Amazon's Kindle Unlikely to Set World on Fire
E-reader may not be cash cow analysts expect.
After analysts expressed high hopes for the company's future, shares for Amazon (AMZN) jumped over 9%, to $88.09, on Monday. While Amazon is widely expected to maintain their industry lead in e-commerce, many believe they'll see an extra boost from sales of the Kindle, Amazon's new electronic book reader which is gaining intense buzz.
It marks the first time in years that something in the literary world has attracted this much attention - without involving a school of witchcraft and wizardry.
Released in November 2007 to compete with the Sony (SNE) Reader, the Kindle already has over 4,000 reviews on its Amazon order page. 76% of users rank it with 4 or 5 out of 5 stars.
Though Amazon hasn't released the official sales record for the device, it's being dubbed "the iPod of the book world," and some predict first-year sales will match those of the popular MP3 player.
Others believe it's wishful thinking to assume John Grisham will ever be as popular as Jay-Z.
The Kindle works like a cell phone -- over a dedicated 3G network called Whispernet -- rather than via wi-fi. Users can choose from over 150,000 titles for purchase and download. Pages are displayed on a black-and-white, glare-free screen; text can be enlarged to suit your needs.
Doodling in the corners and turning the pages into a flipbook, alas, can still only be done in regular books.
Proponents for the e-reader have all but declared paperbacks dead, claiming the future of reading has arrived. However, the relative ease of thumbing through a pulp novel on the subway hasn't been reached quite yet. Aside from a name that's reminiscent of book burning, the Kindle has numerous drawbacks that could prevent any meteoric rise in popularity:
- The downloadable book titles are in a proprietary, DRM-restricted file format. That means no sharing and no access via other e-readers. Media storage has never benefited from low versatility.
- No full support of PDF files. That's kind of like a portable music player not recognizing MP3s.
- Complaints about the ergonomic design have surfaced. Users find it difficult to hold the device without accidentally pressing the side buttons that turn the page. And unlike the iPod, it's damned ugly.
- Yes, it's narrower than most hardcover books - but when was the last time you've rendered a book unreadable by leaving it out in the sun or resting the weight of a full backpack on it?
- If you thought inputting your CD collection into an MP3 player was time-consuming, try scanning every page of every book you own to convert it into readable text. Of course, no one expects the casual reader to do that - but how else can you read the vast collection of books you already have on a Kindle? That's right: By paying $9.99 per title.
Overall, e-readers are an interesting concept. But as long as they're only slighly smaller than laptops and saddled with DRM nonsense, they're unlikely to change the face of technology - or the fortunes of the companies who back them.
For more on Amazon, check out Hoofy and Boo's always astute report.
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