Book Learning — Questions for Jeffrey P. Bezos
Questions for Jeffrey P. Bezos — The Kindle, an electronic reader brought out by Amazon two years ago, has become your company's best-selling product and a great success story. But several rival e-readers are coming out in time for Christmas. What do you think of the Nook, for instance, from Barnes & Noble?
Context & Ripple Effects
Two years after the Kindle's rocky debut — easy buying, hard reading, Amazon's reader has gone from curiosity to the company's best-selling product across all categories, outselling the iPod Touch, the Wii, and Sarah Palin's 'Going Rogue'. Citi estimated in February 2009 that Amazon had moved roughly 500,000 units and was building toward a $1.2 billion business (Citi's 500,000-Kindle estimate).
The timing of this NYT interview matters: Barnes & Noble's Nook is arriving for Christmas, giving Kindle its first serious branded rival, and the syndicated take from TBIResearch — 'For Now, Amazon Is Losing Its Shirt' — frames the open question of whether Kindle volume comes at negative hardware margins. Separately, Amazon has spent months deflecting speculation about opening the Kindle to third-party developers and a rumored UK launch.
First-order effects
- Barnes & Noble's Nook puts a competing e-reader on physical bookstore shelves for the holidays — the first Christmas where Kindle buyers have a walk-in alternative with an established bookseller behind it.
- Bezos is pressed publicly on the Nook at the exact moment Kindle holds Amazon's #1 bestseller slot, making this interview a defensive positioning exercise as much as a victory lap.
Second-order effects
- If TBIResearch's 'losing its shirt' framing is right, competition from the Nook pressures Amazon to keep subsidizing hardware and defend its $9.99 e-book price point (as with 'The Lost Symbol') rather than recoup device costs.
- Barnes & Noble must now fund a consumer-electronics supply chain and software platform alongside retail — a cost structure shift that forces it to compete with Amazon on Amazon's chosen battlefield, the device-and-store bundle.
Third-order effects
- Booksellers are converting into platform companies: the contest is no longer who stocks which titles but whose locked device-plus-e-book-store ecosystem owns the customer relationship, with publishers caught between two dominant buyers.
- Unresolved questions — whether Kindle opens to third-party developers, whether it reaches the UK — signal that e-readers are heading the way of general-purpose app platforms rather than single-purpose readers.
The trend: Dedicated e-readers are turning booksellers into hardware-platform competitors, with the 2009 holiday season as the first head-to-head test between Amazon's Kindle and Barnes & Noble's Nook.