The Speculist: Will the Kindle be the next Betamax?

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Will the Kindle be the next Betamax?

That's the question raised by this article at Market Watch.

Amazon's competitors, after fumbling about like the Washington Nationals for the past couple of years, are starting to get their act together. They're moving toward a shared e-book format, called ePub, that's different from the one on the Kindle.

And Allen Weiner, an expert in the e-book business at technology consultancy Gartner, Inc., says he knows that other manufacturers are poised to launch new reading devices with Kindle-style 3G wireless connections. Some may be announced as early as the next few weeks, he says.

Open systems historically dominate over closed systems. We should all be glad of that. But this doesn't mean that Amazon will be stuck with a bunch of unsaleable product as Sony was with the Betamax players.

Had Sony had the capability to quickly update Betamax players to be able to play VHS, they would eventually have done so and the format problem would have been a nonissue. But, of course, that was not possible. There were physical differences between the tapes that could not be changed on the fly.

Right now Kindle ebook readers are locked in. But they are locked in by software that can be easily updated.

Amazon is at the top of the ebook heap now, so let's assume they are smart. So how would a smart company with Amazon's unique position go about maximizing profit with an ebook reader?

They'd start with a product that's better than anything else being offered, but they'd lock it in. This would force the early adopters - people that want or need ebook readers the most - to buy both the reader and the books from Amazon.

Then, step 2, they'd open it up a little. Allow ebooks that are purchased at the Amazon site to be read on another popular device. Something like the iPhone.

Then once competitors start eating into their market share with an open standard they'd move to step 3. They would allow epub and PDF's (or whatever) on the Kindle while continuing to try to sell Kindle-only files at Amazon as long as possible.

Then, step 4, they abandon their DRM'd format and start selling open format ebooks for the Kindle (or anything else) at Amazon.

Right now Amazon is at step 2. How long it takes for Amazon to move to step 3 and 4 has more to do with how successful the competitors are at pushing their new open standard than anything else. We should all wish them success. Open is better for the consumer.

But from a business perspective why shouldn't Amazon encourage the sale of their own device and ebooks with a closed system at this time? Nobody has a similar updatable-anywhere ebook reader. When another company offers a similar device that is also open, Amazon can quickly adapt. The Kindle doesn't face the physical incompatibility problem that Sony's Betamax faced.


Check out my review of the Kindle here, and my bet regarding Kindle-like ebook readers here.

Comments

So, Amazon is letting their competitors determine the timing of events in the Kindle world! How dumb can you get. Want to see what the electronic junk at the back of your closet in ten years lools like: look at a Kindle. I want an open-sourced, color, fast, wireless, multiple format reader that costs $99.95 . I'm waiting until I can get it. I bet millions of others are too.

I just bought my first eBook for iPhone Kindle: Beginning Joomla.

I like it so far, esp the feature that lets you decide: black text on white pages (the default); the reverse; or black text on sepia-colored pages.

I much prefer the 3rd option. I can read it just fine at night, yet the glare is not so much that my eyes start watering like crazy.

Text is legible at the default size, although you can bump it up or down. I'm still kind of getting used to dbl-clicking on illustrations and having to scan them waaaaay up close, but what else can you expect for such a limited screen size? So that's an non-issue for me.

Oh yes....and the Kindle's FREE. Gotta like that (esp after what I paid for the iPhone).

Frederick:

"So, Amazon is letting their competitors determine the timing of events in the Kindle world"

Well, no. Amazon's Kindle was the first to offer 3G buy-a-book-anywhere technology. It was also one of the first to use electronic paper technology that's easy on the eyes.

Will my Kindle be in the back of my closet in 10 years? I sure hope so! It will be right beside every other electronic item I'm using today. By then I might be using a Kindle version 5, or some fast moving competitor's product.

Would I prefer an open system today? Yep.

The point I was making with this post is that what Amazon is doing today makes perfect business sense... for today. When the competitive environment changes, they will be able to quickly open up their system. I suspect that's exactly what will happen.

I could be wrong. iTunes continues to be a success even as (get this) Amazon offers DRM free music at their website.

I had the best Mothers Day . My 3 kids bought me the Kindle 2.
It is the best gift I could have received. I am a Dialysis patient and I bring it with me and read during my 3 hours on dialysis. I use only one arm and the Kindle is perfect for changing pages and going back.

I have read 3 books already and I am taking Kindle with me where ever I go and have to wait I just take it out of my purse and read.
It is the best. I highly recommend KINDLE 2.

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