Kindle on the iPhone? The tentacles grow.
Amazon.com released an iPhone app to allow its Kindle subscribers read on their ever-present phone if they do not have the Kindle device with them. It also allows the millions of iPhone and iTouch users to have the Kindle formatted books on their smaller devices.
Most articles have reviewed the devices, but I'm more interested in the business models. As I've described in my article Reintermediation, Amazon represents the most aggressive business model for vertical integration and active outreach to its customers.
So why would Amazon voluntarily drop its monopoly on the Kindle format by extending it to its greatest competitor? Because it makes good business sense.
Of course, Amazon is betting that its specialized device is a better book reader than the iPhone can be. Amazon should be able to bank on that assumption or it should never have built the Kindle in the first place. But bravado is not reason enough to risk its monopoly position.
If Amazon loses the reader battle, it still wins. Kindle's proprietary format makes its publishing service the preferred format for the iPhone. To the extent it works well, it solves technical and aesthetic problems that Adobe and open source authors should be trying to fill. (I would also expect Amazon to eventually provide free or very low cost Kindle books published from the public domain - a competition to Google's book project.) At each step, Amazon becomes the source for the content.
Moreover, the key feature of the iPhone tool is the synchronization of the file, so that one can switch between the Kindle and the iPhone without losing one's place in a book. This feature promotes the intended relationship of Kindle to other devices. The Kindle is positioned as the primary reading tool with features that allow readers to read casually with the iPhone or other devices. Just as the iPhone has yet to become the primary way to watch video content (at least for most of us), it extends televisions and computer monitors to the always available model. Amazon is hoping to keep published books relevant to this same audience and make available the same behavior.
When watching business models, following the money remains the key axiom. Amazon's revenue is on the publishing end. Specifically, Amazon will make the most money with books written with Kindle in mind. Extending the Kindle to the iPhone creates a tremendous motivation for authors to forego traditional publishing houses and promote themselves directly for the Kindle and iPhone.
Amazon's reach into publishing has grown significantly with this little app. Readers, educators, and those who promote literacy should see this as a watershed moment to reassert "books" (soon to be as archaic a term as albums) into the mobile culture.
Only publishers and booksellers should be very worried. There just isn't much room for them in the Kindle world.
