Kindling a market in e-Books

In recent weeks there has been quite a lot of puff about the Amazon Kindle being the "iPod for Books" - this piece by Jack Schofield in the Grauniad punctures that to an extent:

Yes, but perhaps only after it becomes a newspaper reader. One of the drawbacks with today's ebook readers is the price of the hardware, which ranges up to £400. Even after this year's $40 price cut, Amazon's ebook reader, the Kindle, costs $359. Not many people buy enough books to recoup the cost. However, if it could replace a printed newspaper, regular readers could probably recover the hardware cost in a few months - or they might be given one free.

The Kindle has been very successful by ebook standards, and Citigroup analyst Mark Mahaney has just doubled his projections for Kindle sales to 378,000 units for this year, 934,000 next year and 4.4m in 2010. "Turns out the Kindle is becoming the iPod of the book world," he told Citigroup clients.

The numbers are small compared to other consumer electronics devices. For comparison, Apple sold around 8.2m iPods in the US in last year's Christmas quarter, Nintendo's Wii sold 2.9m and Microsoft's Xbox 360 2.4m. Mahaney's estimate of Kindle sales is exactly the same as the iPod sold in its first year. However, the iPod entered a market that had been pioneered by devices such as the Diamond Rio, and the huge success of Napster's file-sharing service meant there was plenty of free content. Amazon is having to create the market itself.

What surprises me is that its even got this far - this generation of e-Readers are still pretty hard to read and are expensive to buy. Also, as Jack says, there is not a body of low cost books to read - book pricing for e-Books still has not nearly discounted the move from physical products. After looking at the plastic ink e-Readers now in development (disclosure - we have done work with the next generation e-Readers), I think I'll pass for now.