Will free iPhone Kindle app eat into Kindle 2 sales? |
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Will free iPhone Kindle app eat into Kindle 2 sales?
Now that Amazon.com is letting people read its electronic books on the iPhone, the inevitable question arises: will Amazon's link-up with the popular Apple device undermine sales of the newly minted Kindle 2? BusinessWeek takes up the topic in a story today that asks if Amazon's iPhone strategy is a "Kindle Cannibal."
The magazine talks to one analyst who believes that people who already own an iPhone and can get the free Kindle application will have less incentive to buy an actual Kindle -- particularly in today's economy when many are cutting costs. But Citigroup analyst Mark Mahaney, who's been bullish on Kindle sales, says the new iPhone app doesn't change his projections and calls the Kindle 2 a bonafide hit.
Amazon has never released sales figures for Kindle, so it's hard to establish a benchmark for the electronic reader. My take on the cannibalization question? Amazon has made clever use of Kindle to generate interest in, and create a market for, electronic books. But it seems the company has always understood its real strength here -- its vast (and growing) e-book collection, which today numbers 240,000 and dwarfs that of many of its competitors. From that perspective, it makes sense that Amazon would want to make that content available on multiple devices.
Amazon executives have talked about the iPhone as a "companion" to the Kindle -- with the Kindle being the primary reading device and the iPhone being a stand-in if the user is on the go. But Amazon's decision to keep a relatively high $359 price point for Kindle 2 indicates that Amazon, for the moment at least, is not positioning the reader as a mass consumer product -- and assumes that people will access its e-books on other devices.
Even before the release of Kindle 2, the company said it wanted to offer e-books on "a range of mobile phones." What's next after the iPhone? Stay tuned.
Note: Amazon just got some big competition in the electronic book market with Barnes & Noble buying Fictionwise, a prominent e-book seller and maker of the eReader application for iPhone.
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