1. Notepad for Kindle. Not for Kindle Touch (working on it) or Kindle Fire (completely different development ecosystem, not working on it).
2. Calendar for Kindle. Same as above.
3. Other Kindle Apps like Calculator and Address Book.
4. This Blog (hopefully, it’s well done and not medium rare).
5. Kindle App Review Blog. Maurine is doing a great job here and she has nearly every single Kindle App reviewed.

We also just released a Kindle Game based on Alice on Wonderland. It’s called Alice in Crossed Up Land. You have to match objects from Alice’s World and you can play Match-3 or Match-4 or Match-5 (match either 3 objects or 4 objects or 5 objects).

We also have lots of things that are at various stages of completion i.e.

1. Book Summit. A Social Network for Kindle Owners (lots of authors for some reason).
2. Book Monk. A Kindle Book Search Tool. It’s fallen into a bit of disarray at the moment. However, it’s something I’d be interested in working on if there’s interest from all of you.
3. The Kindle Start Page Maker. Which lets you create a ‘book of links/favorites’ that you can keep on your Kindle Home Page.
4. Kindle Page Number Tool. A tool that lets you convert (approximately) from page numbers to locations.
5. Various projects that haven’t seen the light of day.

************************************************************************************************

Perhaps all of you can help me/us in deciding what would be most valuable for all of you in 2012. The things that are interesting to us as a team are:

1. Curation Engine. Enter in criteria + get a list of books that you can sort and arrange.
2. Crowd-sourced Curation Engine. Here we would give all of you some way of triggering what’s best.
3. Recommendation Engine. Enter in one or more books you like and get suggestions.
4. A site that only features indie author books.
5. Filtering Engine for Free Books. So you could say – I only want to see books that are by published authors and rated 4 stars and longer than 300 pages. The Filtering Engine would bring up all such books.
6. Something Else. 

I will be continuing the blog (and also writing about good free books to the extent possible) but it’s just not possible to manually go through 500 to 700 free books a day. The added issue of there not being any simple way to even look at today’s free books makes it all rather difficult. On top of everything we have the problem of some offers being for 1 day only.

**********************************************************************************************

Please enter your thoughts for this Poll, and I’ll let you know which 1 or 2 projects we decide to focus on in 2012.

Thank you for your time and ideas.

Most of this post will revolve around the assumption that empowering customers wasn’t really what the Kindle was about. It was about freeing customers, and Amazon, from Publishers. It’s a very important distinction because things are beginning to get out of control – in good ways and bad.

What the Kindle was meant to be

iTunes with $10 books. An Amazon Store in everyone’s hand.

Longer Version:

Amazon saw a future for books where physical books would be replaced by digital. That meant two things -

1. Amazon had to move to ensure its stream of book sales revenue was preserved.
2. Amazon had the opportunity to become the platform for all of Publishing.

The latter goal is really what the Kindle was about. Amazon probably has a wall map with the Kindle bubble slowly growing to encompass all of Publishing.

Once the Kindle began to show it was more than just an eReader, Amazon probably realized a few things -

1. Kindle owners bought nearly all their books from Amazon.
2. Kindle owners became Amazon customers and bought lots of things from Amazon – pots and pans and cauldrons and brooms.
3. Kindle owners would buy any other device Amazon produced.
4. Amazon/Kindle could become the platform for all of Publishing much quicker than Amazon had thought.
5. A Kindle owner had an Amazon store in her hand.

Just like the iPod helped turn iTunes into a monster and helped lay the foundation for the success of the iPhone and the iPad, Amazon had found a means to build a Publishing Platform and start something truly big.

Of course, since Amazon sells EVERYTHING, the Kindle is far more important to it than the iPod was to Apple. Imagine if Apple also sold shoes and jeans and kitchen sinks and wireless plans. How much more important would iPod and iTunes be?

Kindle is potentially that important.

The wall map was probably updated soon after Kindle 3 was released – the Kindle bubble was now slowly growing to encompass all of retail. At this point the wall map probably became an exact match of the 2003 Kindle blueprint in Jeff Bezos’ journal.

What the Kindle is turning into

The Internet with $1 books. A store that isn’t yet fully defined.

Longer Version:

Here are just a few of the Publishing related things Amazon probably neither expected nor is prepared for -

1. The Race to $0. It starts with The Race to $1.
2. The Democratization of Publishing. The speed and extent of this have probably taken Amazon by surprise. It doesn’t have Encore ready. It doesn’t have the right controls in place.
3. The impending destruction of the $9.99 price point. It’s truly stunning that from $15 hardcovers we are going not to $10 ebooks, but to $1 and $3 ebooks.
4. Competitors willing to kill themselves and books. If you consider the moves competitors have made, i.e. supporting library books and lending and browser-based books – it’s madness.
5. Users constantly raising their expectations. Everyone seems to have forgotten the world we were in just 2-3 years ago. Now, $1 and $3 and $5 ebooks seem like a birthright to readers. On top of that readers also want lending and reselling rights.

When an existing power structure gets destroyed there’s always the chance the void will be filled not by a kinder, gentler power structure, but by utter chaos.

In terms of the Kindle being the Trojan Horse that helps Amazon take over all of retail the possibilities are still strong. In fact, Amazon might stick with books even if the book market goes to $1 and $3 books – solely to keep its millions of tiny, powerful storefronts humming along.

Kindle as Store is still mostly undefined. The direction Amazon takes the Kindle in will be very, very interesting. Will there be a Kindle Tablet? Will the Kindle become something you get free with Amazon Prime? Will a Color Kindle be added on as the premium, non-free Kindle?

If Amazon really is thinking of the Kindle as a direct, powerful channel to customers, it’ll make nearly all of the following moves -

1. Release a Kindle Tablet that addresses music and movies and games.
2. Drop the Kindle WiFi to $99 soon. Six months after that – bundle it free with Amazon Prime membership.
3. Drop the Kindle 3 black and white model to $125. Release a color Kindle at $199.

Companies regularly pay $100 to $300 per customer in customer acquisition costs. If a free Kindle translates into an Amazon customer who buys books, ebooks, movies, digital movies, kitchen sinks, games, clothes, diapers, carpets, car tools, and garden chairs from Amazon - then giving away Kindles makes a ton of sense.

Every Kindle owner’s path of least resistance is buying from Amazon – not just ebooks, everything. Amazon will probably realize in a few years that the book market is likely to be destroyed. However, it knows that the Kindle is its golden channel to customers - a direct channel so lucrative and important that the lost book market will be a trivial price to pay in return for an excellent shot at taking over all of retail.

At the moment there isn’t really very much going on. We don’t have any eReader app store like Apple’s iPhone app store i.e. an app store that has become as important as the device itself. We don’t have any eReader apps like Facebook apps i.e. apps that have millions and millions of users using them every single day.

However, eReader apps are going to be critically important. This post will go over some of the reasons why. You could also take a look at this excellent post by Kontra at CounterNotions – How Dogma begets Anti-App Myopia.

Let’s start by looking at things that apply to all apps, including eReader apps.

The Power of Apps

Here are a few things apps do -

1. Let users pick the winners. The importance of this can’t be over-stressed. Users tell developers whether or not an app is worth focusing on. They tell every other developer whether an app is worth competing with.
2. Let developers provide value straight to users. Instead of a company adding 10 features in their product, they can have developers offers thousands of features - then users pick what they want.
3. Provide free features. There are costs for the platform. However, the features are all free. There are supposed to be hundreds of thousands of iPhone app developers – Could Apple ever hire that many people? Could it ever get the variety of apps it currently has if all these people worked within Apple and followed Apple rules?
4. Natural Selection. The fittest survive - then they have to compete against stronger rivals, and the fittest from that contest survive. It isn’t who sucked up more to the manager or who said the right things in the team meetings.
5. Create magic customization. Each niche, and in a way each single customer, gets its own set of features.

