The Standalone Kindle Won't Stand Alone for Long

amazon-kindle-21Amazon (s AMZN) unleashed its second-generation Kindle device as expected today, and it doesn’t fail to please in the looks and specs department. There’s seven times more memory, advanced eInk capabilities for 16-color grayscale and faster page refreshing, plus an updated design that addresses some of the original Kindle’s shortcomings. The device even reads text aloud. You can now pre-order the $359 device, which starts shipping on Feb. 24.

While I have no doubt the new device will attract some who passed on the first one, I still have to wonder if there’s room for a standalone device whose main strength is tied to a single wireless carrier. Based on sales numbers for eBook software on handsets, I don’t think it’s a stretch to say that there are more phones that can handle eBooks than there are Kindle devices. Of course, without actual sales numbers from Amazon, that’s educated conjecture on my part. However, reports from last October pointed to 395,000 downloads for Stanza, which is just one of several eBook applications for phones. (The Telegraph cites estimates that Amazon sold 500,000 Kindle devices in 2008.)

Sales numbers aside, do consumers really want to carry another device for reading when they can read on a device they’re already carrying, such as phone or notebook? I’ll grant that the reading experience on a Kindle is better than on a handset, but it’s impossible to read a book when you’re not at home and your Kindle is. More often than not, consumers have a multi-purpose handset or computer with them.

Then there’s that “main strength” I alluded to earlier. With the Kindle 2, Amazon has stuck with Sprint’s EVDO service, known as Whispernet. If you don’t have Sprint 3G coverage in your area, you won’t be buying books without wires. For that very reason, I’m surprised the Kindle 2 didn’t incorporate Wi-Fi. In contrast, most phones have Wi-Fi access, as well as 2G/3G, so buying books online is a breeze. This also means that the Kindle is a U.S.-only device for now, which further limits the overall appeal.

The real money for Amazon is in the sales content, and that’s the truly desirable feature here. They know it, too, because they announced at this morning’s launch event that 10 percent of all book sales are now eBook titles. The standalone Kindle is obviously the main driver boosting that number, but I don’t believe it will continue to be the sole driver. Neither does Amazon, based on this excerpt from today’s Kindle press release (emphasis mine):

Amazon’s new “Whispersync” technology automatically syncs Kindle 2 and the original Kindle, which makes transitioning to the new Kindle 2 or using both devices easy for customers. Kindle 2 will also sync with a range of mobile devices in the future.”

Unless Amazon plans to offer several reading devices, which I doubt, it seems to know that its content must be on the hundreds of millions of non-Kindles out there in the future.