Amazon Unwraps Kindle 2.0

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In laying out Amazon's vision for e-books, Bezos maintains that a dedicated electronic reader such as the Kindle will be crucial. To illustrate this point, Bezos cued up a chart showing trends in Amazon's e-book sales (without exact numbers). Sales climbed lazily to a peak at 2005, when they began to drop again. But sales have rocketed since the first Kindle was sold 14 months ago, Bezos said, and Kindle books now account for 10 percent of the units that the online retailer sells.

Richard Shim, an IDC analyst, says that the e-book market has been crawling for 10 to 15 years, and adds that "there are [still] a lot of obstacles that need to be overcome before we start running." Major blocks, he says, include the cost of reading devices, the cost of digitizing books, and often-complex licensing issues.

Shim notes that recent activity in the e-book market suggests that it is starting to grow. But he also believes that there could be separate audiences for e-books on mobile phones and e-books on dedicated devices such as the Kindle. Although Google's achievement is impressive, he sees Amazon as more likely to drive customers to try e-books, since the retailer has a much stronger economic interest in this area.

Indeed, Amazon is making a major push to provide content for the Kindle. "Our vision is, every book ever printed in any language, all available in less than 60 seconds," said Bezos. "And we're making progress."

Amazon has gone from offering 90,000 books for the Kindle in November 2007, when the device was first released, to offering 230,000 books today. The company is prioritizing the digitization of books based on their popularity--Bezos noted that 103 of the 110 books currently on the New York Times best-seller list are already available for the device. Amazon is even supporting the launch of the Kindle 2 with an exclusive short story written by Stephen King, "Ur," which the author says focuses on reading books on an electronic screen.

"The key now is for the industry to continue to sculpt the market into what they want it to be," says IDC's Shim.