Can Amazon Rekindle the Kindle?

With the release of the iPad, the e-reader market dominated by Amazon’s Kindle for the last few years has been shaken up. Curiously, the Kindle’s maker has done little to respond to the new threat, bringing a cloud over the current frontrunner’s future. That’s a shame, since a handful of changes would go along way to keeping the Kindle relevant in an iPad world.

While we have not yet been able to test the iPad here at OFB, the initial reviews do not appear to bode well for the Kindle. Despite the iPad’s more traditional LCD display instead of the e-ink display common to e-readers, the iPad has been garnering glowing reviews for its quality as an e-reader.

If the reading experience is enjoyable on the iPad, the utility of the $489 Kindle DX, offering just a quarter of the storage capacity, is seriously questioned. The standard Kindle 2 is in somewhat better shape, given its $259 price tag. Nevertheless, even at $241 more, Apple’s device will surely lure many, given its larger display combined with quadruple the storage capacity.

These comments would be true even if the iPad were not a multifunction device. But multifunction it is. The iPad combines the reading-friendly tablet form factor of the Kindle with most of the functionality of a computer in a design that looks like it could be more enjoyable to use than either.

As convergence moves forward, single function devices like the Kindle become harder to justify buying. Mark even the once unstoppable iPod, now primarily relegated to the low-end market by its multifunction, iPhone OS-based siblings.

For Amazon to keep the Kindle going as a notable force, the company needs to take decisive action. Or, as I would suggest, three decisive actions.

First, Amazon must deal with the pricing issue. Faced with the iPad, the Kindle seems to be overdue for a significant price drop. Given that the Kindle is primarily a purchase intended to allow one to make more purchases from Amazon, lowering the price to $199 or even $149 does not seem unreasonable. That’s the easy step, but pricing alone is hardly enough.

Second, one of the biggest weaknesses with the Kindle is its proprietary nature. Sure, it can read PDFs, but trying to read most PDFs on a Kindle 2, with its lack of zooming abilities, is an exercise in futility. The files really need to be converted to Kindle format to be useable. Worse, ePub files must be converted prior to using them on a Kindle. This is a troubling situation, given ePub’s ubiquitous support by reading devices and content providers other than the Kindle. Introducing better PDF support and native ePub support would be relatively simple and would greatly improve the device’s ease of use by eliminating the need for users to convert most non-Amazon materials.

Also on the ease-of-use front, Amazon should revise the Kindle’s UI for both existing and future Kindle owners. Ironically, for a device oriented towards serious readers, the Kindle does little to organize large content libraries on the device, much less the user’s computer. A way to easily categorize content should have been on the device long ago, but is all the more important if the Kindle is to provide a superior experience to the iPad going forward.

No, the Kindle cannot match the iPad’s beautiful, full color user interface. But it does not need to. Make the user interface elegant and simple and people will love it even if it lacks flashiness. The very printed books the Kindle aims to replace are best exemplified not by flashiness, but by beautiful, highly readable typography, tasteful use of whitespace and easy to use indexes and tables of contents.

Third, Amazon needs to introduce some new features to distinguish its offering from other alternatives. For example, if Amazon expanded its WhisperSync feature so that it synchronized not only Amazon-purchased e-books but also user-supplied content, it would make both the Kindle and Kindle applications far more useful and convenient.

Barnes & Noble understood the differentiation by features idea when they introduced e-book lending abilities to the Nook. Amazon should try to offer a better lending feature. The trouble with e-books heretofore is that they are simply less flexible by almost every count compared to their non-electronic forerunners: you cannot sell them, you cannot lend them or gift them when you are finished reading, you cannot even photocopy a page to file away in a project’s folder or turn in with an assignment. Many of the limitations on e-books should never have existed, but given that they do, Amazon can still be the one to receive goodwill for removing them.

There are plenty of other ways Amazon could likewise improve the Kindle’s utility. Reading e-mail on an e-reader device would likely be pleasant. Many people would probably find a text messaging plan for it interesting given its keyboard. Perhaps even an Amazon app for shopping Amazon.com generally rather than just its Kindle Store. The Kindle cannot win against the iPad as a general web browsing device, but it can play up its strengths on Internet related tasks that focus on text-heavy reading.

Finally, and without any changes to the device itself, Amazon could bundle. As a bookseller, Amazon should be making deals with publishers to include digital editions of books with the purchase of print books. This is something that would be hard for companies like Apple to match. I suspect many people – myself included – would be more inclined to buy e-books if the purchase did not mean giving up owning a paper copy.

None of these suggestions require more robust hardware, just sensible changes to make the best of what Amazon already has. I said earlier that single use devices are increasingly hard to justify. They are. But they can be justified, they just have to be really, really good.

The Kindle can be and should be.

Timothy R. Butler is Editor-in-Chief of Open for Business. Disclosure: the author is a smalltime investor in Apple (AAPL).

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