Kindle iPhone app is 'huge,' says analyst

Computerworld - Amazon.com Inc.'s release today of an e-book reader for Apple Inc.'s iPhone and iPod Touch is a "huge" move and a "win-win" for everyone concerned, analysts said today.

"This is huge news, extremely important for Amazon," said Michael Gartenberg, an analyst at Interpret LLC, a Los Angeles-based research firm. "It extends the reach of the Kindle catalog to a whole new class of users and introduces the concept of the e-book to people who don't want to invest in a $359 device."

Earlier today, Amazon.com rolled out Kindle for iPhone on Apple's App Store. The free application lets iPhone and iPod Touch users read Amazon's e-book titles on their devices, synchronize the books they've bought between Apple's hardware and Amazon's own Kindle electronic readers, and download new titles via the iPhone or iPod Touch browser. E-books can also be ordered from Amazon's Web site via a browser on a PC or Mac; the Kindle e-reader will download the title to the iPhone or iPod Touch the next time the application is opened.

Unlike the Kindle reader, the new application does not link directly to the Amazon e-book store.

"Amazon's core business is selling books, and its job is to get those books on as many devices as possible," said Gartenberg. "And it has a chance of upselling some customers [to the Kindle] who want the functionality of a dedicated reader. This is a win-win for Amazon."

"How it helps Amazon is obvious," added Ezra Gottheil, an analyst at Technology Business Research Inc. "It would rather sell a mess of books than just a few electronic readers. But it's a win-win for both companies. For Apple, it increases the value of the iPhone and the iPod Touch. People now don't have to choose between the Kindle and an iPhone.

"It definitely makes Apple's devices more attractive," Gottheil added.

Amazon currently sells about 240,000 titles in Kindle e-book format, many of them for $9.99, and it is the only seller of the Kindle 2 electronic reader, which it prices at $359. The Kindle 2, which was launched in early February, but only started shipping last week, boasts an always-available wireless connection for ordering new titles and synchronizing multiple devices, including iPhones and iPod Touches equipped with the new Kindle app.

The application uses Amazon.com's proprietary Whispersync technology to bookmark a user's spot in an e-book, then synchronize that bookmark with a Kindle, Kindle 2 or other Apple device.

Some features found on the Kindle, however, have been omitted from the iPhone and iPod Touch e-reader. Apple's smartphone and top-end iPod can't subscribe to newspapers, other periodicals or blogs as with the Kindle. In addition, the reader will not read books aloud, and it doesn't allow users to enter notes, highlight text or conduct searches.

"I think that Amazon will have to add more functionality to the app," said Gartenberg. "They need to make it easier to buy books from the device, without having to go through the browser or a computer."

And Amazon may not be the only one to make changes, said Gottheil. "I think this makes it much more likely that Apple will bring out a supersized iPod Touch," he said. "The iPhone can't get any bigger -- it has to fit in your pocket -- but a larger iPod Touch, say, something the size of a paperback or the Kindle, would be a great platform for reading, as well as all the other things the iPod Touch does, like gaming and browsing."

Talk of Apple doing some kind of touch-based, tablet-format device has circulated since the company gave up on the Newton in 1998. But Gottheil believes that the new Kindle application may tip Apple into actual development.

"The world of readers is a substantial one, and it goes far beyond books," said Gottheil. "The iPod Touch and iPhone are tolerable for reading, but they just don't have the landscape of the Kindle. I can see Apple taking a stab at this."

Kindle for iPhone can be downloaded free of charge through Apple's iTunes App Store. It requires an iPhone or iPod Touch running iPhone 2.1 or later.