Wednesday, August 13, 2008


So Amazon's Kindle e-book reader is tipped by CitiGroup analysts to sell more than 380,000 units in 2008. They also predict that it will be the ‘must have item’ for Christmas and that it will have the same impact as the iPod did in its first year and finally by 2010 its annual contribution to Amazon will be around $1billion some 4% of total revenues.

Lets forget all the other noise and coverage on Adobe, Sony, iLiad and the many readers. Lets forget potential mobile and more importantly online opportunities. What would such a shift as predicted mean to the industry if it were to happen?

If any device is to become a must have, by its nature it is a category killer and others fall by the wayside. So if the Kindle achieves this status what does that mean? We must remember here that the Kindle is an exclusive device in that it is sold by Amazon, communicates with Amazon, gets its content from Amazon and renders only Amazon fed content. We may be wrong and if we are then we apologise, but as we see it today that is pretty much an Amazoniancentric digital world we then have.

If that Amazoncenric were to happen, what alternatives would consumers have? Would they want any? Would retailers be confined to selling second tier products and bad economies of scale? Would all the sing song about epub be mere hot air as the Kindle is not epub today and given its sister company is Mobi why would it want to be (Amazon accept epub files and then convert these to Mobi)?

We have heard the rumours that the Kindle is going to be pushed into the education and academic sectors were it would have to compete with the online world. If this were to happen what would this mean to those sectors and the current channels to market and business model?

Interestingly Amazon has played the US market and not moved to others such as the UK and Europe. They initially did the same years ago with physical books. However what would this unlevel playing field mean to the development of digital content and would it strengthen the US digital offer over UK and Europe and further raise the territorial stakes even within global publishers?

If Amazon has around 20% online market share today then would that increase with the digital sales or would these cannibalise the existing sales? We would assume that the majority would be additional and if anything be at the expense of traditional channels. So we have a gorilla with potentially approaching 25% global market share. What does that mean and what impact does that have on relationships, margin and can it start to ignite their growth re the economies of scale and scope it would enable?

Forget whose technology is better, who has the most content, who even has the best price, wars are often won by the best strategy and consumer offer and sometimes we must be careful what we wish for.

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