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Business Impact

Amazon Expands the Kindle with Apps

But do apps make sense for a dedicated e-reader?

It’s an exciting time for lovers of digital books. Last week, Amazon announced plans to release a software development kit for the Kindle, so that other companies can develop and sell applications for the e-reader. Tomorrow, Apple is expected to announce a tablet device that could be a significant threat to the Kindle’s position as the leading e-reader.

Good for games? Amazon will begin selling third-party applications for its e-reader via the Kindle store later this year.

Susan Kevorkian, program director for mobile media and entertainment at the research firm IDC, says Amazon’s timing, just in advance of the Apple announcement, isn’t pure coincidence. “Apps for the Kindle will enable users to leverage its persistent connectivity to expand Kindle’s functionality beyond digital book and periodical reading,” she says.

But with a payment scheme that puts developers on the hook for some wireless download costs and a challenging user interface, the Kindle might not enjoy the wide variety of apps already available for the iPhone.

Amazon says applications of all sorts should be available on the Kindle store later this year. The development software is still being tested and revised. But a handful of software developers, including game maker Sonic Boom of New York, were given an early version of the development kit a few months ago so they could start working on products. Amazon says a larger group of testers will get ahold of the software next month.

Josh Grant, Sonic Boom’s chief operating officer, says the company is already working on developing a few simple games for the Kindle, including card games, puzzles, and word games. These will be ready when the Kindle application store launches. “We’ll see how those do and get some market data” before pursuing a few more innovative ideas, Grant says.

Sonic Boom also makes games for a wide variety of cell phones, including the iPhone. Grant says that Amazon seems to recognize the “challenge for content providers who work with Apple ecosystem.” The problem, he says, is getting an application recognized among 120 million others. Amazon’s payment scheme should cut back on the number of developers, because it makes them responsible for paying $0.15/megabyte for downloads. Hobbyists likely won’t submit programs to the Kindle store due to the potential costs involved, which will make it easier for professional developers like Sonic Boom to garner customers’ attention.

Another mobile software developer, Handmark Studios, is already working on a version of its Zagat To Go restaurant locator software for the Kindle. Cassidy Lackey, vice president of Handmark, says Amazon’s pricing scheme also makes a difference in terms of development. “You don’t really have to pay as much attention to network usage on a device like the iPhone. For the Kindle, you don’t want to be downloading a whole bunch of great big images,” Lackey says. The developer wouldn’t want to pay for all that downloaded content, and the Kindle’s black-and-white E-Ink screen isn’t ideal for image display.

Handmark couldn’t simply port its iPhone application to the Kindle platform anyway, because of the significant hardware differences. “The Kindle is quite a bit more limited from a user-interface perspective,” Lackey says. “Control of the Kindle is very much page-based,” with the user usually pushing buttons to move from one page to the next. “It doesn’t use the scrolling metaphor like you’re used to on the iPhone and other smart phones,” he says. The Kindle also lacks a touch screen.

Amazon’s Kindle faces competition from other hardware makers offering portable devices with a variety of low-power color screens. These devices could serve as e-readers–at least in part. But Apple’s existing relationship with software developers who write games and other small applications for the iPhone likely makes it the biggest contender for the e-reader throne. E-Ink, the display technology used in the Kindle e-reader, is already viewed as limited, given that it is slow to refresh, doesn’t offer color, and can’t support video.

“If Apple unveils a multipurpose media tablet with support for digital books and periodicals, content from a deep and wide range of publishers, and a color display, it is likely to be Kindle’s biggest, albeit indirect, competitor,” says Kevorkian.

But James Belcher, an analyst with ABI Research in Portland, OR, who covers e-readers, says he doubts that an Apple e-reader would “crush” the Kindle. “The market is still young,” he says. “Apps won’t decide who wins the e-reader game.”

Belcher adds that the Kindle’s biggest strength is the number of quality books that are available for it. If Apple gets into the e-reader space, its biggest challenge may be negotiating for those same books, he says. “Publishers will be leery of a potential hegemony.” They have made it clear, he says, that “they are not interested in having their digital business dominated by Apple a la iTunes.”

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