The list is very, very long.

Fundamentally, an app store means that anyone who wants to provide value to device owners, gets a fair chance. A fair chance that doesn’t cost the app store company anything. No health insurance costs. No salary. No office space. No pain of firing the person if the app doesn’t do well.

It’s very, very low risk and high reward.

Think of eReader Apps as Developers trying to figure out ways to provide value

There’s some resistance to apps because people translate it to mean ‘things other than reading’.

There are a few other ways to translate it – value related to reading, value when in transit, value in terms of convenience, value in terms of customization, etc.

Yes, there will be apps that take away from reading, and those are probably bad. There will, however, also be apps that add solid value.

Right now we have the first few stabs – developers are trying to figure out what Kindle owners want. With time things will get better.

Let’s take a brief detour and look at the concept of 1 company vs 100,000 developers.

Can 1 company compete with 100,000 app developers?

One of the most beautiful things about an app store is that you never know what you’re going to get and you know you’re going to get things that developers really, really want to build.

The first is important because you can’t predict success - You have to take quite a few shots and try out quite a few different approaches before things fall into place. With an app store all of this is being done for you for free.

The second is important because people put in 10 times more work when they’re doing things they really, really love. An app developer making the app of his dreams is 10 times more invested than someone doing something his manager told him has to be done. This shows up in lots of ways, and it’s the difference between a feature that customers absolutely love and a feature they feel is good.

Note the ‘free’ part. Apple has hundreds of thousands of developers working for free to make the iPhone better. That is really what it comes down to.

The ‘Take It or Leave It’ aspect of apps

Something that is never given enough credit is the fact that each and every app is optional.

It’s not a feature you have to live with. It doesn’t even come pre-installed on the Phone. You choose, of your own free will, whether you want it or not.

Think of apps as an array of switches -

1. Each switch turns on some feature. That feature provides some function – which for you is either valuable, useless, or negative.
2. Each switch is totally under your control. You decide which switches to turn on.
3. Each switch has a fail-safe. You can turn off anything that you find is useless or negative. You can turn it back on again if you like.

You get your phone. Then you turn on whichever switches you want and you get a stream of value flowing in. Keep the streams you like, and turn off the streams you don’t.

Developers are simply providing these streams – You control the switch.

You get to construct whatever combination of value you want. You get to change it anytime. You get to turn it all off. You control everything.

eReader Apps as optional features

 Let’s say there are 5 features Suzie’s eReader is missing - 5 features she’d really like. Let’s assume she has the Nook Color.

1. Suzie would like Netflix.
2. She would like an email app. 
3. Suzie also wants a knitting app – one that lets her store photos of her favorite patterns.
4. She would also like a Radio App. 
5. She would like an app that searches for free WiFi.

The twist is that this list is different for every Nook Color owner. Suzie’s husband Jack would like these 5 features – Sports Scores, Stock Quotes, Email, Scrabble, Family Photos.

What should B&N do?

It can’t code each and every feature. No matter what combination of features it picks large segments of users will get left out. It’s already lost out on people who wanted eInk and people who wanted Kindle Store access – It can’t very well keep losing out on customers.

Well, with the Nook App Store it’s letting developers code all these features. Consider the Radio App – Perhaps 1 million Nook Color owners want the app and the developer makes millions, perhaps 1,000 Nook Color owners want it and the app makes $3,000.

From B&N’s perspective – either case is fine. It’s not investing anything. Whether 1 million people get value from the app or 1,000 people get value from the app the bottom line is – B&N invested nothing. Nook Color owners got extra value. B&N sold more Nook Colors because of the app being available.

It’s the ultimate win-win situation with zero risk for B&N.

Each app is an optional feature. In some cases it’s an optional feature 25 people love, and in some cases it’s an optional feature 250,000 people love. In every case it’s an optional feature that improves the Nook Color’s appeal and its value proposition.

Same for the Kindle and Kindle Apps. These are just features and mini-features that are optional and add to the appeal.

By end 2011 we’ll know how eReader App Stores are doing

By the end of this year we’ll have -

1. A Kindle App Store that is nearly 1 and a half years old.
2. A Nook App Store that is nearly 9 months old.

These should be at least a few really good apps in each store. There should also be at least a few very innovative apps in each store.

We’ll have a very good idea of whether or not eReader apps prove to be as powerful and important as apps on other devices.

Which makes you wonder – Why isn’t it used in other devices and for other uses?

There are a few small watch companies making eInk powered watches.

Update: Thanks to Common Sense and Maxine and Russ for some more uses of eInk.

We have a technology that has helped transform Publishing, one that does some pretty amazing things such as not use any power to display an image and power a device to 1 month of battery life. It really should be used for a lot more uses.

What else could eInk be used for?

Let’s make some wild guesses -

1. Displays on other devices.
2. Price Tags in stores.
3. Notebooks.
4. Outdoor displays. Tack on a solar cell to an eInk display and you have a great low-cost display.
5. Posters and even wallpapers.
6. Medical Charts.
7. T-Shirts. D A N C E.
8. Labels to use around the house. Peel a label off one jar, change the caption, and put it on another jar.
9. Reflectors – Switch eInk to all-white when you want more light, and switch to all-black when you want less light.
10. Board Games – Scrabble where you don’t have to place letters on boards.
11. Name Tags.

The one thing that keeps coming up is the lack of color. In fact, once color eInk is cheap and plentiful we might see some drastic changes.

Color eInk Uses

Well, here are a few possibilities -

1. Color eInk instead of Advertisement Posters and Hoardings.
2. Color eInk Sheets handed out instead of flyers.
3. Menus that use color eInk instead of paper.
4. Clothes. Sooner or later someone is going to figure out that clothes that can change color and patterns to match the rest of your outfit are a killer idea.
5. Heating and Cooling. eInk Panels outside houses – In summer they are all white and reflect out heat. In winter they are all black and transfer heat indoors.
6. Replace screens of all sorts.
7. Traffic Lights. Instead of having lights that consume a lot of energy we could use eInk to run lights (at least during the day) using very little energy.
8. Public Signs.
9. Road markings and dividers. eInk reflects so it’s a good candidate. This might be a bit of a stretch.
10. Shipping Labels. Re-use the same label 10,000 times.
11. Accessories. Bracelets that can change color to match your clothes.
12. Color eInk panels and labels built into devices and bags and books – Set your name and address and then you never have to worry about tags and address labels.

I’m still stuck in the box of thinking of eInk as mostly a paper replacement. There have to be more ways of using color eInk. The Arizona State research team is building wearable solar-powered eInk panels for soldiers. There are just so many possibilities.

Why aren’t people implementing newer, other uses of eInk?

In a way all of us readers are helping take eInk to a stage where it is cheap enough to power lots of other uses. Currently, 6″ black and white eInk panels are probably $40 to $60, and 6″ color eInk panels are probably $50 to $100.

We may, in 2 to 3 years, hit a point where the same sized panels are $2 for black and white eInk and $5 for color eInk. At that point a lot of other uses (posters, labels, clothes) become viable.

eReaders are the first market eInk is taking over/creating. Over the course of the next 5 to 10 years we might see eInk show up in a lot of surprising places.

You wouldn’t be able to guess it, given that we have released a grand total of ZERO Kindle Apps so far – However, we’ve been working on Kindle Apps since last March.

It’s a team with some exceptional developers, Sergii and Andriy and Saurabh and Mikhail and Ajit, and some really good designers, Sergey S and Digant. The only failure is me because I haven’t been able to get any of their excellent apps approved.

