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I wanted a Kindle. I was ready to buy a Kindle. The iPhone spoiled everything.

Amazon's Kindle sells for $365.

(Credit: Amazon)

I'm an avid reader of digital books and for months I had my eye on the Kindle, the digital reader from Amazon, with its high-contrast screen and PC-less book downloads. Then Apple announced that the iPhone 3G goes on sale July 11.

I'm now in second-guess hell.

I know Apple has said nothing about offering an e-reading application for the new iPhone. But what happens if Steve Jobs later surprises us or some developer turns the iPhone into a whiz-bang electronic reader? I'll tell you what happens, my Kindle ends up on eBay.

I can imagine a slick iTunes bookstore, stocked full of titles that are easy to buy and download--sort of like Amazon.com. Even if Apple decides against getting into book sales, the upgraded iPhone will be open to developers. I'm betting one has already written an e-reader application.

There's a huge opportunity here for some enterprising developer. The person could write a reader application for the iPhone and then sign licensing deals with top publishers. The developer could sell digital books out of their own Web store. The pitch to the publishers would be: "I have the best way for you to get on the iPhone."

Of course, if Apple, which possesses complete control over the iPhone application development program, is planning something similar down the line, then a third-party e-reader application might not pass. Last January, Jobs voiced skepticism about e-readers, telling The New York Times that people "don't read anymore."

This to some is a good indication that he's interested.

The iPhone offers more value than the Kindle.

(Credit: CNET Networks)

Regardless, all of this highlights the main problem with the Kindle: it's too much of a specialty device to appeal to a mass market audience. People want more value than the Kindle offers.

Sure, Amazon's the iPhone when it comes to providing a better reading experience. The Kindle features a 6-inch screen and E Ink technology, which is easier on the eyes than backlit displays. But the iPhone has all it needs to become a great digital-book reader: a 3.5-inch (diagonal) widescreen Multi-Touch display and 480-by-320 resolution.

I've read close to 20 books on my Palm Pilot TX and its 3.8-inch screen is plenty big enough.

Certainly, the Kindle's advantages as an e-reader aren't enough to trump the host of iPhone features: a phone on a new faster network, camera, video player, it holds photos, contacts, you can play games and there's the apps we don't know about yet. With the Kindle I get Web browsing and e-mail.

When you size up bang for the buck, it's all iPhone. The 16GB iPhone 3G costs $299. Of course that doesn't include network charges. The Kindle sells for $365 and that includes free wireless.

Brett Arends at The Wall Street Journal argues that if you read a lot, the Kindle can help you save money because e-books are cheaper than the paper kind. But he acknowledges that you have to buy 61 books before the device pays for itself.

Pacific Crest analyst Steve Weinstein predicts that global e-book sales at Amazon could reach $2.5 billion by 2012. If he's right, I'm thinking many of those sales won't be for the Kindle.

CNET News.com's Declan McCullagh and Tom Krazit contributed to this report.

Calling it the iPod of the book business, CitiGroup analyst Mark Mahaney says the Kindle e-book reader will generate three-quarters of a billion dollars for Amazon.com in less than two years.

That should account for up to 3 percent of Amazon's business. See his chart and reasoning here.

(Credit: Amazon.com)

His calculations assume that unit sales will grow from 189,000 by the end of this year to 2.2 million units in just two years. By then he assumes the price of the device will be just below $300. Mahaney also points out that Amazon does have the largest selection of e-book content.

Sure, Amazon has the e-book/e-book reader synergy going on, but still, his projections seem more than a little optimistic.

Besides the fact that the design leaves more than a bit to be desired, and it's expensive ($399 currently), his reasoning assumes people will completely change their reading habits, and that they'll be up for buying a separate device to do it.

More people would likely be onboard with the concept if it were rolled into their current device of choice, like a portable music player or smartphone with a decent-size screen.

Barely a month after Jeff Bezos' very public mea culpa over delays, Amazon's Kindle is apparently back on the virtual shelves.

The e-tailer's listing page for the e-book reader indicates that it's in stock and available for purchase, at the usual $399 plus free two-day shipping.

After the Kindle had sold out so quickly after its launch in November last year, there had been some speculation that the delays were caused by production problems or were planned deliberately to stoke more demand. But as Craver David Carnoy indicated, it was probably just a victim of holiday shopping madness.

If you happened to have visited Amazon's Web site today, you might have noticed that a large message from Amazon's CEO, Jeff Bezos, was plastered across the home page of the site. Basically, it was a big fat apology for Amazon's inability to ship its Kindle electronic book reader in a timely fashion.

Ever since it quickly sold out at launch, a lot of folks have been speculating about just how many Kindles Amazon had sold and whether the long delays in shipping were a case of production problems or a PR ploy designed to make the Kindle appear hotter than it really is.

