Word on the street

PUBLISHED : Sunday, 02 December, 2007, 12:00am
UPDATED : Sunday, 02 December, 2007, 12:00am

Jeff Bezos, founder and chief executive of internet retail giant Amazon.com, has plenty of reasons to smile. After more than three years of planning, research and development, Amazon recently performed a worthy impression of hype impresario Apple, maker of the iPod, by positioning its new Kindle e-book reader as this holiday season's must-have gadget.

Says Bezos: 'The book lover in me often has asked the nerd in me, 'Is there a way to get the emotions and experiences I love from books, but combined with the possibilities of advanced technology? Can something as evolved as the book be improved?''

Amazon is betting Kindle, which costs US$399, will accomplish that and more. The device - which measures 19.1cm x 13.5cm x 1.8cm and weighs 292 grams - enables users to wirelessly download and read books, blogs, magazines and newspapers. Its sharp black-and-white screen is as easy to read as printed paper, or so it is claimed. The screen uses ink, just like books and newspapers, but displays the particles electronically. It reflects light like ordinary paper and uses no backlight, eliminating the eyestrain and glare common with other electronic displays.

The device is lighter and thinner than a typical paperback and fits easily in one hand yet its built-in memory of 256 megabytes (about 185MB for user content) stores more than 200 average-length titles. Hundreds more can be stored on an optional SD memory card (it supports up to 4-gigabyte of SD memory). With the wireless access disabled, the reader's battery is good for seven days and can be recharged in two hours.

Although electronic books and e-book readers have been around for years - the technology behind the electronic paper display is nearly 40 years old - this niche market segment has never before had an aggressive, heavyweight, technology-savvy retailer such as Amazon to contend with.

Amazon has set up the Kindle Store (amazon.com/kindle), an iTunes-like site that offers more than 90,000 books, about 300 blogs and a wide selection of popular newspapers and magazines to users. The same shopping experience is offered as is in the regular store, including customer reviews, personalised recommendations, 1-Click purchasing and low prices. In addition, users can download the first chapter of most Kindle titles for free. A copy of every book purchased is backed up online, so users are able to make room on their device knowing Amazon is storing their personal library.

The purchasing public appear impressed. 'In five-and-a-half hours, we were sold out of our initial inventory,' says Bezos. Not surprisingly, speculation about Kindle becoming for e-books what the iPod has become in the portable media player market is rife. Experts, however, say it is too soon to make that conclusion.

'Kindle is the kind of user experience that starts revolutions in how we interact with information, but [it is] an ugly device,' says David Felfoldi, co-founder and chief experience officer at United States-based interactive marketing and Web technology firm Vascent. 'Frankly, Kindle looks like a cheap piece of plastic. Rather than smooth and sleek, we have angular and plastic. It reminds us of a handheld fax machine.'

Felfoldi also frowns on the device's US$399 price tag. 'I mean, seriously. There are significant competitors out there for Kindle. For that type of money we'd recommend waiting until the iPhone comes out with better e-book support, which is already being demanded.'

Maintaining growing demand for e-books is also a challenge. 'According to the Association of American Publishers, less than 1 per cent of sales by US publishers in 2005 were e-books, suggesting the Kindle faces an uphill struggle,' says Steven Hartley, senior analyst at British technology research and advisory firm Ovum. 'Certainly Amazon.com is pushing content hard with bestsellers retailing for US$9.99 or less [compared with the average for a hardback of US$25] but Amazon.com's e-books cannot be shared like a printed edition.'

Another obstacle is the fact the Kindle e-book reader and support infrastructure - including the Amazon-subsidised high-speed data network link - are not set up for use in the international markets. If you were to buy a Kindle, there would be no legal way of uploading content to it while you were in Hong Kong, for instance.

Even if there were, 'with no Chinese content, the Kindle would not have much impact in Greater China', says Anthony Ferguson, librarian at the University of Hong Kong, which stores about 1 million e-books - including 400,000 in the Chinese language. Ferguson stresses compatibility as a major issue, as the Kindle's 3G network connection is not supported outside the US. The Kindle wireless delivery system, called Amazon Whispernet, uses the high-speed data network of US mobile operator Sprint. Amazon has purchased wholesale 3G bandwidth from Sprint for Kindle users.

A report from Banc of America Securities says e-books purchased through Amazon are in a proprietary format and cannot be transferred to other devices, another turn-off for potential customers. It also says Amazon's provision of 3G bandwidth free to users 'could negatively impact margins if adoption of Kindle and content downloads are slower than expected'.

Other e-book reader suppliers are being given more attention, especially as market analysts compare the Kindle's performance with that of similar devices. The competition includes Sony's PRS-500 and PRS-505 readers, the iLiad from Dutch firm iRex Technologies, the NUUT from Seoul-based NeoLux, the Cybook from pioneer European e-book reader vendor Bookeen in Paris, the Hanlin eReader from Tianjin Jinke Electronics and the STAReBOOK from eREAD Technology, in Chengdu, Sichuan province.

All e-book readers use the same electronic display technology, called Vizplex Imaging Film, from US-based E Ink Corp. 'E Ink has emerged as the display provider of choice for e-books and other mobile information applications,' says Russ Wilcox, chief executive at E Ink, which also supplies displays for watches, mobile phones and various computing devices.

Stephen Chau, chief technology officer at Hong Kong mobile phone network operator SmarTone-Vodafone, thinks a Kindle-type business model, in which an electronic content provider also supplies e-book readers, could work in the mainland. 'It has a higher chance of success in China,' he says, pointing out that the mainland's communications and broadband infrastructure is expanding, there is plenty of Chinese-language content and the size of the market will provide the needed economies of scale.

In Australia, bookstore chain Dymocks has seized the advantage before Kindle is made available in its market. Chief executive Don Grover says the chain is finalising a deal to offer electronic readers, made by an undisclosed European manufacturer, before Christmas. The Dymocks website stocks about 120,000 e-book titles.

'Gradually, I believe Kindle could be embraced by the more wealthy students and teachers in Hong Kong,' says Ferguson, but added 'people will have to figure out how to download e-books into their device'.

'Last Christmas I bought a Sony e-book reader and I still have to rely on buying books from Sony to have anything to read - but I like the reader a lot.'