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Creativity and the business of social innovation.

Is the Kindle Destined for SkyMall?

The hype around the iTablet is reaching a fever pitch with the Kindle increasingly looking like yet another example of Apple roadkill. If Apple can consume 32% of the profits in the mobile phone biz in less than three years, it should be no problem to swallow the nascent e-reader business in one quick bite. No sooner had Jeff Bezos graced the cover of Fast Company than the Kindle was pronounced dead by the digiterati (actually, it was "Kindle in Danger of Becoming E-books' Betamax," according to Brett Arends in the Wall Street Journal). With competition for e-readers heating up, will Jeff be able to defend his walled garden from rivals inside and outside the category that he built?

I feel some real loyalty to the Kindle. I wrote my first Fast Company posts the same week that Amazon launched the DX and used the Kindle as a prime example of "brand-led innovation." And I was recently interviewed by Lynn Neary at NPR on the topic. Coming from a product design company, I am always thrilled to see a digital company try its hand at physical devices (even if Amazon did poach two of frog's best industrial designers, Wilie Loor and Chris Green, to do it). For all of its faults, the Kindle has produced that crazed you-HAVE-to-try-this-device reaction from quite a few people. So what options should Jeff consider as the forces of doom are assembling around him? Here's a look at five strategies for building a sustainable advantage in the consumer electronics market.

1. The TiVo Strategy: Own a Killer Feature
In preparation for the NPR interview I talked with a good friend who is a Kindle nut. I asked for her input on what is working and not working about the experience. She is a voracious reader, consuming several novels a month. But then, sooner or later, she would get stuck on a particular book. She would have a hard time getting fully involved, and yet she wouldn't be able to give up on it either. Weeks would go by with little progress. When she bought the Kindle she hoped it would solve her "reader's block" with 250,000 books available on-demand. Giving up on books she can't get into should be a lot easier. But she gets stuck just as often. My friend's "reader's block" seems like a nice opportunity for Amazon to innovate on the basic reading experience. The Kindle could notice that your book consumption has ground to a halt and probe for reasons. They could offer an easier way to let you off the hook--return the book for half price, for example. Or Amazon could urge you on with an incentive. Call it "The Kindle Guarantee": You'll read double the books this year or your money back. As Steve Jobs famously remarked about the Kindle, "No one reads anymore." The Kindle has to sell READING, not just books. They could build (and copyright) a more intelligent "skip ahead" feature—just like Tivo allowed TV viewers to do with unwanted commercials—to keep you reading.

Amazon can stay ahead by exploring features that transform the very nature of books, from long term commitments to episodic subscriptions with a "season pass" feature. After all, the only thing keeping the book industry afloat at this point are blockbuster series like Twilight and Harry Potter. Jeff already seems to be thinking that way by serializing Stephen King as part of the Kindle launch. Graphic novels are another easier target. They lend themselves quite naturally to serialization and other non-linear reading innovations. Imagine reading a Sandman story and being able to skip back to the back story behind a particular villain or sidekick. Graphic novels and book series are huge draws with the youth market and could help establish the Kindle as an anchor product in the education market.

2. The iTunes Strategy: Own the Library
It is hard to avoid the Kindle versus iPod comparisons. The history of Apple's conquest of digital music is generally told as the story of Steve Jobs brilliance. But it is easy to forget that he got a huge assist from the very format that the iPod killed: the audio CD. Most people converted their analog music libraries to digital versions before Apple showed up, though they were stored on physical CDs instead of computer hard drives. That put Apple in a prime position to quickly digest our libraries, and before we knew it, we were locked in--iTunes customers for life.

Ever try to "rip" a book? Even Google hasn't been able to figure that one out as part of their digital library initiative. The migration to digital books will be much slower than the migration to digital music, leaving lots of time for competition and open standards to emerge and take over. It is not likely that Amazon will be able to build critical mass around their proprietary file format quickly enough to prevent a more open standard from prevailing. I wouldn't be surprised to see Amazon cave on this one.

3. The Wii Strategy: Own the Device
The new batch of Kindles are attractive products, a vast improvement over the original dud. But there is no hardware advantage to be found anywhere (unlike Apple's patented iPod scroll wheel). Touch is going to level the playing field even further within the next year. Who really wants to fumble with the cramped Kindle joystick nub? Once that happens all e-readers are going to look pretty much the same: thin, touch-based, e-ink slabs, with or without a physical keyboard in putty or...putty.

