Kindle 2.0 improvements essential for Amazon

I’m going to start with Amazon’s big advantages and why Kindle 2.0 is bound to sell out. Then I’ll talk about the reasons I feel Kindle 2.0 needs to be significantly better than Kindle 1.0 (even though the leaked pictures hint that it possibly isn’t). I’ve clearly mentioned when points are my own gut instinct (and thus may or may not be valid).

Kindle Advantages, and reasons Kindle 2.0 will Sell Out.

Kindle 2.0 could have no new features and it would still sell out (provided it’s not worse than Kindle 1.0 – and even that might not be enough to stop sales). Here are the big things in Amazon and Kindle’s favor -

  1. There is huge market demand. The prices on EBay, the Kindle being out of stock, the 11-13 week delays, and refurbished Kindles selling out in 1-2 days all point to this.
  2. The Amazon Kindle Reader meets the market demand – that’s the truth. People can point to hundreds of improvements. However, at its core the Kindle is great for reading, nearly every Kindle owner loves it, and it does what’s required.
  3. The trust that Amazon has among customers is great.  In the UK, both Amazon and Amazon.co.uk are amongst the top 5 most trusted brands. In the US, Amazon consistently gets the best or close to the best customer feedback. I feel that this is a huge reason for Kindle’s success.
  4. Amazon’s range of book titles is unmatched.
  5. Amazon’s wireless delivery, coupled with its ‘Always On’ Kindle Store, is a big competitive advantage.
  6. The free wireless Internet is another big competitive advantage.

Reasons Kindle 2.0 needs Improvements

Amazon’s decision to not disclose sales figures is a master move. A lot of the potentially huge competitors (like Apple, Microsoft, Google) have no concrete figures on exactly how many Kindles are sold, how big this market is, and how big it could be. A range – Yes. An exact figure – No. Here are the main reasons a much-improved Kindle 2.0 (and for that matter a Kindle 3.0 that is a technological leap) is essential for Amazon -

  1. Most of all, Amazon needs as many Kindle owners as it can get. Every single customer is a lock-in – and with enough users you’ll literally see the replication of the iPod + iTunes monopoly in books.
  2. Also, just like iTunes is expanding into Movies and other digital content, the Kindle and the Kindle Store can expand into other areas – And the best part is they already have Amazon.com. An iTunes for buying anything :).
  3. There are a lot of smaller competitors, some with dangerously good products – I feel that PlasticLogic is the real long term competitor – the fact that they have no available product is a heaven send. Take a look – 
  4. Even other gadgets are extending their ereading capabilities or adding software – we all know about iPhone apps – now Nintendo DS is getting into the ereader game, and it has 87.88 million units out there.
  5. The big boys are waiting to see what happens before jumping in. Google already has Google Book Search and the digitization project going on. Microsoft is always a threat (think XBox, not Zune). Sony’s already in the market, with a viable product. Amazon has a tangible advantage in having the best available product and having great buzz – it must keep improving the Kindle and keep its advantage.
  6. Trust of its users – There are a lot of people who’ve bought the Kindle based on their trust in Amazon. It’s hard to call hundreds of thousands of people early adopters – However, these are the people using the Kindle, spreading the word, and providing feedback. Amazon owes it to them to keep improving on the Kindle – hardware, software, and the Kindle store.
  7. I feel that any Kindle owners are unlikely to switch sides, given the presence of an equally good competing device. In fact, I’d say even if there was a slightly better competing device, existing Kindle owners would not switch over. The longer Amazon has a clearly better product in the marketplace, the more customers it gets, and the more loyalty it engenders.

I feel that Amazon’s Kindle has stolen a huge lead. The only true competitors are going to be ones that can fight it on technology, usability, and convenience. This narrows down the field significantly. PaperLogic might (and should) morph into a supplier of technology as opposed to an end product. Kindle 2.0 becomes an exercise in maintaining market dominance, getting more and more converts to the ‘Kindle Family’, and getting valuable feedback for Kindle 3.0 all the way to Kindle 10. Kindle 1.0 might have a year’s worth of a lead over the rest of the market – However Kindle 2.0 and Kindle 3.0 might very well be fighting Apple’s iBookReader and a Google Books + PaperLogic hybrid monster by the end of 2009.

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