Amazon's ad-supported Kindle has topped the retailer's bestselling electronics chart, suggesting consumer tolerance for sponsored e-content.
As it turns out, people really are willing to sit through
ads-at least if they come attached to a cheaper e-reader.
Amazon's ad-supported Kindle device, which comes $25 cheaper
than the WiFi-only unsponsored version at $139, has taken first position on the
online retailer's list of bestselling electronics. The Kindle 3G retails for
Amazon itself will likely keep mum on actual Kindle sales
numbers-a long-running company habit-but the latest device's prominent position
on the bestseller list suggests that tablets and e-reader software for other
devices have done little to cool interest in dedicated devices for displaying
Although the Kindle continues to dominate the e-reader
market, it faces competition on a number of fronts. Ebook applications for the
iPad and Google Android have threatened to make tablets and smartphones, by
virtue of their multitasking abilities, a more attractive option for consumers.
Barnes & Noble's Nook Color offers a color alternative (and a broad
selection of apps) to Kindle's grayscale. And Amazon's own Kindle app for PCs
and mobile devices could cannibalize the hunger for a dedicated Kindle device,
at least in theory.
Analystics firm In-Stat predicted in September 2010 that
e-reader shipments will grow to an annual 35 million units by 2014. "Tablet PC
shipments are taking off, fueled in particular by the Apple iPad introduction.
Yet there will still be a revenue opportunity for e-reader suppliers and OEMs
since tablet PCs and e-readers target different consumers," Stephanie Ethier,
an analyst with In-Stat, wrote in a research note. "Standalone e-readers will
address the needs of avid readers, to whom the reading experience is central.
Tablets are better suited for consumers who prefer a stronger multimedia experience
and only light reading."
The prime question confronting the ad-supported Kindle was
whether the price was low enough for consumers to tolerate sponsored messages
on their e-reader in the same way they do on virtually every other
entertainment device. Based on the early sales indications (albeit, provided by
Amazon itself), the answer to that question could be a very tentative "Yes."
In the interim, rumors also abound that Amazon is
considering a leap into the Android tablet market, building a device that would
tackle the iPad head-on.
"Amazon could create a compelling Android- or Linux-based
tablet offering easy access to Amazon's storefront (including its forthcoming
Android app store) and unique Amazon features like one-click purchasing, Amazon
Prime service, and its recommendation engine," Forrester analyst Sarah Rotman
Epps wrote in a March blog posting. "More consumers considering buying a tablet
say that they would consider Amazon (24 percent) than Motorola (18 percent)."
Should Amazon build an Android tablet, it could leverage its
existing customer base for e-texts and multimedia. But such a device remains
vaporware for the moment; the retailer instead seems wholly focused on pushing
the Kindle into a crowded ecosystem.