Amazon, Sony, PlasticLogic, and now Samsung will be forced to compete on minimal functional differences such as network speed (which they don't control), screen size, storage, color, and resolution. These sound a lot more like digital cameras than iPods to me. "Refresh rate" will be the next "megapixel," the obscure technical feature that is marketed to consumers in a vain attempt to make sense of a crowded field of undifferentiated devices. This will be very bad news for Amazon unless they can figure out a unique, and patentable hardware feature. One that transforms the experience of reading books the same way that the Wii remote has transformed the experience of playing video games. Given the trend towards minimal slabs across consumer electronics there is not a lot of room for innovation in hardware other than sensors and feedback. Perhaps the Kindle can be made more "cozy" through various forms of sensory feedback. It could sense the conditions in your room and radiate heat when you are staying up late to read on a cold night. The Kindle could serve as a blanket warmer or a hotplate for your coffee. It could sense when you are dozing off and play soothing music. Or wake you up with a cozy smell in the morning like fresh-brewed coffee or Cinnabon. That might make me reach for it before my smartphone as an increasing number of people are doing before breakfast. I could easily envision a set of sensory themes that can be downloaded and shared from one Kindle to another. This kind of feedback would help to stimulate the sense of contemplation that David Ulin, the book editor for the L.A. Times wrote about so eloquently in a recent post or the "flow state" that Jeff Bezos talks about as inspiring the Kindle in the first place.

4. The App Store Strategy: Own the Marketplace
While a lot of people bemoan the loss of the physicality of books, I am much more worried about losing the physicality of bookstores. I love to browse for books on shelves. Serendipity plays a much larger role in my book purchases than almost any other category. Amazon has known this for a long time and has built an empire out of innovations in browsing for books (and other products) online. While these features still don't add up to true serendipity, they are powerful tools that have instilled a great deal of loyalty in consumers (my personal favorite being Listmania). But the browsing experience on the Kindle sucks, with top level categories such as "fiction." Why has Amazon been so slow to bring these discovery innovations to the Kindle?

Apple made a clean divide between consuming music on the iPod and browsing for it on iTunes back in 2003. But they realized long ago that this divide was not sustainable. Apple has brought browsing directly to the device with the App Store on the iPhone/iPod Touch with huge success. Taking a page out of the Amazon playbook, Apple made user reviews—not just aggregated ratings—available directly on the device. Most companies would have been satisfied by being first to market with a device that you can enhance by downloading new third-party apps over the air. I give Apple a lot of credit for insisting on having individual reviews in release 1.0 of the app store. If Amazon is to build a sustainable advantage they must leverage their strengths in discovery (and add a touch screen to make discovery a lot more fluid and fun) before it is too late.

5. The MySpace Strategy: Own the Community
As the quantity of media available on any platform reaches critical mass, no simple browse mechanism is sufficient. Apple is finding this out the hard way as their App Store becomes less and less useful. The burden of discovery shifts more and more to social means. And Apple hasn't successfully built a social platform around any of their products (like mobileMe) because they are, well, products.

Amazon has a huge lead in this area, successfully building social layers within their online store long before it was fashionable on MySpace or Facebook. Amazon's online community is their biggest advantage in the e-book race, but one that they have not even begun to leverage. We all have too many books to read, and too little time to do it. If the Kindle is the only viable platform for sharing our recommendations, commenting on our favorite passages, and building our reputations as readers, then Amazon will stay out in front for a long time. Books need to go social to maintain their relevance—just like movies and music have done. And Amazon is perfectly positioned to lead the way.

P.S.: I thought I would take the opportunity to put the whole 1984 controversy to rest. For all the hand-wringing about "Big Brother," it is easy to forget that physical books walk, too. When was the last time you went to your bookshelf to look for a book and couldn't find it? Try going back to a bookstore to explain that they should give you a new copy of a misplaced book because you own the "lifetime rights" to the book. Good luck! Just because you bought something once doesn't mean it's forever. Ownership of media is overrated. And owning a physical book doesn't mean that it will be there anytime you need it. Physical books disappear all the time, but they will never appear on demand, like an e-book. 

As frog's Vice President of Creative, Robert Fabricant leads efforts to expand the impact of design into new markets and industries. An expert in design for social innovation, Robert is lead partner in Project Masiluleke, an initiative that harnesses the power of mobile technology to combat HIV and AIDS in South Africa. He is an adjunct professor at NYU's Tisch School of the Arts and is on the faculty of the School of Visual Arts in New York.