Tuesday, April 29, 2008

BPN 1083 The effect of Kindle

On the Monday before Thanksgiving last year Amazon.com launched the Kindle. I had heard before that time that Amazon.com had not selected the iLiad manufactured by iRex Technologies and wondered why. The launch made it clear that Amazon.com was after another type of e-Reader; one with a keyboard and a Digital Rights Management system. DRM can be delivered on the iLiad but it is not standard.
So Amazon.com surprised everyone with its own model, the Kindle. It is neat, but it is curious in shape. Of course the main feature is digital paper, which dumbfounds everyone who is used to LCD screens. Yes you can read a book on digital paper on the beach in the sun. As far as this Sony nor the iLiad are real competitors, although I hear people still raving about REB 1200.

Did Kindle have any effect on the e-book market? Amazon.com just did not launch an e-book reader. In fact it launched a full business plan. The e-reader could be used for books. But it could do more in comparison to the Sony –trader. It could also wirelessly download newspapers, magazines and blogs. And the service did not get stuck at that point. The offer of books, newspapers, magazines and blogs was priced competitively; although pricing free blogs is still an absolute sin to me.

Yet the Kindle had all the hallmarks for the iPod/iTunes effect. When Apple introduced the iPod, music downlods had a bad image; most of the downloads were illegal and unpaid for. When Apple introduced the iPod and added later iTunes, it offered a complete service to its customers, breaking the mould of illegal downloading. People were willing to pay a reasonable price for a song, which they could download and use. Problem of course is the iTunes fixed format, which makes it hard to play it out on another platform. But all in all, iPod in combination with iTunes helped the music industry tremendously.

But what has been the Kindle effect on the e-book market? Did it bring about a revolution or just a small tidal gulf? As said, Amazon.com had a nice business proposition with a wireless device as the bleeding edge of technology, a good and fair proposal for books, newspapers, magazines and a less fair proposal for blogs. And the assortment of books and respectable newspapers as well as the reasonable prices made the offer attractive enough.

At the announcement Amazon.com told that Kindle had made already a deep impression. I picked up the figure of 10.000 units sold in the first days. Others report at least 2.000 Kindles. I guess it were more units than that. This also brought along the rise of e-books. And not only Amazon.com profited from it, but also Sony, which has been longer active in the market. Sony is even thought to have doubled or even tripled the sales of e-books.

But measuring the iPod/iTune effect with Kindle, Kindle has only made an impression in the US and has stimulated the sales of e-books, even to the point that Penguin starts to get on the bandwagon of e-books. But Kindle has not made any impression in Europe yet. Will Amazon link up with Penguin in the UK by September 2008?

But even so, then Kindle and Penguin would cover the US and UK market, but not the European continental market. Selling hardware is not the problem, but selling a bundle because of the language fragmentation in Europe. The US and Japanese manufacturers see this as a problem as it requires books in many languages. It requires negotiations with publishers per language base. US and Japanese consumer electronics manufacturers see this hardly a challenge. By not introducing the Kindle with an multi-lingual offer of e-books will put a brake on the distribution of e-books on the European continent. All in all, Kindle has lost its momentum for Europe for the time being and offers a commercial window for its wireless digital paper competitor iLiad and indirect digital paper competitors as Cybook and the likes.

Blog Posting Number: 1083

Tags: e-book, e-reader, iPod

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