Well, the note seems to speak for itself. People want the Kindle, and Amazon hasn't been able to make them fast enough. All that said, I still think this was a case of the company rushing to get the product out before last year's holiday season--and failing to iron out all the production issues before it went to market.

Of course, Amazon is new to the consumer electronics-manufacturing game, so this isn't shocking. The fact is, this is what happens when you're a pro at selling crap but not at producing it. Comments?

SAN FRANCISCO--Though times may be tough for other TV manufacturers, Sony says it isn't feeling a thing yet in its electronics division here in the U.S.

At a press briefing with reporters here Wednesday evening, Sony Electronics President Stan Glasgow said that despite indications of a weakening U.S. economy, all is well with the Japanese electronics giant.

"I don't think consumers buying consumer electronics yet feel that," Glasgow said. "Sony did particularly well during the holidays. It was the best in the history of Sony Electronics in the U.S."

A boon to Sony's bottom line has been the growth of its Sony Style stores, both brick-and-mortar outlets, and its online presence. Glasgow said Sony Style experienced a 34 percent growth in sales over the 2007 holiday shopping season.

Another high point was its TV business. According to data collected by market research company DisplaySearch, Sony lead all LCD TV manufacturers in the fourth quarter of 2007 with 12.3 percent of worldwide shipments, considered a major comeback for the company.

One of the things that appeared to help Sony in 2007 was its expansion of specific television models made to sell in Wal-Mart Stores and Target. Glasgow said the company is expanding that commitment to supplying those retailers with 40 percent more variety of TV models this year.

Glasgow kept the gloating to a minimum, however, when it came to Blu-ray's recent victory in the format spat with HD DVD. As one of the leading investors and supporters of Blu-ray, Sony does see prices dropping on standalone Blu-ray players over the next couple years, but it will be 2009 before a $199 unit becomes a reality, he said. Price drops will happen, but it needs to be done in an orderly fashion, Glasgow said.

"I don't see any reason to do it stupidly and lose money," he said.

In the meantime, Sony is "in discussions" with a number of partners in order to get them on the Blu-ray bandwagon. An Microsoft Xbox 360 console with Blu-ray is certainly "a possibility," he said.

But perish the thought that Sony will take trade-ins of now-obsolete HD DVD players. "Sony is not going to make up for Toshiba's sins," Glasgow said emphatically.

Other tidbits gleaned from the evening:

• Though 11-inch OLEDs are the largest size Sony is offering right now, bigger screen sizes are on the way--some day. But there are currently limits on exactly how big Sony can make them right now. Glasgow specifically said that there are major obstacles (mostly to do with the physics of creating the panels) to make OLED screens larger than 30 inches. "It would take another significant investment to get bigger than that," he said.


• Sony is apparently unfazed by Amazon.com's recent entrance into the electronic book reader market. "The Kindle has helped," Glasgow said. "I think the (Sony) Reader market needed a boost. We're selling more since the Kindle came to market."

Auctioneers at eBay were asking for more than double the retail price of Amazon's Kindle e-Reader on Friday.

A check of eBay at 2:45 p.m. PST showed prices for the e-Book reader went as high as $930. TechCrunch reported that a Kindle, which retails for $399, was bid up to $1,500 earlier in the week.

Has Amazon really discovered untapped consumer demand for digital-book readers?

The e-tailer, dabbling in electronics manufacturing for the first time, sold out of Kindles soon after introducing them last month. The device connects to the Web to download books--a feature that separates it from other e-readers that must sync to a PC to load a book.

Amazon has said it won't start delivering on new Kindle orders until after Christmas.

The company said it sold out of the Kindle in under six hours after the handheld went on sale. Some critics questioned how many Kindles Amazon had in stock. The company declined to say.

Steven Levy's Newsweek cover story The Future of Reading was so unabashedly reverential toward the new Kindle reader that I had to check twice to make sure the article wasn't a paid product placement. Though the official product review only took up three-quarters of a page, there's no mistaking the impression that the seven-page spread is about Amazon's Kindle and its potential as the electronic device that will "leapfrog over previous attempts at e-readers and become the turning point in a transformation toward Book 2.0. That's shorthand for a revolution (already in progress) that will change the way readers read, writers writer, and publishers publish." Other devices such as the Sony Reader and One Laptop Per Child XO laptop receive very brief mentions.

Despite much skepticism--and some downright harsh criticism--on the part of observers about the looks and marketability of Amazon's Kindle electronic book reader, consumers seem to be giving it the thumbs up.

The device, which the retailer started selling Monday for $399, quickly sold out, "due to heavy customer demand," according to Amazon. It will be in stock on December 7, and customers are instructed to order now "to reserve your place in line."

(Thanks to Engadget for bringing the sellout to our attention, and further noting that it's still unknown just how many devices Amazon has actually sold.)

With the Kindle, Amazon is hoping to succeed where hardware companies like Sony have failed. No e-book reader has ever been a market success.

