Amazon To Offer Kindle eBooks On Other Mobile Devices. Will Tiny Lexcycle Survive?

For tech titans, it's a time-honored ritual in the hi-tech business; Use your market "influence" to drive acceptance of your proprietary technology for as long as possible, until you have no other choice but to lift the proprietary veil (if only just a bit). By then, momentum is driving your success anyway. Such has been the path of Goliaths Microsoft and Apple. But it remains to be seen if Amazon-the-book-Goliath can repeat industry tradition with its strategy for Kindle, or, if a tiny 3-person

David Berlind, Chief Content Officer, UBM TechWeb

February 18, 2009

11 Min Read

For tech titans, it's a time-honored ritual in the hi-tech business; Use your market "influence" to drive acceptance of your proprietary technology for as long as possible, until you have no other choice but to lift the proprietary veil (if only just a bit). By then, momentum is driving your success anyway. Such has been the path of Goliaths Microsoft and Apple. But it remains to be seen if Amazon-the-book-Goliath can repeat industry tradition with its strategy for Kindle, or, if a tiny 3-person self-funded "David" known as Lexcycle could spoil the party (podcast included).

Lexcycle Neelan ChoksiI'm a big fan of the Kindle. Huge fan. For a while, we were a 2-Kindle household. As I write this column, we're a 0-Kindle household. I busted one of the Kindles (an Amazon-furnished review unit) by putting too much pressure on its screen in my jam-packed roller bag briefcase.

Then, last week, to make sure I had props for my video coverage of the new Kindle, I begged my wife for hers. Her last words as I slipped it into my bag were, "Don't do to my Kindle what you did to yours." I swore I'd take good care of it. Somehow, though, the lens of my Nikon D70 smashed her Kindle's screen, too. Beware. Kindle's are delicate (and unlike the Kindle 1, the Kindle 2 does not come with a protective cover... now there's an aftermarket for those).

I had two choices when it came to replacing my wife's Kindle. For $180, Amazon will ship you a replacement. Or, I could pre-order the brand new Kindle 2 for its full retail price ($359). After Amazon CEO Jeff Bezos announced the Kindle 2, I heard from plenty of people who thought Amazon was being a little greedy by not offering existing Kindle 1 owners an upgrade discount. One reader asked me point blank if, as a user of the Kindle 1, I saw enough in the Kindle 2 to warrant upgrading. In other words, would I run out and buy the upgrade if I already had an original Kindle?

Answer? Not unless the original Kindle was my wife's and I busted it. Of all the features of the Kindle 2 that are supposed reasons to upgrade, the only two that really jump out at me were the improved memory (not counting its SD-based expansion slot which improves its capacity -- the Kindle 1's capacity is 200-something books and the Kindle 2 with its 2 G-bytes of memory can hold upwards of 1500 books). Also, Amazon's claim of improved battery life, which is yet to be independently benchmarked since the Kindle 2 isn't out yet (and I'm not sure how you'd benchmark it anyway).

But, since I busted my wife's Kindle, I ordered a new Kindle 2 for her and decided that if I wanted a Kindle for myself, we'd just replace the one I broke (hers) at the $180 replacement cost.

But, whereas 3 weeks ago, I would have handed over the $180 replacement fee in a heartbeat, today I'm not so sure. Over the last few weeks, I've been using an iPod Touch to read books with an application that works on the iPhone equally well. That application, called Stanza, is published by Lexcycle and is available for free from Apple's iTunes Application Store (iTunes required).

Apple thinks the idea of reading a book on an iPhone is important enough to demonstrate the capability in one of its iPhone commercials (at the end, and not with Lexcycle's Stanza). But, to be fair, reading a book on an iPod Touch (or iPhone) takes a bit of getting used to. Even though you can squish text by pinching the device's touch screen the same as you would with iPhone's Safari Web browser, it's going to take more page turns to read a book with an iPhone or iPod Touch than it will with a Kindle. But does that really matter? Not in the least. Especially if you own an iPod Touch or iPhone already (as approximately 35 million people do). Whereas the cost of turning that device -- one that can play music, movies, games, and run a rapidly growing gaggle of applications -- into an e-book reader is free, a Kindle 2 costs $359.

And what if you don't already own an iPod Touch or iPhone? Consider this: A new iPod Touch with 16 GB of memory (that's 8x what the Kindle 2 has) costs $299 (the same as the starting price of Sony's eBook reader). At face value alone, if you used the iPod Touch as an e-book reader and nothing else (sure, just try to forget about all the other incredibly cool things it can do), it'd be a pretty good deal. But toss in the fact that both the iPhone and the iPod Touch have backlit screens and things start to get interesting.

Talk about curling up with a good book; most of the pages of the last three books I read using Stanza on the iPod Touch were consumed while lying in bed with all the lights out or on a plane at times when turning on the overhead light isn't exactly a neighborly thing to do (think red-eye). Bonus? It fits in your pocket (go ahead, try that with the Kindle or Sony's ebook reader).

Another bonus (in the event you're running Stanza on the iPhone): the wireless hotspot through which Stanza can acquire its e-books is available in 60 of the 75 countries that the iPhone works in. The iPod Touch is limited to where ever there's Wi-Fi. In contrast, the Kindle's wireless hotspot is limited to the footprint of Sprint's 3G wireless broadband network in the United States.

If you think I'm trying to paint the perfect picture for Stanza vs. the Kindle, I'm not. Stanza is far from perfect, an assessment that Lexcycle COO Neelan Choksi actually shares. While in New York City for the Kindle 2 announcement, I bumped into Choksi at a very crowded Zanzibar where Laurel Toby was running one of her famous Media Bistros to coincide with O'Reilly's Tools of Change Conference (also taking place in NYC). Fortunately, I had my podcasting gear with me and seized the opportunity to get him on record about Lexcycle and Stanza. Just click the play button to listen to my interview with him.

