Amazon Adds Video, Audio to Kindle Apple Apps

By Nicholas Kolakowski  |  Posted 2010-06-28 has added embedded audio and video clips to its Kindle e-reader applications for iPad, iPhone, and iPod Touch-a feature seemingly designed to leapfrog not only Apple's own e-reader, but also those of competitors such as Barnes & Noble's Nook. The new Amazon feature bakes more multimedia into e-books; readers can now listen to a travel author's narration during a city tour, for example, or view a demonstration video inside a how-to text.

"Readers will already find some Kindle Editions with audio/video clips in the Kindle Store today," Dorothy Nicholls, director of Amazon Kindle, wrote in a June 27 statement. "This is just the beginning-we look forward to seeing what authors and publishers create for Kindle customers using the new functionality of the Kindle apps."

Amazon's Kindle Website; some media-enhanced books, the company cautions, will need to be downloaded using WiFi, apparently due to large file size.

The Kindle's newest feature seems expressly targeted at Apple's own iBooks application, which itself was touted as an advance over traditional e-readers due to its color screen and ability to display more dynamic layouts. While Amazon continues to aggressively back the Kindle device, which displays text on a grayscale e-ink screen, a robust Apple app would conceivably allow the online retailer to carve off a certain percentage of readers who opt instead to purchase an iPad.

While previously dismissed by analysts as a relatively stolid niche market, the popularity of e-readers during the 2009 holiday season-combined with the high-profile release of the Apple iPad, which features a baked-in e-reader-has led to something of an arms race between competing products: as soon as one device undergoes a software or hardware update, it seems, the others feel duty-bound to introduce a new feature of their own.

Price-cutting has also become a hallmark of the industry. On June 21, Barnes & Noble announced a price reduction for its Nook e-reader from $259 to $199, and offered up a WiFi-only version of the device for $149; the original Nook utilizes a 3G connection, theoretically allowing an e-book to be downloaded virtually anywhere with coverage. That same afternoon, Amazon announced that it would reset the price of its original Kindle from $259 to $189.

Additional e-readers have begun to skim the $150 price-point, including the Kobo, which is marketed through Borders and sells for $149, and Sony's Reader Pcoet Edition, which retails for $169.

"With these cuts, eBook readers from Barnes & Noble as well as Amazon now are priced at about the breakeven level with their Bill of Materials (BOM) and manufacturing costs," William Kidd, director and principal analyst of financial services for iSuppli, wrote in a June 24 statement. "With zero profits on their hardware, both these companies now hope to make their money in this market through the sale of books."

In that manner, Amazon and Barnes & Noble seem to be following in the steps of Sony's PlayStation or Microsoft's Xbox franchise: "This is the same -razor/razor blade' business model successfully employed in the video game console business, where the hardware is sold at a loss and profits are made on sales of content."

However, the question remains whether e-readers as a whole can add "gee-whiz" features quickly enough to attract new audiences. "There is no visible short-term solution to drive significantly more sales of eBook readers," Kidd wrote, "except to use price as a tool."

Amazon's newest feature, though, emphasizes that the e-reader battle is becoming one of software just as much as hardware.

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