I like where the Kindle (Amazon is a great technology company), and designing a business model around it is going to be tought. Michael Arrington on his latest Kindle rumor articlesays:
Kindle is currently tracking the iPhone/iTunes model - Amazon sells the Kindle for a profit and then makes more revenue on content purchases from the Kindle site that they run.
So far so good. Then things start to go sideways:
Imagine if Amazon launched a licensing program that gave hardware manufacturers the ability to build Kindle clones, along with an incentive to sell them at near-zero margins. Amazon would give those manufacturers access to the core Kindle hardware specs (there’s no real magic there anyway) and the right to call it a Kindle device so long as they also put the core Kindle software on the device. That software links the device to Amazon’s store, meaning downloads revenue flows through Amazon.
Cause that worked so well for Microsoft, right? If they are following the successful iPod/iTunes model, why would Amazon go down the Play4Sure road? One step at a time Michael. Amazon doesn’t have scaling problems just yet. On the other hand if you look at things from a reseller/scalability perspective it does make sense, just to earn commission on the book sales.
In my opinion Amazon should stick with the iPod/iTunes model for now, and license once the device/serices reaches a critical mass. This way, they’ll be able to offer a solid user experience, and migrate the paper users to digital version without causing too much pain.
*Note on the Title: By Windows success, I refer exclusively to their manufacturer licensing business model which allowed them to grow rapidly in the 90s and in no way due to their Windows product/engineering accomplishments.
Post a Comment