Amazon CEO Jeff Bezos

A color Kindle "is still some ways out." Amazon will keep pushing for $9.99 electronic books. Cloud computing could one day be as big a business for Amazon as retail. And online grocery delivery will remain a Seattle-area experiment, for now.

Those were some of the insights from Amazon Chairman and CEO Jeff Bezos, who spoke at the company's annual shareholder meeting at the Seattle Art Museum Tuesday.

Asked when color is coming to Amazon's Kindle e-book reader, Bezos said color LCD displays (common in many devices today, including iPad) are not right for a long-form reading device like the Kindle. LCD displays produce eye strain, have a shorter battery life, and don't work in bright sunlight, Bezos said.

As for the e-paper reflective display technology used by Kindle, Bezos said, "High-quality color is still some ways out. There are several things in the lab but they're not quite ready for prime-time production."

Bezos declined to talk about or even confirm Amazon's reported acquisition of Touchco, a small New York touch screen startup — a sign of how closely Amazon is guarding details of future Kindles.

Amazon has recently begun to raise the prices on some Kindle e-books in a bow to publisher demands. But Bezos made clear Amazon is still dedicated to its original $9.99 price for new e-books.

"You can expect us to keep pushing for that price point," he said.

"If consumers perceive that prices are too high, they will shift" to lower-cost titles, he said, adding that Amazon has already seen this dynamic.

The Amazon CEO didn't shed any light on Kindle sales numbers, saying as he has in the past that "millions" of Kindles have been sold. He also noted that Kindle books can now be read across multiple devices, soon to include mobile phones running on Google's Android operating system.

Bezos talked in more explicit terms than I've heard in the past about Kindle as two businesses — the device business and the content business — and said each will survive on its own merits.

"There's a Kindle bookstore and a Kindle device," Bezos said. "The Kindle device will succeed by being the best dedicated e-reader in the world. The Kindle bookstore will succeed by having the best selection and lowest prices and being available on the Kindle and other devices."

He reviewed some of the feedback Amazon has gotten from its Kindle pilot projects at a number of universities, including the need for "better methods for annotation and note-taking" and actual page numbers to find specific passages.

Bezos noted Amazon's continuing inventory expansion, and said "we're still very early" in terms of adding new product categories and new products within existing categories.

He mentioned online shoe retailer Zappos, which Amazon acquired in a $1 billion-plus deal last year, and called apparel a "very important category."

"It has a very large market segment we can address," he said.

Asked about a wider roll-out of same-day delivery service, Bezos said to think of that as a "Shangri-La."

"This is a place we want to go but we don't know how to get there," Bezos said, saying it makes sense for now with "certain cities with dense populations like Tokyo."

"We'll keep working on that," Bezos said, adding he doesn't expect any "major breakthroughs" on same-day delivery in the near future.

Bezos was enthusiastic about the prospects for Amazon's cloud computing business, Amazon Web Services, which he said is focused on "deep infrastructure."

"It has the potential to be as big as our retail business," he said. "It's a very, very large area."

Bezos was cautious on the idea of expanding Amazon's grocery delivery service, Amazon Fresh, currently limited to the Seattle region.

"It's only an experiment and we're still trying to figure out how to make it work," Bezos said. "We'll keep working on it. We won't expand it unless we feel like we know how to make it work."

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