Thankfully, now we can get some of you Kindle owners to help.

It seems that it’s now OK to have Kindle owners beta test apps and give feedback BEFORE submitting to Amazon. Which is great because we have 26 Kindle Apps - some/all of which will probably never get approved – so at least the beta testers can tell us whether we’re just wasting our time, or the apps are actually adding any value.

If some of you were willing to beta test our apps, I’d really appreciate it, as would the developers and designers. In particular, we could really use the help of -

1. 1 or 2 Kindle DX owners.
2. 1 or 2 Kindle 2 owners.
3. 1 or 2 Kindle 3 owners. More is fine too.
4. 1 or 2 Kindle DX 2 owners.

Once we hear from Amazon on whether the limit is 5 or 10 or 20 beta developers will let you know. I think it should be at least 5. Hopefully it’s 20.

There are a few things we were hoping for -

1. Secrecy. A few of the apps are very dependent on the idea not being leaked so we’d really like it if you could test these apps in non-public places and not tell anyone about them.
2. Forthrightness – If an app sucks, let us know. If an app is great, let us know.
3. Ability to find errors – Which won’t be difficult initially. Anyone with a testing background is super welcome.
4. Ability to put in some time – In a lot of the cases it shouldn’t be an issue as these are good apps and fundamental apps and you’ll be using them quite often.
5. Patience – Only 8 of these apps are ready to ship (in our opinion). The others would just be an exercise in patience – though in some cases they would be worth it.

Here is what we can offer -

1. At this point we’re close to quitting Kindle Apps entirely. So your feedback might be what keeps us making Kindle Apps, which would be a good thing in general since more Kindle App developers means competition and better apps.
2. The coolest apps. There are apps that are nothing like anything you’ll find in any app store. Just a few – but they are there.
3. Lots of opportunity to help improve the apps. Around 8 of the apps are polished, and the rest are diamonds in the rough or perhaps just rocks. Your feedback might be the difference between an app that gets approved or that never sees the light of day.
4. Lots of fun. It’s such a wide variety of apps that there’ll be something for everyone. Whether you want an app for your kids or for work or for passing the time there’s something for you.
5. Free Apps. Plus you get them before everyone else. Plus you get to try out the ones that Amazon never approves.

Also, here’s a bonus poll that I’ve been wanting to put up for a while.

Should I continue to work on Kindle Apps?

It’s pretty frustrating to have a bunch of apps that are pretty much done (in our opinion) and then watch as other apps come out but ours never do.

Hopefully, with beta testers we’ll get an idea of whether it’s because our apps don’t deserve to be released at all, or whether it’s just the fates laughing at us as they sip on pina coladas at the beach in Cabo.

It’s pretty interesting. All we want to do is make apps for Kindle owners and release them and see what Kindle owners think but there seem to be 500 different things we have to get right first. At least with this beta test thing we can get feedback from Kindle owners.

Even if we were pessimistic, it’d be hard to argue that less than 5 million eReaders were sold.

5 to 12 million eReaders is a hugely significant number, and it becomes more significant when you consider it’s really a platform. First, a little on platforms.

eReaders are massive platforms, eReaders are platforms for massive success

Platforms are very powerful things

Apple sold a lot of iPods. Then it came out with new types of iPods. Then it came out with the iPhone. Then new versions of the iPhone. Then the iPad.

It started by selling music, then expanded into apps, shows, movies, and more.

Microsoft sold a lot of Xboxes. Then it released Xbox Live and racked up tens of millions of subscribers. Then it released Kinect and sold 8 million in the first few months.

It’s selling movies and games and arcade games and lots of other things through Xbox. It’s trying to morph Xbox into a family entertainment platform.

Why aren’t eReader companies looking at eReaders as platforms?

Platforms in the sense that they can deliver a lot of services. Platforms in the sense that they are a platform on which companies can build entire empires.

The success of eReaders is a platform

Success of the Kindle is a platform on which entire families of products can be built and sold. Same thing for the success of the Nook.

Kindle owners are likelier to buy a very good Kindle Phone than a very good Android Phone. That’s just a fact of life – Note that we mean ‘on average’, and not ‘every single Kindle owner’. They are also likelier to pick a very good Kindle Tablet over a very good Nook Color.

It’s the same for Nook owners. They are likelier to buy a Nook Color than an iPad. Again, we mean ‘on average’.

B&N is leveraging its existing customer base with the release of the Nook Color. However, Amazon has done nothing of the sort. Why not?

The eReaders themselves are platforms

The Kindle is a platform and a channel.

Currently it’s selling – Books, newspapers, blogs, magazines, apps.

It could be selling – everything via a shopping app, music. If a Kindle Tablet arrives, that could be used to sell movies and TV shows.

Are Amazon and B&N just waiting for the right moment?

You have to wonder whether Amazon and B&N are just racking up sales and keeping their plans secret. Once they hit tens of millions of eReaders, we’ll see the actual platform aspects unveiled -

1. A Kindle Tablet and a Kindle Phone will appear as soon as Kindle Sales hit 15 million. By then the Kindle will have too much momentum to be derailed.
2. B&N will release more devices as soon as Nook and Nook Color hit 5 million sales each. B&N probably wants to sell enough Nooks, and be in a good, defensible position, before announcing new product lines.
3. Amazon will wait until it has 25 million Kindles and Kindle Tablets in circulation before it reveals the blueprint. Why unveil something early – when competitors like Apple and Google can put up blocks and introduce alternatives. Instead, wait until you are close to unstoppable, and then do a proper unveiling.

B&N grew from a few stores to the biggest chain of bookstores. Then it added toys and games. Then it added Nook and Nook Color. It already knows the powers of being a platform, and it knows how to use past success to build new ventures.

Amazon is an even more extreme example. From selling books to selling kitchen sinks. From selling physical goods to selling digital everything. You can be sure it has plans beyond what we might imagine.

eReader customers are your (the eReader company’s) customers for life

Take a typical Kindle or Nook owner and you get a few interesting things -

1. The Kindle or the Nook is the path of least resistance for buying books. There’s no reason it couldn’t be expanded to become the path of least resistance for buying everything.
2. Kindle/Nook is a direct channel to customers. It’s also a store that is with customers nearly all the time.
3. Customers trust Amazon/B&N, and have a relationship with the company. That’s a very, very tough thing to create.
4. Trust, the relationship, and loyalty all grow with every purchase. Visit any forum devoted to one eReader, and you’ll see how strongly people feel about their Kindles and Nooks.
5. Customers want to continue the relationship. You don’t just have a customer – you have a customer that will stick with you unless you make a major mistake.

Quick question -

For an average Kindle/Nook owner, is there any store other than Kindle Store/Nook Store from which the owner makes purchases as often?

The answer is probably No for a surprisingly large percentage of Kindle and Nook owners.

Not only are these customers to whom you have a direct channel - they are also very loyal customers who will stick with you, and whose relationship with you grows stronger every day.

All things being equal, eReader owners will buy everything they can from the eReader company

This doesn’t just apply to books. In fact, that’s the least interesting aspect.

Amazon probably sells a lot more non-ebook things to Kindle owners, than it does to non-Kindle owners. It almost certainly sells a lot more non-ebook things to Amazon customers that are Kindle owners, than to Amazon customers that are not Kindle owners.

Amazon won’t ever release the figures. It’s probably a 100% or higher increase in non-ebook sales.

By selling a user a Kindle, Amazon might be increasing non-ebook purchases by 100% or more. That’s the type of ‘big eReader opportunity’ this post is talking about.

Where’s the iPhone and iPad to go with the iPod (Kindle, Nook)? Where’s the iTunes?

At the moment Kindle and Nook seem content to stay in eReader+eBook land.