The Stanza client, for example, acquires its mainstream books through a special Stanza-oriented subdomain of Fictionwise, a popular online e-book store. But unlike the frictionless iPod-esque ecommerce experience that Amazon has engineered into the Kindles 1 & 2, the act of buying, downloading, and starting to read a book with Stanza and Fictionwise is a bit rough on the edges. Tolerable, but rough; a finding that Choksi took no issue with. But, like the additional page turns it takes to read a book, for each one of these little Stanza weaknesses, you have to ask yourself whether such lack of e-commerce polish is a dealbreaker given that the software is free. Not for me.

Another difference between the two offerings (Kindle and Stanza) is the price of books. Most Kindle books are available at a significant discount when compared with the cost of the hardcover or paperback versions. However, with Stanza, while there is a discount, it's not quite so significant. Nor is it obvious. When I purchased my e-books from Fictionwise, it looked like I was paying the full price. It wasn't until I got my e-mail confirmation that I saw that a discount was applied; a discount that's apparently computed on the basis of previous Fictionwise book purchases (sort of like a frequent flier program). Again, the e-commerce experience is a bit rough on the edges. Furthermore, if you're a bean counter, you could use a break-even analysis to justify the purchase of the Kindle based on the amount of money you'll save over the savings through Stanza.

Perhaps Stanza's biggest weakness relative to the Kindle is the number of e-books that are available to it. During his announcement of the Kindle 2, Amazon's Bezos said that his goal is for every book ever printed to be available to the Kindle in every language within 60 seconds of requesting it.

In the interview, Choksi points out that Lexcycle has the exact same goal and highlights how the Stanza user interface (menus, etc.) currently operates in 12 different languages. As best as I can tell, the Kindle's user interface is English only (I'm waiting to hear back from Amazon on this question). Both are capable of opening foreign lanaguage texts, though. But, today, whereas the Kindle has about 230,000 books available to it, Stanza only has about 100,000.

Choksi says that Stanza will catch up. But, the bigger question is whether or not the time needed to do so is on Lexcycle's side or not. Although Bezos was nonspecific at the Kindle 2 launch about which third-party devices Amazon planned to support, he alluded to Amazon's plans to make Kindle books available on "mobile devices" when he said:

We added a new feature; WhisperSync. Between Kindle 1, Kindle 2, and other mobile devices, you'll be able to read a little on one device, switch devices, read a little on that device, and we'll keep your furthest location read for you. We'll keep your current page, wirelessly.

Prior to the Kindle 2 launch, it was rumored that Amazon was also going to announce the availability of Kindle books on the iPhone. It didn't happen. But Bezos was so subtle in the way he slipped in this clue that I think pretty much everyone at the launch missed it. It wasn't until I went back and listened to TechWeb's recording of his entire presentation that I caught it.

Everything the Kindle does (including the Kindle 2's text-to-speech feature) can be done in software. There may be 35 million iPhones and iPod Touches in the market (an addressable market that Amazon simply cannot turn its back on). But bear in mind that the Kindle, at its heart, is a Java machine and porting some or all of the Kindle functionality to the gazillion or so Java-enabled handsets including those running Symbian, BlackBerry, and the Android platforms shouldn't be too difficult for Amazon. Software also is a better business model for Amazon given how much more scalable it is than hardware (and given how Amazon's various success stories -- from its online stores to its Web services such as its cloud computing and storage offerings -- are all about scale).

For all that the tiny 3-person company can do, Lexcycle isn't standing still. Stanza was born out of a Google-sponsored competition for Android applications and in the interview, Choksi says an Android version is on the way (good news given how more Android handsets appear to be on the way based on the news coming out of Mobile World Congress in Barcelona this week).

Lexcycle also is scoring some decent partners, too. During the podcast interview, I spent some time speaking with O'Reilly Media VP of Digital Initiatives Andrew Savikas, who commented on why O'Reilly is partnering with Lexcycle to put some of its books onto the iPhone/iPod Touch platform. One reason that O'Reilly went with Lexcycle is based on how the Stanza e-book reader can be digitally integrated with an e-book in such a way that the entire bundle is a standalone application.

To test the idea out (or "blaze new ground," as Savikas refers to it), O'Reilly went with the most obvious e-book for iPhone users: David Pogue's iPhone: The Missing Manual for $4.99 (a PDF version of the Missing Manual is $19.99). Apparently, the test has gone so well (independent of format, the e-book outsold all of O'Reilly's other titles in January 2009), that Savikas says O'Reilly is preparing another batch of about 20 titles.

Savikas points out that O'Reilly also has 12 titles on the Kindle but that he's "reluctant to make more of them" since the Kindle doesn't support formatting for tables or computer code (two critical characteristics of O'Reilly's technical references). Savikas also mentioned that there are more than 400 O'Reilly titles available in the MobiPocket e-book format which is supported by the Kindle (you just have to load the e-book into the Kindle yourself).

While Lexcycle makes progress (and friends), Amazon-the-Goliath is clearly heading in this little David's direction. Whether it's the millions (or billions) of handsets on the market through which Kindle books could be purchased and read or it's the audience for technical books from book publishers like O'Reilly Media, Amazon is no doubt keenly aware of what it has to do to succeed in untapped markets. It's just a question of time.

Tick. Tock.

About the Author(s)

David Berlind

Chief Content Officer, UBM TechWeb

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