As as free publicity goes, you can’t do much better than getting your product compared to the iPod.
That’s why Amazon will have been delighted earlier this week, when Citi analyst Michael Mahaney likened its e-book reader, the Kindle, to the world’s favourite gadget.
Digital books have been around since the 1990s, but poor technology has stopped them from taking off. Until now e-Books could only be read on mobile phones and PDAs, and customers soon found that ploughing through Jane Austen on a tiny screen wasn’t worth it.
That’s why everyone has been excited by Amazon’s Kindle, which uses e-ink, a new screen technology that eliminates glare and makes digital pages look just like printed ones. The £180 device holds 150,000 titles and is fitted with a wireless modem that lets the reader connect to the Amazon store and purchase new titles.
With few must-have gadgets on the market (save the iPhone 3G), the device is well placed to become a Christmas best seller. According to Mahaney, sales of the Kindle will be around the 400,000 mark before the end of the year, around double Citi’s earlier forecasts.
The bullish predictions don’t end there. Citi reckons that the device will be a cash-cow for Amazon, pulling in revenues of $1bn (£533m) by the end of 2010, and that its early play for the market will ensure it remains the dominant force in the e-Book space. Sources close to the firm say it is planning on pushing into European markets some time in 2009.
Beige and boxy
It isn’t the look of the device that’s generating all the hype. With a boxy shape and beige colour, its design shares more with the desktop computers of yesteryear than Apple’s iPod. But Amazon’s decision to mimic Apple’s business plan by making customers purchase all their e-books from its own online store is getting investors excited.
It shouldn’t be. The device could well be a big Christmas seller in the US, but the real money is to be made from selling hundreds of titles to device owners, and it’s here that Amazon will struggle. The main advantage of the Kindle is that it can carry thousands of searchable books in a package weighing just over 300g (0.66lbs), making it perfect for the likes of academics and students, although it is unlikely that this will be a draw for the average consumer.
If e-books do take off, even if it’s just for the bookworm, it is publishers who will lose out. Sales of out of copyright classics like Shakespeare will take an instant hit if customers can download them for free.
Change the record
The publishing industry will also need to ensure it doesn’t repeat the same mistakes as the record labels. If there’s an appetite for e-books, they must engage with it and make the experience as enjoyable as possible, instead of wasting time and money trying to stop pirates who will always find a way to bypass restrictive technologies. Although the Kindle will not be as big as the iPod, it could soon become the BlackBerry of the academic world. Publishers who ignore the rise of e-books do so at their peril.