Jeff Bezos on The State of Kindle

As someone who likes books, especially the old fashioned kind (you know, the ones printed on paper), I was predisposed to disliking (and dismissing) Kindle, the e-reader developed by Amazon. So when Amazon sent me a review unit of the new Kindle 2.0, they were taking a big risk, since I have been vocal about my skepticism in the past. Surprisingly, instead of hating the device, I suddenly understood the disruptive nature of Kindle and its impact on the printed word.

When I received the device, I downloaded a few books, signed up for a couple of magazines and The Wall Street Journal. Call it luck, but I fell sick right in the middle of the review period, and I actually had enough time to read through all the stuff I had downloaded.

The reading experience, while different from the organic nature of the printed word, was  enjoyable. I could clip, make notes, rewind and search through books. It felt more immersive, more interactive. That’s when I started thinking about the new fourth screen I have written about in the past.

Indeed, if you take all the emerging technology trends — multi-touch, wireless connectivity, cheap silicon, better batteries, location-based services and a move toward open-source operating environments — and marry them to the explosion of digital information taking place, what you have is the opportunity for yet another screen in our increasingly digital lives. And suddenly Amazon’s Kindle stops being just another e-book reader.

As luck would have it, I stumbled upon this interview with Jeff Bezos by Charlie Rose. Despite (sometimes rude) interruptions by Rose, Bezos very eloquently articulated his vision for the Kindle and the future it represents. (Watch the video below)

Bezos’ blue sky vision is that all books can be available on demand anywhere, anytime, in any language. He also said he believes the Kindle may help give rise to new kinds of publishing models that involve subscriptions for novels, or new kinds of books that will have multimedia integrated into them. Today, you can’t do video with e-ink, but Bezos explains that he has seen in the labs color technologies with faster refresh that will be able to handle video. “We can do text books with videos and real-time data,” he says.

Bezos went on to say that these changes are good for the publishing industry, and it has to excite the authors and the publishers. Not to mention the economics of the electronic books are so much cheaper than the print. “There will be new kinds of books invented for Kindle,” Bezos said in the interview. “Books will have more real-time and current details…Kindle dramatically shrinks publishing cycles.”

According to Citibank, Amazon sold about 500,000 Kindles in 2008 and they expect about a million Kindles will be sold in 2009. The company will generate about $1.2 billion in Kindle-related revenues by 2010, Citibank Research estimates. (Related post: Why Amazon is bucking the trend)

Bezos clearly has bigger plans for Kindle. In the interview, aired in late February, Bezos talked about Kindle and how Kindle books would show up on the cell phones. You can read books on your phone while standing in the grocery line, and the book will sync to the cloud (and your Kindle device) using the amazing WhisperSync technology. Just as you have a standalone digital camera and a camera on your cell phone, Bezos says you’ll have a Kindle and Kindle books on the cellphone. A few days after the interview aired, Amazon introduced the Kindle app for iPhone/iPod touch. (Related post: Standalone Kindle won’t last long.)

There are about 18 million iPhones and about 7 million iPod touch users, which is a pretty large market into which Amazon can now sell its more than 245,000 (and growing) Kindle books. I think with 25 million additional readers, Amazon can persuade more publishers to sign up for its Kindle program. What Amazon is essentially saying by offering the app is that it is more interested in selling Kindle books than hardware (a strategy quite different from Apple, which was always about selling the iPods first and music later.)

According to Ezra Gottheil, analyst with Technology Business Research of Hampton, N.H., the iPod/iPhone Kindle application “affects more than Apple and Amazon…it signals a change in the publishing industry, just as the iPod changed the music industry.”

TBR believes Amazon is developing readers for PCs, including netbooks, and for other portable devices with large enough screens. Amazon’s key development objective is providing strong enough digital rights management (DRM) to make it difficult for purchasers to share books with other people. Without strong DRM, publishers will not publish on the Kindle system. With strong DRM, Kindle’s expanded market will attract more publishers, and the available library will grow, which will, in turn, further expand the market.

I think this is one more reason why Apple is going to respond with a tablet of its own — soon.


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