Amazon Is Said to Look at Hardware Beyond Kindle
If you look at the job board for Lab 126, the division of Amazon responsible for the Kindle e-reader, you will see a flurry of listings related to electronics hardware, with titles like Supply Chain Project Program Manager, Hardware Engineer and RF Systems Engineer.
Context & Ripple Effects
Amazon's Kindle business enters August 2010 at full throttle: the device sold out completely in late July with no restock date promised, and Stieg Larsson became the first author into Amazon's newly created Kindle Million Club. Yet the roadmap question has been open since Bits asked in September 2009 whether Amazon would go further than selling books on its own device, including whether the Kindle would open to outside developers.
Today's signal comes from the job board rather than any announcement: Lab 126, the Cupertino-area unit behind the Kindle, is posting for Supply Chain Project Program Managers, Hardware Engineers and RF Systems Engineers — roles that point to multiple device programs in design, not just e-reader iterations. That reading is still unconfirmed, and Bezos himself told shareholders in May that a color Kindle was 'a long way out', pushing back on expectations of rapid hardware expansion.
First-order effects
- Lab 126's hiring spree in supply chain and RF engineering means Amazon is staffing up for hardware programs beyond the current Kindle line, converting a single-product lab into a multi-program consumer electronics group.
- With Kindles sold out and no availability date posted, Amazon must balance scarce production capacity against whatever new devices these engineering hires are meant to ship.
Second-order effects
- Apple's iPad, released this spring, set the template for what a general-purpose Amazon tablet would have to match, and an expanded Lab 126 gives Amazon the bench to respond in hardware rather than ceding the category outright.
- Component suppliers and contract manufacturers serving the e-reader market gain the prospect of a second, larger Amazon product line bidding for the same RF and display capacity.
Third-order effects
- If Amazon follows through, it completes the shift from retailer that happens to make one device to consumer electronics maker whose gadgets exist chiefly to lock customers into Amazon content and checkout — a structure where hardware margins matter less than lifetime purchasing.
- A broader device portfolio would also force rivals like Barnes & Noble and Sony, currently competing only on readers, to decide whether they can sustain standalone hardware businesses against a competitor subsidizing devices from retail profits.
The trend: Retailers are turning single-purpose devices into hardware platforms built to capture their own digital-content sales, with Amazon's Lab 126 the clearest test case.