Kindle Review – Kindle Fire Review, Kindle 4 Review

It can be confusing to look at everything Amazon is doing – Are they an eBook store? Are they an eReader company? Are they a platform? What are they?

Let’s explore the possibilities.

Amazon want to be the reading device

Clues that Amazon might be focused solely on being the eReader device -

1. Kindle Books are only available on the Kindle and on Kindle apps.  
2. The Kindle does not accept ePub and is a walled garden.
3. Mr. Bezos has said that Amazon are committed to the Kindle and there will be a Kindle 10.
4. They are keeping Kindle sales figures secret.
5. They are building out a service and an infrastructure around the device. The building out of Whispernet and WhisperSync and the patent for the Kindle Electronic Pen all indicate they are dead serious about the Kindle.
6. They are acquiring companies (Touchco) that play into making the Kindle a better device.
7. They spent the better part of 4 years designing the Kindle and coming up with it.
8. Lab126 (the subsidiary that created the Kindle) has been growing a lot and is still hiring like crazy.
9. Amazon are putting in all the effort of creating a Kindle App Store.

The amount of effort Amazon have put into the Kindle and the amount of resources they are committing indicates they are definitely interested in being the reading device.

The Kindle is a direct channel to customers

One of the biggest benefits for Amazon if they become the reading device is that the Kindle provides a powerful channel – Users buy their books mostly from Amazon, users are always connected to Amazon, it’s a 24/7 store that can sell things other than books, Amazon gets a lot more purchase and use information, and it has strong lock-in.

The Kindle is a channel that can bypass the tolls of the Internet – not to mention the competition, the spirit of free, and all the wars of ideology.

The Kindle is also a test of good intent. Customers that are willing to pay $259 for an eReader are likelier to be willing to pay for books and are likelier to buy more books.

All in all there are a lot of exceptionally good reasons for Amazon to be committed to being the reading device and it seems that they are.

Amazon want to be the bookstore

Why would Amazon release apps for the PC, the Blackberry, the iPhone? Why would they release a Kindle for Android for Dell’s new tablet and why would they announce a Kindle for Mac?

There are only two explanations -

1. Amazon want to sell ebooks across all devices and not limit themselves to the Kindle.
2. Amazon view all these apps as pathways to the Kindle.

Clues Amazon want to be the bookstore - 

1. Mr. Bezos saying that Kindle and Kindle Store are two separate businesses and not wedded to each other. 
2. All the apps across different platforms.
3. All the work Amazon have done to get to 400,000+ books and 100+ newspapers.
4. The work to let in independent authors and make the Kindle store stronger.
5. Amazon setting the $9.99 price point and going to war over it.
6. The Amazon and Publisher wars over ebook pricing.
7. Amazon make their money in physical books from selling books – It’s their core competency.

Amazon’s revenue from books is vital to them and they haven’t shown any signs that they’re willing to let go of it.

Amazon are making the Kindle Store into the Amazon of ebooks

They really are – lowest prices, best range, excellent customer service, no hassle returns, free shipping, more convenient than anywhere else, and open 24/7.

Amazon started off selling Books and Books still form a huge share of their revenue. With the Kindle Store they’re setting themselves up to continue to make a lot of money from book sales. In fact they are doing a lot to ensure they get an even larger share of book sales and make even more from book sales -

1. There are no returns and sharing is limited to family members (in effect).
2. You could argue the kindle is just a way to ensure people buy mostly from Amazon.
3. The Kindle and ebooks encourage more buying.
4. Cheaper prices encourage more total buying.
5. Kindle and Kindle Store eliminate most of the middlemen.
6. Amazon is locking every Kindle owner into their Kindle book Libraries.
7. Amazon eliminate or reduce a lot of the costs like shipping, storage, handling, and returns.

It’s an interesting thought - the Kindle as a device to ensure people read a lot of books and buy them from Amazon.

eBooks are a guaranteed bet

The winner with eReaders may find the market unable to expand or become over-saturated. The winner might find that a new technology comes in and wipes out his advantages and market lead.

With eBooks there are no such concerns. Amazon understands selling books and they have the connections, the expertise, and the volume to always win on price and probably also on range. So they’re going ahead and ensuring that they have an app or a device in all the major retail channels of the future – the netbooks, the phones, the eReaders.

It goes well with their physical channels and with each successful channel they increase their overall power and efficiency.

The bottom line is that people may or may not buy an ereader but they will always buy books and the Kindle Store is certainly being built (and set up in various channels) with that in mind.

Amazon want to be the platform

This is a completely different way of looking at things. Underlying the books and the reading devices and the selling of books lies something tangible – an infrastructure. With Physical books it’s difficult for one company to exploit the fact that all of Publishing is built on an infrastructure - It’s difficult because retail stores and publishers and distributors are too well entrenched and there are just too many things to take care of and master.

With eBooks things change - the entire publishing infrastructure can be replaced by a platform.

• Publishers can be replaced by crowdsourcing, intelligent algorithms and service providers.
• Distributors can be replaced by the Internet and Cellular networks.  
• Warehouses can be replaced by servers and hard disks.
• Brick and mortar Stores can be replaced by websites.

In effect you can make all the parts of the Publishing infrastructure more efficient and combine them into a giant platform.

Amazon is building a platform that will prop up all of Publishing 

Publishers and Distributors are doomed because they won’t ever think beyond how they can maximize their share of the pie. Not even to figure out what’s best for users or what’s best for reading or what’s best for publishers and distributors 10 years down the line.

Amazon, on the other hand, seems reluctant to ever think of less than 10-20 years down the line. They seem to have decided that most parts of Publishing are broken and they are building a platform that reconstructs publishing -

1. Authors can’t get published – Let’s let them self-publish.
2. Readers find books too expensive – Let’s reduce book prices.
3. Stores aren’t convenient enough – Let’s bring them to people’s hands.
4. Authors get only 8-15% – Let’s give them 35%. Of course, Apple helped bump this up to 70%.
5. We need more innovation – Let’s start an ereader App Store.

This is perhaps the perfect way to piece together all of Amazon’s actions – the eReader, the book store, the Publishing infrastructure, letting in authors, letting in developers.

At some level it’s a group of people looking at an extremely inefficient system and dissecting it and figuring out how to rethink and recraft each part of it. Of course, it helps that the platform gets to levy a 10% (or perhaps 30%) tax on every transaction.

Amazon want to be all 3 or as many as they can be

Fundamentally, Amazon are trying to get as much as they can while trying to ensure they get at least something -

1. The Kindle Store and the Kindle Apps ensure that Amazon at least preserves its position as a major book retailer.
2. The Kindle expands that and creates a Kindle eco-system that gets readers to read more and stay loyal to Amazon.
3. The Kindle platform is going for the biggest prize of all – All of Publishing. 10 cents profit on every $1 spent on books works out to $2.5 billion a year from the US and who knows how much from the rest of the world.

In a way you can’t expect Amazon not to go for 2. and 3. If they don’t then the eReader companies and the Platform companies will gradually bleed them to death. The easiest way to stay a top book seller is to become the platform for all of Publishing.

Filed under: evolution Tagged: | amazon kindle platform, future of publishing