Will the Kindle App Store succeed?

Posted by Peter Evers on Feb 11th, 2010 | 1 comment home title

If I asked you, dear reader, what an app store was two years ago, you probably wouldn’t have had the slightest clue what I was talking about. However, two years later every self-respecting consumer tech company has its own app store. For starters, every new mobile handset being released worldwide comes with a software solution to purchase apps, or mobile applications as we called them two years ago. But near the end of 2009 and the start of 2010 we saw a new device taking the stage, the e-reader seemed to have come out of the depths of the gadget freak scene and has reached a proper consumer device status. And of course this means that the app store announcement couldn’t take long. So six days before Apple released their long-awaited iPad, Amazon announced their plans for the Amazon Kindle App Store. Although you could argue the iPad is no competitor to the Kindle (since the iPad has a screen which is far from ideal for reading books), Amazon must have gotten a bit nervous and tried to steal some of Steve Jobs’ thunder. But does the Kindle App Store stand a fair chance of success?

Let’s have a look at some pros and cons:

Competition
Firstly, the Kindle doesn’t have fierce competitors in the e-reader area. The Nook by Barnes and Noble might become one, but isn’t there yet. Apple’s highly anticipated iPad doesn’t use e-ink technology so can’t be called an e-reader. So there’s no reason to assume that Amazon’s Kindle wouldn’t be the most popular e-reader near the end of 2010.

E-ink
This e-ink technology is both an advantage and disadvantage for the Kindle App Store. On one hand, the e-ink technology is an opportunity to build apps that people use for a longer time than just reading an article or playing a game, think crosswords or sudoku’s. The e-ink is not irritating the eyes while using the screen so should be a unique feature for Kindle Apps. On the other hand, due to the the same e-ink technology, apps with moving images don’t work on the Kindle. So most games or any app using video would be impossible on the Kindle.

No touching, please
One famously absent feature of the Kindle is a touch screen. I own the second version of the Kindle, the DX, and still everyone I hand it to starts by touching the screen. In the era of touch devices we live in nowadays, it’s very weird for people to see a brand new device and not being able to control it through a touch interface. I assume a touch interface isn’t easy to implement when dealing with e-ink technology, but the third version of the Kindle should definitely have one. Especially if we look at possible features for Kindle Apps, a touch screen is a definite must. But there’s good news on the horizon, recently Amazon acquired Touchco, a company specializing in touch screen technology. What other purpose would that acquisition have, besides improving the Kindle?

“Millions!”
Let’s have a look at some numbers now. Amazon CEO Jeff Bezos claims “millions” of Kindle devices have been sold up until Q4 2009. This is still nothing compared to the 42 million iPhone’s that have been sold worldwide, but this obviously isn’t a fair comparison. If half of the “millions” of people owning a Kindle would use it for more than just reading, you could assume there’s some sort of market in Kindle Apps for the best selling apps. And this market does still have to be made, so there’s a good opportunity here. But developers would do better if they spread their chances amongst the iPhone, Android, iPad and Kindle instead of just betting on one horse. This is also the case for publishers, their content should be available on the Kindle, but on all other internet-enabled consumer devices too.

Payments
After having used my Kindle for a couple of months now, I must say I kinda like the way payments are handled. It just works with your credit card details on Amazon, which are hooked up to your Kindle immediately after you buy it on Amazon. So just like the iPad will use the same payment system as the iPhone, Amazon can just use the one they have in place right now to handle Kindle App Store payments. Besides, even more so than Apple, Amazon is a party people have a trusted billing relationship with. The payment structure will definitely not be a limiting factor in Amazon’s app adventure.

Power to the publishers
One thing Amazon didn’t get right straight from the beginning is setting fair publisher revenue policies. Right now, publishers get 30% of the revenue made on their title. This also counts for everyone with a blog that wants it to be available on the Kindle. It should count for newspapers too, but I assume The New York Times must have agreed on some sort of special deal with Amazon. Although in Japan book publishers are already starting joint efforts to change Amazon’s policy. So probably Amazon will be forced to make some changes sometime soon. Also, the release of the iPad will give the bigger publishers a much better position in negotiating these deals. Because now there are two parties wanting their content, don’t forget the availability of people’s favourite newspaper or book publisher will be an important factor in driving Kindle and iPad sales. For the Kindle App Store however, Amazon has chosen to use the 70/30 model, just like Apple does for their App Store. So if you develop an app for the Kindle App Store, 70% of the revenue it makes will come your way.

The Guru Verdict:
The e-ink is a big disadvantage for functionality and a great advantage for apps with heavy reading or screen staring involved. Amazon seems to be in a right place to make this a success, the Kindle is the leading e-reader right now and very different from Apple’s iPad, which gives it a unique market position. Amazon has a trusted billing relationship with its clients so users will not hesitate to pay for something when browsing the Kindle App Store. In the end Amazon’s success will largely depend on the quality of the apps that will be developed for the Kindle. Now where have we seen that before?

Will the Kindle App Store succeed?

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