In September of this year, Mashable proclaimed “Apple’s Tablet Will Eat Kindle’s Lunch“.  The article went on to criticise the Kindle device on a number of levels, such as the fact that it’s not in color, and that it doesn’t have fancy multitouch functionality.  While I agree the device will soon be left in the dust, I think Amazon has something much bigger up their sleeve…

Can you believe it’s already been two years since Amazon launched the original Kindle?  Although not the first e-reader, it was the first to enjoy significant market penetration, and today it’s practically a household name.  In February 2009, Amazon announced the smaller, sleeker Kindle 2 device.  It was still lacking some basic features like color (yes I’ll call that basic, sorry Amazon), but it was an improvement nonetheless.

But it wasn’t until March that things got interesting. That’s when Amazon released the Kindle iPhone app, and suddenly you had a whole new group of potential customers for the Kindle book store.  I’m not sure if you’ve been playing along but the foot print of iPhone owners worldwide is quite a bit bigger than Kindle.

This trend continued in November when Kindle for PC was released.  Suddenly every PC owner was a potential customer.  Huge!! With plans for a Mac Kindle app in the works, this can only continue.

So why doesn’t Amazon keep the Kindle software, and the Kindle market exclusive to the Kindle device?  They would sell more Kindles right?  Yes, but in my opinion the revenue potential for the Kindle devices is minor compared to that of the Kindle store.  Not to mention that hardware gets trumped every day by new devices.  With this approach Kindle doesn’t have to worry (as much) about dream/concept devices like the Apple Tablet or Microsoft Courier.  Just make Kindle software for each.

If Amazon roll this out fast enough, and gets the all important user experience design right, it will have a beast of market on its hands.  Kindle is to books/newspapers/blogs/magazines as iTunes is to music and movies… Maybe.  Remember when Apple decided to roll out iTunes on PCs instead of staying Mac-exclusive?  We’ll have to wait and see.

Some key components I see for the success of the software:

* It must be open (i.e. I better be able to read my own pdf files)
* It must remember your place in everything you’re reading
* everything must sync with the cloud, but a local copy should be maintained on all devices
* Commenting and sharing must be enabled.  In this age of social media, if Amazon doesn’t do it, someone else will.
* Users should be able to pull in any RSS feed (currently blog owners have to register their site with Amazon before this works, and the user has to pay $2 to subscribe to the blog – that’s just silly, and unsustainable)
* It should incorporate some sort of web ‘instapaper‘-esque service.  Busy people see stuff they want to read online all the time, but any productivity guru will tell you it makes sense to batch all that reading up instead of buying in to constant interruptions.
* UX/UI design should be spot on!  I hope they don’t skimp on this.  It’s why Apple is so successful with iTunes.

Some potential competitors.

There are plenty of devices with e-reading capability  (like Sony and Barnes & Noble) with many more on the horizon.  If I had to pick the big players in the e-book marketplace of the future, though, I’d have to say it will be one of these three:

Amazon:  Obviously.  See above.
Google:  Will be a big player because of all the books they aim to digitize.
Apple:  You really cannot beat Apple’s product and user experience design.  With the Apple Tablet looming on the horizon, they will make a big splash.  It appears like they will tackle magazines first.

I don’t see any startups swooping in for the top stop, although some will inevitably get acquired for pieces of the puzzle along the way.

What do you think?  Is Amazon crazy or riding the gravy train?  Will Apple eat Amazon’s lunch or buy it dinner?