Why Isn't Amazon the 800-Pound Gorilla of eReaders?

OK, the Kindle is pretty darned successful. Amazon ran out of stock twice in the first year so maybe they don't need to worry about selling more units. That sounds like a rationalization to me though and I keep wondering why Amazon hasn't tried to turn the Kindle into a much bigger hit.

Other than the Kindle you own, how many have you seen in the wild? For me, the answer to that question is...drum roll please...2. I've been on at least 30 different flights since the original Kindle arrived in November of 2007 and I think I've seen one other person using one on a plane. It's an unfair comparison, but I couldn't even tally the number of iPhones I've seen on those same flights.

As much as we've all assumed Sony's initiative has failed, have you checked Google Trends lately? This is one of my favorite tools and it's quite useful for comparing search popularity between two or more terms. In this case, I'm comparing "Amazon Kindle" with "Sony Reader." Sony has had a lead on the Kindle since shortly after the latter was first released. That gap kept increasing till Kindle 2 arrived earlier this year. But look at how Kindle search activity has died back down and the Sony Reader searches are again comfortably ahead.

Critics have complained that Google Trends isn't an effective tool for this sort of comparison. They say "nobody needs to search for the Kindle since it's right there, front and center on Amazon's home page." Perhaps, but if that were the case, how come so many of my friends and relatives who are loyal Amazon customers have still never heard of the Kindle?!

Amazon is the king of online book sales and yet I feel like they've left the door wide open for a competitor to come in and crush them in the e-reader space. The barrier to entry isn't exactly low but Amazon simply doesn't have the momentum I would have expected by this point.

It seems every time I turn around someone else is announcing plans for a new reader. Why do I get the impression Amazon isn't hungry and aggressive enough to dominate this space? They seem perfectly content to take the slow and steady path, focusing more on customers with the most disposable income and not the mass market.

Here's a link to a story about Rupert Murdoch and speculation about what he wants to do on the e-reader front. Btw, Amazon might not be the hungriest of competitors here, but do you think the newspaper industry is a tad bit starved these days? You have to wonder if they'll awaken and do something really exciting and innovative...or maybe not.

How about this recent NY Times article about Vook.tv? Or this upcoming, "next generation reader," called txtr? Amazon's Whispernet connectivity has always been its key competitive advantage, but how long will it be before someone comes out with something even more powerful at a much better price?

I admit I'm down on Amazon right now. I feel like I spent $360 on a Kindle 1 and although I use it every day I don't see growth potential or an upgrade path for it. My iPhone, on the other hand, features a slew of new apps every week, making it even more appealing today than it was yesterday...and who knows about tomorrow? How long will it be before someone creates an e-reader with that sort of sex appeal? Or does it already exist and it's called "the iPhone"?

P.S. -- I'm heading to Cambridge next week and, among other things, I'm scheduled to meet with the folks at E Ink, the company that makes the displays for the Kindle and Sony Reader. I'm told I'll get to see some next generation display technologies. Assuming I'm not tied to an NDA for the visit I'll be sure to report back on any of the cool stuff they show me.