Nook Color is a branching out, but it’s still a reading tablet.

Where are the iPhone and iPad equivalents? Is Amazon just waiting to reach a certain figure for Kindle Sales? Is B&N content to keep selling books and only books to its loyal customers? Do Amazon and B&N feel that the eReader market is so big they should focus exclusively on eReaders? Do they first want to cement their dominance in the eReader market?

It makes you wonder.

Now, Teleread wonders whether Amazon has too much power. It’s an excellent topic for an article. It’s also very right, and very wrong, for several reasons.

Yes, Amazon has too much power

If you wanted to build a case, to claim that Amazon has too much power, it’d be easy - provided you ignored the latter half of this post.

You could take all the things Rich Adin at Teleread mentions -

1. Authors and Publishers have the perception that they must sell at Amazon to be successful.
2. Some stuff about censorship I don’t fully understand. Apparently, Amazon’s importance as a retailer means Amazon can dictate what authors should write.
3. The proprietary format of the Kindle.
4. Amazon puts its own interests in front of everyone else. Honestly, everyone does this. Don’t see why this is a reason to complain.
5. The assumption that once Amazon captures the ebook market it’ll increase ebook prices.

It’s a disappointingly short and narrow follow-up on an interesting topic.

If you wanted to strengthen the case that Amazon is too powerful, you could add-on the following things -

1. Amazon has a tremendous capacity to delay gratification and profit. Very few companies have this capacity. This is the one thing that might keep Amazon safe in the midst of overwhelming competition.
2. It’s one of the few companies that actually cares about selling books. It also seems like it’s in it for the long haul.
3. It’s taking the 100 years view – Which means that it has huge strategic advantages over companies that are experimenting with eReaders and eBooks.
4. Amazon makes shopping at Amazon the path of least resistance. Bookstores and Publishers use moral arguments to try to guilt-trip people – Amazon makes things easier.
5. It has great customer service.
6. ‘Kindle = reading’ in most people’s heads.
7. Kindle and Kindle Store both have the lead. In any market, it’s almost impossible to catch the incumbent (please consider all markets you know, and not the 3 or 4 which are exceptions). That’s why B&N releasing a ‘Reading Tablet’ is such a great idea – create your own market.
8. Kindle Reading Apps have a lead. This is a red herring – However, you can throw this in there.
9. Amazon single-handedly created an opportunity for indie authors. Which means indie authors will always value Kindle Store more than they should. Note: Apple is also a real hero here, for getting Indie authors 70% – it’s perhaps as big a contribution as Amazon’s.
10. Amazon has captured the majority of readers of good intent (out of those who have bought eReaders so far). Combine this with the lock-in of a proprietary format, and it’s almost impossible for Amazon to lose the battle to win over and keep readers of good intent.

There’s a very interesting trend here – A lot of these are advantages rivals and commentators won’t even notice.

Amazon makes buying from Amazon the path of least resistance. Amazon reduces friction. Amazon uses the power of the default. Amazon delays gratification. Amazon focuses on building trust and customer loyalty.

These are all invisible things, that happen to be far more powerful than the supposed big issues. People get all worked up about things like DRM, which aren’t really as powerful, while they ignore the real magical stuff.

Amazon, beyond a shadow of a doubt, has a lot of power. However, we can’t ignore the real elephant in the room.

Readers have too much power

The only people paying money for books, in the entire equation, are readers. Publishers had too much power because they managed to limit the supply of what readers wanted. That’s gone now – all the artificial restrictions are gone.

Authors, and Amazon, are completely at the mercy of readers. Publishers are too, but they are unlikely to ever comprehend it, and even less likely to embrace it.

Readers have all the power. All the various moves by Apple and Amazon and other companies (DRM, proprietary formats, closed ecosystems) are not meant to guard against competitors. These are all moves to guard against the infinite power of customers.

Customers could set $5 as the new $9.99, and Authors and Amazon and Publishers would have to agree

Tomorrow morning, readers could get up, take a look around, and decide that they would like $5 ebooks. There’s nothing anyone could do about it. Everyone would have to fall in line.

Amazon was doing a great thing for Publishers and Authors by introducing $9.99. By fighting it, Publishers added an incentive for readers to fight for prices less than $9.99.

The only things saving everyone right now are - readers don’t realize they set the prices, readers can’t bear to delay gratification, readers are loath to suffer any inconveniences.

Readers are blissfully unaware that they have the most control

Consider the Agency Model.

Readers boycotted $14.99 for the most part, and it failed as a price point. Readers couldn’t wait for $12.99 books to drop to $9.99, so $12.99 survived.

Now, most Publishers introduce a new book at $12.99, then reduce it to $9.99 after a few weeks. The prices are completely patterned on what customers will accept. If customers had been more patient - there would be no $12.99. If they had been less patient – there would be $14.99 books.

It’s all based on reader behavior, and readers can choose to control reader behavior.

The Invisible Bonds of Convenience

We’re all human, and anything that makes things easy for us, is very appealing.

Sony assumes we’re robots, and don’t mind going to a computer to get our books. Publishers assume we won’t remember who treated us well.

The only company that’s factoring in the human aspect fully, is Amazon. Almost all of Amazon’s power resides in its ability to realize that people will follow the path of least resistance, and that people want to be treated well.

Is there any company that’s making things easier for readers? Not to my knowledge.

Is there any company that’s treated readers better? Well, Publishers are treating people badly, and most companies are indifferent to how readers feel.

Everyone’s fixated on things like lock-in and DRM – What about the fundamental things like treating customers well?

Amazon is only powerful as long as its the company serving customers best

This is the biggest weakness imaginable. Amazon’s power stems almost completely from its ability to serve customer better than any other company.

It doesn’t have exclusives on most of the products it sell. It doesn’t make most of the products it sells. It’s selling products to customers, and its power stems almost completely from being able to earn customers’ trust, offer them better prices, and make things easier for them.

All a company has to do, to win over Amazon’s customers, is provide an easier path and better customer service. If you look at the companies Amazon buys up, you begin to see a pattern – Zappos.com, Diapers.com. These are mini-Amazons – focused on convenience and customer service to the same degree as Amazon.

There will be a company in the future that will be better than Amazon at customer service, and which will not sell itself to Amazon. At that point, Amazon is in trouble unless it’s built up huge defences.

Of course, a much bigger problem than imaginary companies are the other Giants Amazon has to compete against.

Yes, Amazon is too weak

All the things that make Amazon super-powerful also create opportunities -

1. Amazon delays gratification, so it doesn’t have a cash hoard like Apple, Microsoft, and other giants.
2. Amazon delays gratification, so it isn’t as profitable as some rivals.
3. Amazon is a retailer. It doesn’t have its own products, with the exception of Kindle, and a few experimental product lines like Pinzon.
4. Amazon’s intense focus on customer service is a weakness because customer service is very costly. That person you talk to on the phone, to discuss your Kindle issues, costs a lot.
5. Kindle Reading Apps can disappear instantly. They are an undependable strength.
6. Being #1 in both eReaders and eBooks puts a big target on Amazon’s back.
7. It improves constantly, but that means it often misses out on making revolutionary changes. This is probably its second biggest weakness after the tendency to delay gratification forever.

On top of that we have several huge enemies -

1. WalMart.
2. Apple. Especially if it decides that eReaders are a big enough market for it to create a dedicated product for.
3. Google, if it ever gets really serious about books.

And several smaller, but dangerous enemies -

1. B&N, which might find enough inspiration from its struggles, to steal away a significant portion of the eReader market.
2. Kobo, which is fighting Amazon on price, and has better international reach.

The big advantage Amazon has, is that the giants aren’t very interested in books and eReaders. They simply don’t see the long-term implications of tens of millions of people owning Kindles.

