Sunday, April 5, 2009

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 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.


lukhnos said...

Nicely said.

Kindle has a few problems or negative (at least non-positive) perceptions. It's not a sexy device. You seldom see people in public places using it (compare: how many iPhones can you spot on any ride on NYC subway or BART?) And Amazon/Lab126 doesn't talk to developers—it's not intended as a platform in terms of both software and content.

I'm happy with my Kindle 2 because as a non-native speaker of English living outside the US it fills a need of mine—access to new books fast at a reasonable price. But it's a niche demand. On the other hand, the way Amazon markets the device, signals that it's designed that way. It's for people reading NYT bestsellers or popular fictions, not a device you can hack (although that people do) into a Hitchhiker's Guide to the Galaxy. And many of my friends complain that Kindle is not for PDF reading (so no scientific paper, no tech docs), further reducing its appeal to the same group of people that make iPhone such a brilliant consumer electronics device.

But all this boils down to the goal that Amazon sets for itself. And I agree with you to the extent that I think theirs is parochial. On the other hand, only if other fronts (content-wise and telecoms) set fewer constraint, will those devices' iPhone moment (not just iPod moment) eventually come.

Roland Dobbins said...

Since the Kindle app works quite well on the iPhone, what's the point of creating some false dichotomy between the Kindle hardware device and the iPhone?

Cherisa said...

I took a seat on my NJ commuter train last week. The guy seated in the row already had his Kindle open when I took mine out. Across the aisle, a woman took hers out. Three in one row - that was pretty amazing. Seeing more in the wild, though it's still remarkable.

Joe Wikert said...

Hi Roland. I don't mind reading portions of Kindle editions on my iPhone but I still do most of my Kindle content reading on the Kindle itself. I suspect that's true for most people who own both devices.

dsegel said...

Using Google statistics to judge the relative impact on the world of the Sony Reader and the Kindle is a guessing game at best.

Try doing your search test again with quotes around the two terms ("amazon kindle", "sony reader") and you get different results, as one would expect given that "reader" is an awfully common word. In the case of simple number of pages returned the Kindle absolutely kills the Sony Reader.

More interesting perhaps is what happens if you search for "sony reader -kindle" (without the quotes). When I do it that way I actually get *more* results than when I search for "sony reader" alone. Does this mean that most references to the Sony product are comparisons against the Kindle?

(BTW, I posted this once already but it ended up attached to the wrong post - the 1980's Thinking post instead of this one. Can you delete the other comment?). said...

When I got my Kindle last November, I was the only person I knew who had one; one friend had a Sony. Now I know 6 people who own Kindles (all Kindle 2s because they were out of the first series for so long). I still only know one person with a Sony. Also, the other night I heard the Kindle mentioned in a sitcom as a desirable thing to own.
Jeff Bezos is a pretty smart guy.

sent from:

Roland Dobbins said...

That's not true for me. I love the Kindle app on my iPhone, and have read several books using it. If the Kindle app for iPhone had been available back in November of 2007, I never would've bothered to buy the hardware Kindle, heh.

Anonymous said...

Switch to U.S. as the target region (the only place the device is available) and the results are pretty much on top of one another. That would tell me that the only reason it isn't a market leader is the limited geography (which itself is a function of the integrated networking).

Robert said...

The Kindle has some problems, at least the way the e-books are being formatted. I have seen many examples of e-books with non-functional indexes - no location numbers - and footnotes in the text that are not linked to back matter. Many popular books still have references to page numbers in the e-text. Not only that, but maps and charts, not to mention appendices, are often garbled and unreadable. There's no excuse for that. I have emailed Amazon about this and have been told "That's not our problem. We just sell what publishers give us."

The potential of the Kindle won't be realized until Amazon cares what the content looks like and how well it works.

Cathy said...

I think one problem with comparing Google trends is that if someone wants an "Amazon kindle", they know to go to Duh. but if someone wants a Sony reader... who knows where the best place is to shop for them. So they do a google search.