The Kindle conundrum

"It doesn't matter how good or bad the product is, the fact is that people don't read anymore ... Forty percent of the people in the US read one book or less last year. The whole conception is flawed at the top because people don't read anymore."

This is Steve Jobs' comment when asked about the e-reader in general, and the Amazon Kindle in particular. But then Steve Jobs is noted for making comments like that and then coming up with a device that blows the competition out of the water. Think iPhone, talking about which the latest 3G model had just sold one million in the first three days. In contrast according to a Bloomberg report, James Mitchell, an analyst at Goldman Sachs Group Inc. in New York, estimates that the Kindle sold between 25,000 to 50,000 units in the first three months of it launch. (Jeff Bezos himself refused to divulge any numbers, Steve Jobs was happy to.)

For many, the Kindle is dead -- say the last rites and get it over with. For others, the jury is still out yet, though they are beginning to sound more and more like cheerleaders still moping about on the bleaches about the referee's controversial penalty decision, refusing to leave the stadium, long after the game is over and all the spectators have gone home. Or hedge fund managers trying to talk-up the price of Amazon stock so they can cash out quickly.

In a story posted on Seekingalpha.com titled Amazon's Kindle Numbers: All Fluff, Zero Substance, Preshant Cherukuri writes: "It is very obvious that Amazon's Kindle is a huge flop. In six months of travelling, I am yet to see a single person on any bus, train or plane with a Kindle in their hands. Contrast that with the iPod or iPhone or even the Sansa, where people can actually be seen using them everywhere."

He adds: "... I still have not understood why anyone would pay US$350 for a device that needs to be powered up all the time to be in use, just to read a book which otherwise costs US$15 on an average. And its not like the e-book is free on Kindle: you have to shell out an
average of US$10 per book."

This is a view not uncommonly expressed. I can't understand it either. I have no intention of buying an iPhone (I do not use mobiles) but I can see how it could be useful. For one thing, the iPhone is merely a fully-fledged computer masquerading as a mobile phone. (Has AT&T not caught on yet?) You can watch DVD quality movies, television shows, listen to music, play games (Wired Magazine says the other gaming platforms better watch out), surf the net, do word processing, spreadsheets, and emails in a device that fits into your shirt pocket. And ... read books, newspapers and magazines? (Apple also reported that it recorded 10 million software downloads for the iPhone, also in the first three days of the launch.) Doesn't give Kindle much of a chance, does it? I have not seen one, but from photographs it does not look like it will fit into a pocket easily.

Then, PC Pro says that author Nick Hornby writes on his blog: "Attempting to sell people something for GBP400 that merely enables them to read something that they won't buy at one hundredth of the price seems to me a thankless task ..." He says a member of staff at Borders
told him that. He asserts they are so expensive that even multi-millionaire stars don't want them, and says that his local bookstore is "piled high" with Iliad eBook readers.

Then there are the cheerleaders. The Bloomberg report mentioned above says: "Donald Graham, chief executive officer of Washington Post Co., travels almost every week and says he hardly ever leaves home without his Kindle digital book reader from Amazon.com Inc."

And that: "By 2010, Amazon may get 3 percent, or US$741 million, of revenue from sales of the paperback-sized reader and digital books, according to Citigroup Inc. analyst Mark Mahaney, a Kindle user. That's up from this year's 0.3 percent, or US$60 million ..." Someone even says, "It's reasonable to assume books will go the way of music or the DVD at some point, with the majority being sold digitally ..."

Ahem.

A more recent report in The Independent says that Waterstone's is to launch its own e-Reader. Borders UK launched one in May. Waterstone's, which is part of HMV Group, is thought to have signed a deal with Sony.

For more related stories in cyberspace read Kindle seen as transitional technologi in Business Week and Is a Kindle to books as an iPod is to tunes? in the San Fransico Chronicle. Talk about wishful thinking.

Meanwhile, Gregory Lamb of the Christian Science Monitor reports that "As Microsoft backs away from digitizing old texts, some worry that a single company could privatize world knowledge.” That is, Google. "Should a single company be left in charge of putting all of the world’s books online?" he asks. The story is about concerns of Google becoming the new evil empire. But what is interesting is that Google CEO, Dr Eric Schmidt, sits on the Board of Apple.

Hmmm. It is getting interestinger and interestinger.