Amazon is stuck in the middle, and wholly dependent on customers

Amazon is a super powerful company that’s stuck between other super powerful companies -

1. It’s absolutely vital for it to get traffic from Google, Social Websites, and the sites around the Internet. 
2. It’s absolutely vital for it to get products to sell from companies making products.
3. It’s rather important for it, that its rivals don’t understand all the key things that make it successful.

In 10 to 20 years, Amazon might become a lot more dangerous. At the moment, it’s very, very dependent on others. 

Amazon is also completely dependent on super-powerful customers -

1. Microsoft, Apple, and Google have products that serve customers’ needs much, much better than competitors’ products - needs that might be as amorphous as company policy, feeling good, and ’1 second faster’. Amazon, except for the Kindle, isn’t really selling any products of its own.
2. It’s the combination of Kindle, Kindle Store, and Infrastructure, which makes Kindle the current #1. The Kindle itself doesn’t hold a huge lead over other reading devices.
3. Customers can get up and go anytime. The only thing keeping them with Amazon is convenience and lower prices. Contrast that with Apple and Microsoft and Google – the second-best product offerings in their niches are so much worse that leaving is almost unthinkable. For this comparison, please consider the average customer’s needs – a normal user can’t learn Linux, and the level of polish Apple’s products have is unmatched.
4. There’s WalMart, and there are lots of good online retailers like NewEgg. For the other giants, there is no WalMart. Customers have a lot of options when it comes to retail. This is another reason why Zappos and Diapers.com were such important acquisitions for Amazon – to ensure it doesn’t let mini-Amazons spring up.
5. Customers have lots of alternatives even in ebooks. B&N is a decent alternative. Leaving Kindle Store would not give you the sort of shock you’d get if you had to leave Google, and depend 100% on non-Google offerings.

The notion that Amazon is getting too powerful is laughable. It’s particularly laughable in ebooks.

eBooks are in the ether, and Amazon isn’t writing them

Let’s say you’re an author – What’s stopping you from selling direct to customers over the Internet? Nothing.

Let’s say you’re a bookseller – What’s stopping you from setting up a website? Nothing.

There are lots of authors selling direct to customers, and lots of companies offering decent ebookstores (Kobo, B&N). Amazon doesn’t have a monopoly over anything. It isn’t writing the books, and it doesn’t have some great distribution monopoly.

If you consider the concessions it’s had to make over the last 12 to 14 months – adding PDF support, giving authors 70%, announcing it’ll add lending, adding reading apps for other platforms – it should be pretty clear that it’s catering to readers. Readers are not catering to Amazon.

Could there come a time, when Amazon is so powerful, that readers have to cater to it?

No. Readers are a lot smarter now. You can’t undo smart.

Amazon is getting 30% from books. It’s paying something for its own costs, and paying something for bandwidth charges. After all is said and done, it’s making 15% or less per ebook sold. That’s hardly the mark of a monopoly. It’s a very smart move – because with scale that 10% or 15% really adds up. However, it’s very, very far removed from a monopoly. You can’t make a monopoly on things like customer service, the path of least resistance, and the power of the default – just a supremely dangerous company.

Perhaps Amazon’s biggest strength is that its biggest strengths are invisible.

However, there are quite a few non-reading related things you can do with it.

Ran into an article that mentioned 5 things – playing games, surfing the Net, using InstaPaper, text to speech, social sharing. Well, let’s see if we can come up with a better list.

Things You can do with Your Kindle

Let’s start off with a rough list -

1. Check your email. You must use the mobile versions of sites. While the big 3 email providers (Yahoo, Hotmail, GMail) work, some of the smaller ones don’t. Your Comcast or RoadRunner email account might not work – Do a search to confirm.
2. Check the News, Weather, Quotes, and Scores. Using mobile versions of sites, you can get access to all these services.
3. Surf the Internet, and read sites and blogs. The Kindle 3′s browser does a decent job of displaying sites. Selecting items and moving around is a pain – but things display fine for the most part. Note that some sites won’t work.
4. Browse Wikipedia. 
5. Listen to Music. It’s designed to be background music, so the only options are to pause/resume a track, and to skip to the next track. However, the stereo speakers let you listen to music if you don’t mind the limitations.
6. Listen to Audiobooks. If you have an Audible audiobook, or audiobooks in mp3 format, you can use your Kindle to listen to them.
7. Convert your books and documents into audiobooks with text to speech. For all documents you add, and for books which don’t have Text to Speech disabled by their Publishers, you can have the Kindle read the book to you.
8. Read Manga. You’ll need a program like Mangle to optimize images for the Kindle. After that, you can read your manga on your Kindle. Kindle isn’t built for this, so the experience isn’t going to be spectacular – it’ll be decent.
9. View Images. You can load up your images, and browse through them. Here too the experience is decent, not spectacular.
10. Play Free Games. Minesweeper and Gomoku are built-in, and are very rudimentary. There are also 4 free Kindle Apps - Minesweeper again, Blackjack, and two word games (Shuffled Row, Every Word).
11. Play ‘Choose Your Own Adventure’ type games. There are 3 Kindle Games of this type, and they’re all paid – Dusk World, Choice of the Dragon, Choice of Broadsides.
12. Play Puzzles and Word Puzzles and Card Games. There are around 20 paid games in the Kindle App Store - They range from NY Times Crosswords to Scrabble to Mahjongg Solitaire.

Those are the obvious things. Next, let’s look at some additional things you can do on your Kindle.

Stretching the Kindle’s usefulness

There are a bunch of additional things you can do, though not always very well, on the Kindle -

1. Check the Time and Date. Press Menu to see the time in the status bar at the top of the page. On the Home Page, type in @t to see the date and time.
2. Upload a blank text document to your Kindle, and use it to type out your grocery list, or to type out notes.
3. Use Kindle for driving directions – Go to the mobile version of Google Maps.
4. Shop. You can obviously buy books – However, you can also use the browser to do other types of shopping. It’s slow and clunky, but doable. The mobile version of Amazon works decently well.
5. Read Sheet Music. You can actually buy sheet music books. You can also upload your own PDFs or images with sheet music.
6. View Knitting Patterns. Upload images of knitting patterns on your Kindle, and use it as a knitting reference.
7. Create a vocabulary list. Whenever you look up a word in the dictionary – highlight it. Then go into the dictionary, and find and highlight other words you want in your vocabulary list. Now, when you are in the Dictionary, you can go to ‘View My Notes & Marks’ in the Menu, and you get your Vocabulary List.
8. Use as a Picture Frame. Use the Kindle screensaver hack to allow your own screensavers. Then put the photos you want as screensavers.
9. Use Read It Later or InstaPaper. During the day/week, collect all the articles you want to read using either of these tools. Then download the articles to your Kindle, and read them later when you have time.
10. Keep a document full of Song Lyrics.
11. Carry user guides for your camera and other devices.
12. Use Kindle as a USB drive. 3.3 GB out of the 4 GB memory is available to Kindle owners – which means you’ll usually have a few GB free, and can use Kindle as a USB drive.
13. Use it for scripts and screenplays.
14. Use it for podcasts and radio shows. You’ll have to download these to your PC, and then transfer them to your Kindle. After that, you can play them like regular mp3 files.
15. Keep travel confirmations and information, such as flight numbers and flight confirmation numbers.
16. Check in to your flight from the Kindle. This might not work for some airline websites.
17. Put in Menus for your favorite restaurants. Put in a document with phone numbers for restaurants and delivery services.
18. Use it as a phone book. Upload a text document that has all your contacts.
19. Keep your workout routine.
20. Search for what’s good nearby. If you’re out, and want to grab a meal – just Google for the closest restaurants. Thanks to Andrys for this tip.
21. For authors – Use it to see what your book will read like. You can take a half-finished manuscript, put it on the Kindle, and get a great idea what it reads like.
22. Download rules for games, when on a trip, so everyone can join in.
23. Use it for trading. Might not work if you’re a high frequency trader.
24. Get a themed skin or cover, and show off your Kindle, and your good taste, in public. Candidates include Monet and Van Gogh skins, and Greaty Gatsby and Great Expectations covers.
25. Use CutePDF to convert a website into a PDF, and read it later.
26. Put travel guides and travel articles on your Kindle for trips.
27. Find cocktail recipes and instructions. You could also check up on hangover cures the next day.
28. Use for study notes.
29. Use for vocabulary lists.
30. Put meditation music on it, and use your Kindle to relax.
31. For Pilots – Use it for aviation charts.
32. Use a translation dictionary with the Kindle. Also, you can collect travel phrases online, copy them into a text document, and put the document on your Kindle.
33. Store genealogy records on it.
34. Store lecture notes on your Kindle.
35. Put the TV schedule on it.
36. Check movie showtimes.
37. Keep a list of emergency phone numbers, and your doctor’s contact information.
38. Keep a list of birthdays.
39. Keep a list of gift ideas, and a gift checklist – mark off gifts that have already been bought.
40. Check reviews and prices using the Kindle’s browser, when you are buying something in a store.
41. Have a speech or a presentation read to you, to see how it sounds.
42. Use your Kindle instead of cue cards, when doing a presentation.

