Amazon will NOT kill the Kindle in 3 years

Joe Wikert has an interesting post where he boldly predicts the end of the Kindle hardware by November 2012 –

 In fact, I’ll go so out on a limb and predict that Amazon will completely exit the Kindle hardware space within the next 3 years.

History repeats itself (Tim O’Reilly in Forbes, Feb 23, 2009) –

 Yet I have a bold prediction: Unless Amazon embraces open e-book standards like epub, which allow readers to read books on a variety of devices, the Kindle will be gone within two or three years.

That was exactly 9 months ago. In a remarkable coincidence Joe Wikert works for O’Reilly.

Here’s a bold prediction of my own. In 9 months someone from O’Reilly will make this bold prediction –

Unless Amazon adds a donkey as an official mascot for the Kindle it will die out in 2-3 years.

Why a Bold Prediction of the Kindle’s demise?

Here are Joe Wikert’s reasons (and my counter-arguments) –

  1. Zero Evolution in 2 years.  Counter: Kindle the service has evolved a lot.
  2. Amazon isn’t a hardware vendor. Counter: Lab 126 is. 
  3. Competitors are passing them by. Counter: Yes, totally. Apple Slate which hasn’t even been announced, supposedly Nook which no one has actually used.
  4. Closed Platforms are dead. Counter: Not my area of expertise though given how terribly it has affected Amazon so far you have a point 😉 .
  5. Dedicated readers won’t be the answer, not for mass. Counter: No one reads any more so you are right ;).

Joe Wikert thinks that Amazon is hedging by offering Kindle for iPhone and Kindle for PC. Actually, Amazon is adding to Kindle as a service – these are add-ons and not rival products or hedges.

Joe Wikert’s prediction has little merit – It’s extremely improbable that Amazon will kill the Kindle. 

Amazon is not going to abandon the Kindle

There are lots of reasons why Amazon isn’t going to abandon the Kindle –

Amazon is #1 in an exploding market 

  1. The market is supposed to grow to 20-40 million eReaders by 2013. It’s exploding. 
  2. Amazon is still #1 – it’s also the only one of the big three wireless ereaders in stock this holiday season. 
  3. Kindle 3 ought to be out by February 2010 or soon after. At that point Amazon will probably take back the clear #1 spot.   

Not only is Amazon #1,

  1. It has a lot of customers with their entire ebook libraries on the Kindle.
  2. Kindle for PC and Kindle for iPhone customers have their entire libraries on the Kindle too.
  3. Amazon has the best ebook store and the best ebook prices – the only eReader these work with is the Kindle.

It’s irrational to expect the #1 company in the eReader space to quit it in the next 2-3 years. The #1 spot is critical and even the #2 and #3 spots in the eReader market are worth sticking around for.

Kindle is as good as the Nook

  1. The Press and people who have been critical of the Kindle love the Nook. It’s their hedge against the Kindle.  
  2. Anyone who has any stake in Publishing loves the Nook because it MIGHT prevent Amazon from dominating Publishing. 
  3. Read my Kindle Vs Nook Review – it has all the facts. It’s a tie. A tie that Kindle 3 will possibly break in Kindle’s favor. 

Perhaps most importantly, the Kindle is available while there is a 6+ week wait for the Nook. Only Steve Jobs can make people wait that long.

Kindle the Service has had a lot of evolution

Zero evolution is rather harsh. Amazon is handicapped because of its dependence on eInk.

Since Kindle 1 we’ve had relatively few hardware improvements –

  1. Expansion with the larger screen Kindle DX with accelerometer. 
  2. Better Screen Resolution. 
  3. Lower Price i.e. $259 instead of $399.
  4. Faster Page Refreshes.  
  5. Thinner device.

That’s not as much as needed. However, consider Kindle as a service and there are lots of additions –

  1. Text to Speech.
  2. Kindle for iPhone.
  3. Kindle for PC.
  4. Syncing across all reading devices.
  5. Expansion to 174 countries.
  6. International WhisperNet (81 countries).  
  7. International Wikipedia.  
  8. Number of books has nearly doubled.

These are also future additions that have been announced –

  1. Free International Browsing. 
  2. Kindle for Mac.  
  3. Folders.

Plus, in 2010 you get a lot of advancements – SiPix and eInk are promising color, PixelQi is looming, and so are Mirasol displays.

Amazon will finally be free to make significant hardware upgrades by end 2010/early 2011.

Amazon has shown a ton of committment to the Kindle

  1. They have a subsidiary, Lab 126, that designs Kindles and other hardware products.
  2. Lab 126 has put up 19 job openings in just the last week.
  3. Lab 126 have hired hardware talent from Apple, Palm, etc. and design talent from Frog Design, etc.
  4. Mr. Bezos has said that Amazon intend to have a Kindle 10 – that’s a pretty bold statement. 
  5. Amazon has filed for patents for a Kindle electronic pen and for advertisements in books.

Amazon have between 1-3 million Kindle owners. Most of whom are bibliophiles and spending a lot on ebooks. Maintaining these lucrative customers and adding more makes a ton of sense.

Amazon are very committed – The first 2 items in their earnings report discussed the success of the Kindle. Not the actions of the company that planned to kill the Kindle in 3 years.

Is it true that dedicated eReaders won’t be the answer?

There are only two ways to answer Joe Wikert’s assumption that multi-purpose devices will win –

  1. You’re right. Since you can’t imagine anyone in their right mind buying a $259 eReader, that does nothing except reading, the Kindle is bound to fail.  
  2. You’re right. The masses won’t read. We’ll be left with nothing except the people who generate $25 billion dollars a year of revenue from books (just in the US), and the people who generate tens of billions of dollars of revenue from newspapers (again, just in the US).

Obviously, Amazon are crazy to be catering to these narrow segments that only account for $50 billion a year in revenue in the US. They should aim for the people who want a multi-purpose device because they hardly ever read and account for less than 5% of this $50 billion dollar revenue stream.  

eReaders are replacing paper, and all types of reading.

It’s not that the scope of eReaders is too small and they can’t counter Apple’s multi-purpose Slate.

It’s that the scope of eReaders is so big that they will replace paper. They are not meant to compete with Apple or for that matter with any other electronic device.

Take all your reading and writing i.e.

  1. Blogs.
  2. Websites.
  3. Books.
  4. Work.
  5. Work documents.
  6. Journals.
  7. School work.

And everything that you read and write and is a page or more.

That is what eReaders are replacing. Think Paper Vs Kindle and you’ll understand why Amazon is making the moves it is.  

Mr. Bezos and Amazon are not going to sacrifice a 300 to 350 million units a year market. Even 20% of that market is worth fighting to the death for.

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