, which I likely would buy. However, I do not want to read on a backlit device and can’t see how anyone who reads this much is able to. I never use the internet features of the Kindle. Why would I? My computer or iPhone is much better and faster at this. I have read a little on the iPhone, but only when stuck somewhere without my Kindle. Amazon has bent over backwards to please Kindle customers. Remember, it is the only device that offers a money-back 30 day trial. Maybe Joe Wikert should have sent his back in the first 30 days.
November 24th, 2009 at 2:32 am
Can Amazon afford to abandon this effort? Sure, they’re in a lot of businesses, but books remain at the core of what they do and books, increasingly, mean eBooks. Without the Kindle hardware, would anyone care about the Kindle apps? Not sure.
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
November 24th, 2009 at 7:34 am
I’m not sure if Amazon will be pulling out of the reader market but it’s quite obvious that their main goal is to have control on where the content is purchased.
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.
November 24th, 2009 at 11:41 am
Lost in the debate over dedicated readers versus multifunction is the one reality at the core of the Amazon strategy: the market is big enough for both.
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?
November 24th, 2009 at 12:47 pm
Good discussion, many good points.
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.
November 24th, 2009 at 1:47 pm
Mary – it’s easy to return the Sonys to Borders within the first 30 days. It will probably be the same with the Nook.
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.
November 24th, 2009 at 4:41 pm
Btw, just to be clear… I’m talking only about the hardware side of the business. Amazon will *obviously* continue to push e-content, but I can’t see them selling the devices down the road.
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!
November 24th, 2009 at 11:03 pm
It’s about time they added PDF support. Glad to see better battery life too. Another price drop and I’m buying a Kindle.
November 25th, 2009 at 8:03 pm
I’m pretty happy with my K2, though I would really like a full page pdf reader with cross-document search, and highlighting and annotation to read and store pdfs of scientific journal articles. Don’t know of anything that does that yet. Unless the iLiad allows cross document search now…