A lot of credit to this excellent thread on ‘Unusual and Unique Uses of the Kindle’ started by Jonathan K. L.

It’s amazing to see all the innovative ways in which Kindle owners are using their Kindles. All the new ways in which you can use your Kindle, from point 10. onwards on the second list, are things Kindle owners have come up with. It just goes to show – You can never predict all the new and interesting uses people will think up for your device.

Let’s take a look at some of the interesting things that happened.

Kindle in January 2010 – Agency Model, iPad, The Wave of New eReaders

January was a month full of big developments -

1. Amazon and Macmillan had a stand-off over the Agency Model. Then Amazon caved in – it couldn’t really do anything since Publishers are the only ones publishing books.
2. iPad was announced. There was a lot of speculation that Kindle sales would stall.
3. We had CES 2010 and a multitude of companies announced eReaders. To give you an idea, of just how many companies were developing eReaders and ePaper, here’s a partial list – BeBook, PixelQi, Qualcomm Mirasol, Alex, Entourage, Copia, Plastic Logic, MSI, Acer, Asus, Hearst, Blio, Bookeen, Fujitsu, Cool-er, Samsung, Skiff.

Things began to look rather difficult for Kindle.

Amazon made a few significant moves of its own -

1. The International version of the Kindle DX was released on January 19th. 
2. Amazon opened up its Digital Text Publishing platform to the whole world.
3. Amazon announced a Beta of the Kindle App Store.
4. It began to get exclusives, including Paulo Coelho in Portuguese.

It was also a month full of Kindle sales estimates, and figures -

1. On January 28th, Mr. Bezos said that Amazon had sold ‘millions of Kindles’. A phrase we would hear again in early December 2010.
2. Analyst estimates for eReaders sales in 2010 varied from 4 million Kindles ( Ming-Chi Kuo, DigiTimes), to 6 million total eReaders (Yankee Group).
3. Amazon was estimated to have 90% of the eBook market.

January was jam-packed with announcements, developments, and more.

The key themes were – Agency Model, iPad vs Kindle, New eReaders vs Kindle.

Kindle in February 2010 – More Agency Model, TouchCo acquisition, Nook and Kobo making Noise

Hachette embraced the Agency Model. Apple emerged as an Agency Model supporter.

Amazon again made some interesting moves -

1. It acquired a multi-touch technology company, TouchCo, and stirred up speculation a touch Kindle, or perhaps a Kindle tablet, was in the works.
2. It started limited enrollment for the Kindle Apps Beta.
3. Kindle Store started supporting Spanish, Italian, and Portuguese books.
4. It struck a patent deal, with the other big Seattle tech company, which included Kindle technology.

Results from two of the Kindle DX University Trials were announced, and would best be described as – A Bright Yellow Slowdown Light.

There were also some general eReader developments -

1. Nook update 1.2 came out, and Nook became a somewhat decent alternative to the Kindle 2. B&N also announced that Nook was B&N’s best-selling product.
2. PVI/eInk, maker of the Kindle’s eInk screen, promised color, touch, and video in 2010. Note: Only Touch was delivered (in the new Sony Readers).
3. Rumors that Kobo eReader was being built by RIMM. A Kobo eReader did launch later in the year – pretty sure it’s not designed by RIMM.
4. We found out that the more expensive Sony Reader Touch Edition outsold the lower-priced Pocket Edition.
5. Vook got $2.5 million funding to keep making videobooks.

The key themes for February 2010 were – Agency Model gaining Momentum, Kindle rivals making noise, Amazon making moves.

Kindle in March 2010 – iPad revealed, Agency Model set to debut

April 1st was set as the date for the debut of the Agency Model. Trust Publishers to pick a perfect date.

Amazon and Kindle related developments -

1. Amazon was awarded a patent for ’1-click’.
2. Kindle for Mac arrived.
3. Kindle for iPad was announced. As was Kindle for Tablets (whatever that is).

In the general world of eReaders -

1. iPad was available for preorders, and sold out. 
2. A lot of new eReaders were announced. A few even started shipping - Alex Reader being one of the more notable ones.
3. Qualcomm was awarded a patent for a folding eReader.
4. PVI kept drumming on the ‘Color eInk by 2010′ drum.
5. John Grisham’s books were made available in ebook format.

Themes for March – Kindle Reading Apps, iPad selling out, Agency Model about to arrive.

Kindle in April 2010 – Nook vs Kindle, iPad vs Kindle, Publishers vs Kindle

The Agency Model arrived. Publishers started off by making a fortuitious pricing mistake – they mistakenly released 28 books at $0.

Lots of Kindle related developments -

1. Kindle owners started a strong $9.99 boycott.
2. Rumors that Amazon was coming to Target – which turned out to be true.
3. Amazon started adding lots of titles to its AmazonEncore imprint.
4. DisplaySearch predicted 3.3 million Kindle shipments in 2009.
5. Amazon announced a Kindle 2.5 upgrade, slated to arrive in May, which would have Folders and improved PDF support.

Amazon also got approval to set up warehouses in Canada – hinting that a Kindle Canada site might open in the future.

General eReader developments -

1. iPad sold close to a million iPads in the first few weeks.
2. Rumors of an iPad Mini started swirling.
3. Nook started selling at Best Buy. It also got a new software upgrade.
4. Rumors of a Nook Lite started.
5. DigiTimes claimed that Nook outsold Kindle in March 2010.
6. News that a newer color eReader from Fujitsu would arrive in 2010, in Japan.
7. There was a report that digital books were accounting for 5% of total UK book sales.

Themes for April – Nook and iPad challenging Kindle, Nook and Kindle Software Upgrades, eReaders in retail stores.

Kindle in May 2010 – Kindle 3 speculation, Reading Apps become important, Kindle rivals threaten

Quite a few developments related to the Kindle -

1. Amazon made improvements to Kindle for PC reading app.
2. Speculation on whether Kindle 3 would arrive in 2010.
3. Kindle for iPad began to do very well. Kindle for iPhone continued to do well.
4. Target said that Kindle flew off the shelves in its Kindle pilot program.
5. Amazon did a deal with Asus to have Kindle for PC pre-installed on some Asus laptops.

There was also a little Amazon-Penguin scuffle, which got sorted out rather quickly.

