Amazon.com’s Kindle DX Could Face Same Issues as Kindle 2

Amazon.com released the Kindle DX, the next iteration in its line of electronic reading devices, on May 6 at a high-profile event in Manhattan, N.Y. Although the event lacked the celebrity presence that accompanied the rollout of the Kindle 2 in February-during which author Stephen King gave a reading-the Kindle DX rollout nonetheless attracted substantial media attention.

Modified with a larger screen to better display textbooks and wirelessly downloaded newspapers, the Kindle DX represents the next stage of Amazon.com’s strategy for dominating the e-book market. However, some of the issues and competition that confronted the Kindle 2 may have an affect on the DX, as well.

Sales and revenue will likely not be one of those problems. Analyst predictions have the Kindle racking up $1.2 billion in sales in 2010 and $3.7 billion by 2012. That latter estimate was provided by Doug Anmuth of Barclays Capital, who said he thinks that 10 percent of total Amazon.com sales and profits will stem from the device.

According to Amazon.com CEO Jeff Bezos, the Kindle already represents significant revenue for the company, bringing in 35 percent of its book-related sales.

If past history is any indication, groups with a vested interest in book sales may try to make their needs known in relationto the Kindle DX, as they did with the Kindle 2.

The Authors Guild complained in March that the Kindle 2’s text-to-speech feature, which reads on-screen text out loud, represented a potential revenue drain for audio books, essentially negating any need for the latter. The Authors Guild said it was “studying this matter” but made no mention of a possible lawsuit-likely because the complaint sat on thin legal ice, according to James Grimmelmann, an associate professor at New York Law School’s Institute for Information Law and Policy.

“Text-to-speech doesn’t result in making more copies of the book or in performing the copy on the Kindle to anyone else,” Grimmelmann said at the time in an interview with eWEEK, “[which are] the normal ways that copyright would be triggered.”

Rather than risk a battle, though, Amazon.com selectively disabled the feature in the Kindle 2. Text-to-speech has been preemptively modified on the Kindle DX, with Amazon giving a book’s rights-holder the ability to disable it for that publication, perhaps nipping complaints of any future publishers’ or authors-rights’ groups in the proverbial bud.

At around the same time, Sony made a countermove with its own eReader, lowering the price of its PRS-700 reader by $350, compared with $359 for the Kindle 2. Google and Sony jointly announced that the former’s free, public-domain eBooks library would be available on Sony’s device, bringing its library to 600,000 volumes. At that time, Amazon.com’s Kindle library stood at 245,000 volumes.

It was the first time that Google had made its scanned public-domain books available for an eReader in ePub format.

Although the Kindle DX, which retails for $489, was doubtlessly in development before Sony’s announcement, the timing of the rollout suggests that Amazon.com is very aware of the need to stay ahead of other players within the space.

Perhaps realizing that technology may not be enough to eke out an advantage, Amazon.com has also focused on expanding content, signing deals with The New York Times, The Boston Globe and the Washington Post as well as three textbook publishers, Cengage Learning, Pearson and Wiley, to distribute their respective content. A deal allows those newspapers to market a lower-cost version of the Kindle DX in exchange for users agreeing to long-term wireless subscriptions, as long as those users live outside the “home delivery” range.

What remains to be seen, of course, is what other players in the e-reader and digital book space, such as Sony and Google, decide to do next in response.