The device weighs 10.3 ounces and uses "electronic ink" technology to mimic paper, with no backlight. The screen is black and white, for now anyway; Amazon executives have confirmed that E Ink, which manufactures the screen technology for Kindle as well as for other e-book readers like the Sony Reader, has a prototype of a color display.

The Kindle's battery will last several days to a week, company representatives have said, and, as shipped, it will hold about 200 books.

Amazon has released Kindle, its new e-book reader.

[Later update: my Kindle review is online now.]

Newsweek has published a lengthy article about it. CNET's coverage includes a review, a photo gallery, a Crave blog, and a News.com blog. That's plenty of factual coverage.

Amazon's Kindle e-book reader

(Credit: Amazon.com)

I won't rehash the basic features of Kindle, but I will try to compare it with the Sony Reader--now in its second generation and Kindle's primary competition. I will also talk about what I see as the strong and weak points of the Kindle design.

Disclaimer: This is all based on what I've seen and read. I haven't seen a Kindle in person. Yet.

First, I'm surprised by Kindle's industrial design. The unit has the same screen as Sony's Reader (or one with identical specifications), but Kindle is much, much larger overall--longer, wider, and more than twice as thick. Yet somehow it's only 1.4 ounces heavier--10.4 ounces vs. 9 ounces. The Sony Reader feels solid; I suspect Kindle will feel lighter than it is.

Kindle includes a keyboard to aid in searching stored content and browsing the Kindle e-book store. The keyboard, however, looks like it'll be in the way of reading, which is Kindle's primary purpose. The other buttons also look awkwardly placed to me--the page-turning buttons, for example, are on the right and left edges. They're so large that they basically are the left and right edges.

To my eye, Kindle is fairly ugly. Angular shapes, sharp edges, weird button placements, etc. I'm not all that impressed by the design of Sony's Reader either, but I think it looks much better.

Amazon appears to have devoted some of that extra volume to shock protection; Amazon's Kindle page includes a video of drop testing. I'm all in favor of such protection. I am constantly worried about my Sony Reader getting broken just from normal use--that's exactly what happened to my first-generation Reader, and Sony asked almost the same price to repair it as the cost of a new unit.

Also, Kindle seems to be pretty much limited to a vertical (portrait) orientation; there's no mention of landscape mode in the user guide (which is available online as a PDF). Sony's Reader works fairly well in landscape mode, which helps a little with extra-wide documents, especially in PDF format. But Sony's PDF viewer is pretty awful, so that advantage often isn't enough.

I'll give Amazon credit for trying something new as part of Kindle's design--the "cursor bar," a tall, skinny display alongside the main one that works with a scroll wheel to select on-screen menu options. The Reader has 10 buttons down the side of the screen; menu options are physically aligned. Kindle's cursor bar appears to be more flexible. Whether it's as easy to use remains to be seen, but I appreciate the fact that Amazon is trying to innovate.

The other surprising thing was Amazon's decision to use a mobile broadband connection through Sprint's EV-DO cellular data network...and to shield users from all the complexities of that service. It's called "Amazon Whispernet," which is a strange name, but what the heck. Customers don't have to maintain a separate cell phone account; there are no bills. The cost of browsing Amazon's Kindle e-book store is covered by Amazon; download costs are built into the price of the books, newspapers, blog feeds, and other services available from Amazon.

This isn't a completely new business model; cell phone companies have offered similar deals for a while, but this is the first time I've seen this approach applied to mobile broadband. There is some risk to Amazon; it could be expensive to support Kindle users who browse a lot but don't buy much.

I wasn't surprised to see that Amazon is suddenly the world's best place to buy e-books. Most New York Times bestsellers and other new releases are $9.99 or less. I searched Amazon's Kindle store and found thousands of titles at or under a dollar, although many of these were individual stories or articles. As a specific example, the novel Burning Tower by Larry Niven and Jerry Pournelle, released in December 2006, is priced at $5.59 in the Kindle store.

There's no need for a PC; everything can be handled through Whispernet. Amazon even keeps track of your purchases so you can download them again later if you have to replace or re-initialize your Kindle for some reason.

If you do have a PC, you can transfer files via USB. There's also an SD card slot. Kindle natively supports only a few different file types, however, so I hope that situation improves soon. Several other file types can be handled via translation, including Microsoft Word, PDF, and HTML documents and JPEG, GIF, PNG, and BMP image files. Sony has a slight edge here with native PDF and RTF support, and possibly a bigger edge once Adobe Systems' Digital Editions is available for the Reader, but I'll have to get my hands on one to see if Amazon's translation service works well enough to substitute for broader native file-type support.

I should be able to figure that out by Wednesday. Regular readers here can probably guess what's coming next--yes, I bought a Kindle. I couldn't resist! Stay tuned for a Gizmo Report as soon as I've had a chance to make detailed comparisons with my Reader.