The eReader World saw lots of developments -

1. Kobo released a $150 eReader.
2. Rumors of a Blackberry Tablet.
3. J. A. Konrath released his ebook version before the print version.
4. Pandigital released a color eReader for $200. Where ‘Color eReader’ means LCD tablet.
5. B&N released an iPad app.
6. Some analysts claimed eReaders would be dead by 2013.
7. Nook Lite got FCC approval.
8. Sony patented a dual touchscreen eReader.

Themes for May – Nook Lite, Kindle rivals, Kindle 3 speculation.

Kindle in June 2010 – Nook WiFi arrives, Kindle price drop, Kindle 3 rumors

This was an interesting month for the Kindle -

1. Engadget leaked news of a Kindle WiFi.
2. Kindle 2.5 was delayed, missed its ‘end of May’ announced release date, and then arrived in June.
3. On June 6th, Kindle became available at Target stores all over the country.
4. Amazon was granted a patent for a tablet-like device with gesture recognition.
5. Amazon added 10 novels to the AmazonEncore Fall 2010 line-up.
6. Improvements were made to Kindle for iPad and Kindle for iPhone.
7. Amazon started pushing refurbished Kindles – hinting a Kindle 3 might be around the corner. There was also a $155 Kindle 2 deal at Woot.
8. Lots and lots of Kindle 3 rumors. Talk of a Kindle 3 release date in July or August.
9. Amazon started hiring a lot of people from the video-game industry.
10. Amazon announced ‘Kindle Editions with Audio/Video’.
11. Kindle for Android was released.
12. Kindle DX 2 was announced at the end of June, 2010. It was priced at $379.

This was also the month that Nook vs Kindle flared up -

1. Nook WiFi was launched for $149 on June 23rd. It was, at the time, the eReader that provided the best value for money.
2. Nook price was dropped to $199. Kindle 2 price was dropped to $189.
3. B&N did a $50 gift card promotion for Father’s Day, to encourage Nook sales.
4. DigiTimes claimed that 1.43 million eReaders shipped in Q1, 2010. It also claimed that 740,000 eReaders shipped in April-May 2010, of which 37% were Nooks and 16% were Kindles.

It turned into an all-out war between Kindle and Nook.

We also had a few other developments -

1. iPad continued to sell very well.
2. J. A. Konrath turned down Publishers to publish a book straight to Kindle.
3. Kindle Store saw a day with 45 book offers.

Themes for June – Kindle vs Nook, Kindle 3 imminent, Nook WiFi plays the price card.

Kindle in July 2010 – Kindle 3 arrives, Kindle WiFi arrives, 70% for authors, Nook 2 at FCC

July was a super-busy, and super-significant, month for the Kindle -

1. At the very end of July, Kindle 3 and Kindle WiFi were announced, and preorders were made available. 
2. Refurbished Kindle 2 dropped in price to $119. 
3. Amazon introduced a 70% cut for authors, on books priced between $2.99 and $9.99.
4. Amazon was taken to court by Discovery Communications. The latter had an eReader patent from a long, long time ago.
5. Andrew Wylie brought a bunch of his authors’ books to Kindle as Kindle exclusives. Note: After a month or so, Mr. Wylie caved in to Publishers, and made them non-exclusive ebooks available everywhere.

Lots of other developments -

1. eBooks supposedly hit 8.48% market share.
2. Lots of buzz about the significance of reading on the iPhone.
3. Nook 2 reached the FCC. As we now know, it was Nook Color. Sneaky B&N submitted the patent application with a Nook image in it and threw off everyone.
4. The iPad hysteria began to fade, and some reporters began to mention - You also need a Kindle for reading.
5. B&N’s financial troubles began to get some attention.

Themes for July – Kindle 3 and Kindle WiFi arrive, Nook 2 at FCC, Authors getting up to 70%.

Kindle in August 2010 – Kindle 3 dominance, Kindle Tablet rumors, Qualcomm wins Color eReader client

August was all about the Kindle 3 -

1. Demand was high for Kindle. Quite a few users were unsure whether they should get the Kindle 3G, or the Kindle WiFi.
2. Kindle 3 preorders were made available. Kindle 3 went out of stock after 5 days. That suggested demand was MUCH higher than Amazon expected - Or that Amazon was using an artificial sell-out to increase demand.
3. Kindle 3 shipped on August 25th. 
4. We found out from Amazon that 80% of Kindle book sales were to Kindle owners.
5. Kindle DX 2 sold out for a bit.
6. Amazon launched the first two Kindle Apps – both were word games, and both were free. 
7. UK got really, really cheap ebook prices.
8. Lab 126, the Amazon division that created the Kindle, started hiring a lot of people who wouldn’t necessarily make sense on the Kindle team – Suggesting a Kindle Tablet was in the works.

In the rest of the eReader World -

1. PVI/eInk claimed 2010 would see over 10 million eReaders sold. 
2. Qualcomm said it had won a major client, and would be investing $2 billion in Mirasol screen production facilities.
3. Rumors of new Sony Readers, with eInk Pearl screens and touch, started circulating.
4. B&N released NookStudy – a software to read textbooks on your PC.
5. Plastic Logic’s Que eReader was infinitely delayed.
6. There were claims that Kindle owned 61% of the ebook market.
7. We got our first $99 eReaders - NewEgg put Foxit eSlick and Astak Mentor on sale for $99.99.
8. Asus got ready to release a $599 eReader. Note: No idea what happened to it.
9. A survey claimed that 11% of the US would be buying an eReader by August 2011.

Themes in August – Kindle 3 doing very well, Qualcomm getting a color eReader client.

Kindle in September 2010 – Waiting for Holiday Season, Freezing, new Sony Readers

A relatively slow September -

1. A Kindle 3 freezing issue flared up, and affected a sizeable portion of Kindle owners. 
2. A Top XBox executive joined the Lab 126 team - Strongly suggesting that Amazon was working on a Kindle Tablet, or a Kindle Phone.
3. Amazon managed to get Kindle 3 into Best Buy and Staples.
4. Amazon came out with its ‘Kindle by the swimming pool’ ad.
5. Kindle 3 had a few stock problems.
6. The first paid Kindle App, Scrabble, was released. It spent a few weeks at the #1 spot.
7. Amazon filed a patent for a device with motion feedback, as well as a few other interesting, potentially Kindle-related patents.
8. It was revealed that Amazon was signing up Android developers, for an Android App Store. Perhaps for a future Kindle Tablet.

A lot happened in the eReadersphere -

1. Sony 350 and Sony 650 were announced on August 31st, and early September was all about Kindle vs Sony Reader. The new Sony Readers were very solid eReaders at very strange prices.
2. Sony did a lot of posturing on ‘quality’ and ‘global strategy’.
3. Qualcomm announced that the first color eReader would arrive in Q1, 2011.
4. B&N saw some major power struggles between investors and the ownership group.
5. UK Publishers started pushing the Agency Model in the UK.
6. Kobo WiFi arrived.

Themes in September – Kindle vs Sony Reader, Kindle 3 Freezing Issue, Amazon’s various moves.

Kindle in October 2010 – Nook Color, claims of 1 million Kindle sales a month, eBooks get traction

Things were still a bit slow in October -

1. There were claims that 1 million Kindles were being sold per month. 
2. Amazon announced Kindle would get book lending by the end of 2010. 
3. Amazon imposed an ‘at most 5 Kindles per order’ limit on Kindle sales. 
4. Improvements were made to Kindle for iPhone.
5. Amazon really went overboard with book offers – 35 in a day, 15 in a day, and so forth.
6. Amazon released a few more paid Kindle Apps.

