Amazon Kindles Interest In Content

When the Kindle e-reader first appeared 14 months ago, Amazon-watchers were surprised to see the e-commerce giant redefine itself as a gadget maker. But Tuesday, when Amazon.com released a free application for the iPod and iPhone that allows users to read its e-books on those devices, it cemented its original book-selling mission.

In other words, it's all about the content.

The Kindle software for the iPhone and iPod, which Amazon.com (nasdaq: AMZN - news - people ) Chief Executive Jeff Bezos first hinted at during the release of the Kindle 2 last month, allows users to buy and read any of Amazon 230,000 e-books on any of the three devices and seamlessly move them among the gadgets.

While the software gives up the Kindle's exclusive hold on Amazon's digital catalog, it taps into a potentially much larger audience for Amazon's e-books--Apple (nasdaq: AAPL - news - people ) has sold around 15 million iPhones, while Amazon had sold only around 500,000 Kindles at last count, according to an estimate by Citigroup analyst Mark Mahaney. And that, says Forrester Research analyst James McQuivey, means Amazon has definitively focused on selling e-books above selling e-readers.

"This puts a stake in the ground around the idea that they really want you to be able to access the content you buy from them on any platform. And that's something we haven't seen other major media initiatives do," McQuivey says.

Apple's iTunes store, by contrast, has traditionally sold content tied to its music players--a bid to sell more hardware rather than content. Amazon, McQuivey says, has now made clear it's taking the opposite approach. "Amazon is saying, 'This is about books. We want you to feel that you can read our books anywhere, and we want you to buy more of them,'" McQuivey says. "They're saying, 'We're not a Kindle maker. We're a content provider and a content liberator.'"

Amazon may be liberating its content, but it's not liberating its hardware. Even as the company's book-selling platform expands, it's not likely to become compatible with other content providers. That could give the e-retailer a stranglehold on the budding market for e-books, a strategy likely to rankle publishers.

 

In an essay for Forbes last month, tech publisher Tim O'Reilly criticized Amazon's decision to close the Kindle to non-Amazon content (see "Why Kindle Should Be An Open Book"). Unless the company opened the Kindle to formats like epub, which work across a variety of non-Amazon-sanctioned devices, the Kindle would become irrelevant in two or three years, he predicts.