The Kindle Book Reader: What was Amazon Thinking?

Nov.20.07 | About: Amazon.com, Inc. (AMZN)

By Carl Howe

Technology marketers, repeat after me: Ugly products, awkward user experiences, and restricted content don't sell consumer electronics gadgets.

One more time; I'm not sure it got through the first time.

Now that we're all on the same page, can someone explain to me how Amazon’s Kindle Reader (NASDAQ:AMZN) ever got released to the market when it has all three of the characteristics above that kill consumer gadgets?

That was the mantra that was running through my head as I sat through Amazon's Kindle video. Strangely, the video spent maybe 20 seconds on the concept of reading a book electronically, and then proceeded to dive into all the wonderful features built into the device, like shopping at the Kindle store, pulling data over the cellular network, and looking up words in the dictionary. When a video advertising a e-book reader skips over the device's primary benefit, it's not a mark of marketing prowess.


But the Kindle is even worse than its marketing video because its:


  • Hardware design screams "Blackberry" instead of book. Books are about visually presenting long-form text and pictures. But the Kindle can only display about a paragraph of text at a time on its relatively small screen compared to other products in this category such as the Sony (NYSE:SNE) Reader. If this is an machine designed for reading, why is so much device real-estate dedicated to a keyboard, which is not used for ordinary reading? And the person who added a thumbwheel as a pointing device for Web pages needs to get off their Blackberry and into the real world -- even RIM (RIMM) figured out that they needed horizontal scrolling with the Blackberry Pearl. The strange choices made in the hardware design suggest that it was designed to be a wireless Amazon shopping device that happens to read books rather than the other way around.

  • Unclear purpose hobbles its software. Since book reading software doesn't put a heavy strain on most software engineers (let's see -- we need forward page, previous page, table of contents....), you'd think Amazon would focus Kindle's software on providing access to the widest possible array of book content. But instead, Kindle software focuses on providing access only to a limited number of Amazon-blessed formats. Ironically, the Kindle won't even read many eBooks that Amazon already sells online because they are in PDF format, which the Kindle can't read. And eBooks that other Web sites sell will clearly be non-starters for this device. And worse, Amazon burdened the software with a lot of irrelevant functions such as Web browsing and email fetching that add cost and complexity while diluting the device's market position.

  • Content restrictions pose future problems. Amazon has wrapped its content in digital rights management software that prohibits normal "first-sale" book usage like loaning, resale, and viewing on other devices. And what will happen when Sprint decides to upgrade the Whispernet (really garden-variety cellular EVDO) to a higher-performing network, just as AT&T (NYSE:T) did with its old TDMA network? Because there's no computer involved, Kindle owners will then be reduced to moving around Amazon-proprietary files via SD memory cards -- assuming they can still get these Amazon-proprietary books from from anyone -- or relegating their $400 device to paper-weight status.

  • Price doesn't add up. The Kindle reader costs about the same as 20 hard-cover books from Amazon -- more than a year's worth of reading for most US adults -- but comes without any bundled content. And Amazon has snuck in some clever little fees into its service. Examples include a $0.99 to $1.99 monthly subscription fee for blogs, a $0.10 per attachment format conversion fee for emailed documents, and $9.99 to $14.99 monthly subscription fees for newspapers. The result: suddenly a low-cost hobby of reading books and magazines costs as much as an iPhone with an unlimited data subscription -- yet without the ability to make calls, get email, or play movies.

Amazon's Kindle is a great example of technology being pushed at consumers without a clear idea of its market or value. In some other market -- perhaps in enterprise software -- an ugly product with an awkward user interface and restricted content might succeed. But with the broad and unforgiving consumer market, it doesn't have a chance. The only surprise here is that Amazon thinks that it does.