Wasn’t following general eReader news in October, so don’t have a lot to write -

1. Rumors of a $249 Nook Color. Which were soon confirmed to be true. 
2. We found out that 350,000 ebook copies of Jonathan Franzen’s Freedom had been sold.

Themes in October – Nook Color, possibly 1 million Kindle sales a month.

Kindle in November 2010 – Nook Color arrives, Kindle stock troubles, Black Friday fiasco

Kindle related news and developments -

1. Kindles perpetually out of stock at Best Buy, Staples, and Target.
2. Kindles out of stock – except in the US and UK.
3. Amazon made a mess of its Kindle Black Friday deal. It had a $89 Kindle 2 on offer - Amazon vastly underestimated demand as the offer sold out within seconds. Note: The $89 Kindle offer makes you wonder if the next Kindle will be priced at $89.
4. Lots of speculation that a color Kindle 4 is slated for 2011. 
5. A regular stream of Kindle Apps started showing up.
6. Claims that 800,000 Kindles have been sold since launch.

The rest of the eReader World was pretty busy too  -

1. Nook Color released November 30th.
2. Nook Color press reviews were overwhelmingly positive.
3. News that Hanvon was working on a color eReader. 
4. New Grisham release saw 30% ebook sales.
5. Decision Points sold 50,000 eBooks on Day 1.
6. There was a $100 Nook WiFi deal at Best Buy on Black Friday.

Themes for November – Nook Color, eBooks taking over, Kindle stock issues.

Kindle in December 2010 – Nook Color threatens, 8 million Kindles?

Alleged Amazon ‘insider information’ on Kindle sales stuns everyone, and Kindle gets no love from Oprah -

1. Bloomberg claims 8 million Kindles were sold in 2010, and that 2.4 million Kindles were sold in 2009.
2. Kindle WiFi was briefly sold out in the run-up to Christmas. The white Kindle 3G also sold out a few days before Christmas.
3. Oprah gave Kindle the cold shoulder – If you travel, you need a Kindle.
4. Amazon announced that browser-based Kindle book reading would be arriving, to fight off Google Editions.
5. Amazon released its 4th free Kindle App. The number of paid kindle apps was up to 27 or so.
6. Amazon offered authors Nielsen BookScan data – for no charge.

That 8 million figure, if true, is stunning. No analyst or publication, not even DigiTimes with its contacts in China and Taiwan, got that right.

And outside of Kindle World -

1. Random House ebook sales in 2010 were up 800% in the UK, and 250% in the US.
2. Nook Color kept gathering glowing reviews.
3. B&N’s CEO mentioned that half a million Nook Colors were being sold per month.
4. Google Editions arrived. Indie bookstores got behind it in a big way.
5. Kobo added a Reading Statistics feature, and kicked off a big eBook sale. 

Nook Color turned into the biggest Kindle rival.

Themes in December – 8 million Kindles, Nook Color looms, eBooks take off.

iPad represented an advance of sorts – Using marketing, rather than features, to turn a Tablet into an eReader.

Nook Color might represent a big advance - It’s a ‘Reading Tablet’, and does make an effort to focus on reading. In fact, it’s taken the ‘focus on reading’ theme to such an extent, it’s locked away the Nook Color’s potential as a general Android Tablet.

There aren’t really any big eReader advances on the horizon. We have one long shot - the hope that Nook Color represents an advance - and that’s it.

Where is the next big eReader advance going to come from?

Let’s start by listing all possible sources, and writing down how much of a shot each has of advancing the state of eReaders.

1. A smaller eReader company. That’s got to be a fantasy given how competitive the eReader market has become. 
2. A new ePaper technology. Perhaps. Mirasol and Pixel Qi are promising advances.
3. A software OS company. Not really a possibility as all the eReaders are closed. 
4. An app company. It’s a very narrow window of opportunity - There are lots of restrictions, and apps are basically in a sandbox. It’s very unlikely an app will create the next big eReader advance.
5. An App Store – Could a collection of apps that don’t do much individually, combine to create something big. Perhaps – that’s probably what Amazon and B&N are hoping.
6. Amazon and B&N. B&N is trying something with Nook Color. Amazon will try something to fight back. At the same time, both companies are very comfortable as they are.
7. Apple. Just seeing if you’re paying attention. There is a very slight chance that Apple makes a great iPad 2, and kills eReaders and Reading Tablets. According to the Press, it’s already happened. In Reality, it’s a 2% chance.
8. Google. It might do something – in fact, it’s bound to do something. 
9. Kobo. Well, after the Blue Button eReader, it’s hard to imagine Kobo can create a revolution. A very slight chance.
10. An eReader company from the East. Chinese, Japanese, and Korean companies have been trying out a lot of things. A chance – no idea how much of a chance.
11. Readers. It’s not inconceivable that readers get together, and do something. A very slight chance.
12. A website. It’s possible that a website, such as Groupon or Facebook, does something that ends up playing a big part in the next big eReader advance. Low possibility.
13. An off-eReader software program. Calibre might add a feature, or a brand new software program might spring-up, that pushes eReaders forward. This is the wild card.
14. Publishers. Could Publishers do something huge like force everyone to use one format. Very low chance as Publishers might not realize what it would result in.
15. Regulators. If Amazon and B&N get comfortable in their positions, rival companies might get regulators involved. This is quite likely if one of Amazon or B&N wins the eReader market.

The 5 most likely sources, of the next big advances in eReaders, probably are - A new ePaper company, the Amazon vs B&N competition, Google, an eReader App Store, Regulators. The 2 wild cards are – Sony, off-eReader software.

What are the roadblocks?

There are a few roadblocks that make it difficult for anyone other than Amazon and B&N to create innovation.

1. Closed ecosystems.
2. DRM.
3. An all-on-one solution. Basically, Amazon and B&N provide almost everything. If it were different companies, providing different parts of the ecosystem, we would lose some of the convenience – but we’d also see brutal competition in every area. Rather than complete ecosystems competing, and keeping out all smaller companies, we’d see a huge variety of companies competing.
4. The ebook revenue stream. There’s just too much ebook money on the table for companies to take risks.
5. The huge investment required to produce an eReader.
6. Publishers. They control most of the quality content which means that, in addition to technological and financial hurdles, any new eReader company would have to negotiate successfully with Publishers.
7. General Purpose Tablets – These seem to many to be the end-game for eReaders. A lot of people, who would otherwise take a shot, assume that eReaders can’t survive.
8. The perception that people don’t read any more. It seems to be a remarkably wide-spread belief that people have stopped reading, and that all the bookstores and ebook stores are selling to a grand total of 51 people.
9. Brutal competition. You can take on Amazon with its huge capacity to cut prices, or you can take on B&N with its army of stores. If that weren’t bad enough, both have tens of millions of customers.
10. Misconceptions and Blissful Ignorance. No one knows what the profits are, what number of eReaders have been sold so far, how much money is made per ebook, or the costs of selling ebooks and eReaders.

The last roadblock is particularly interesting.

Three years in, we still have no idea how much money Amazon and B&N are making on eReaders, and how much money they are making on eBooks. Which makes it easy for companies to give in to their ‘there’s no money in books’ mentality. That means a lot of companies that could compete, and which would probably force eReaders to advance, just aren’t jumping in.

Closing Thought – Kindle vs Nook might not be the best thing for eReaders

Instead of vibrant competition, it’s beginning to look like we’ll see Amazon and B&N doing their best Coke and Pepsi impersonation.

None of the bigger companies want to jump into eReaders. The smaller ones have been squeezed out. We’re left with a few companies that might light a fire under Amazon and B&N – Sony, Kobo, and … no one else.

It’s a strange situation - We have an incredibly promising new market, with devices that promise to replace paper, and the only two companies interested are ones that sell books.