Amazon’s massive investments in technology shape the future for retailers everywhere.
By George Anders
Why: E-books are finally becoming a large, mainstream market.
Key innovation: Even as it seeded the e-book market with the Kindle, Amazon has made it easy for people to read e-books on other devices, such as the iPad.
Amazon.com led the charge in bringing electronic books into the mainstream with its Kindle e-readers. Thanks to its use of AT&T’s 3G network, customers can download books seconds after placing an order, without having to plug the device into a computer. The technology also keeps track of readers’ progress through books, even if they’re reading on multiple Kindles, phones, or computers.
Though Amazon hasn’t released exact sales figures, the company says that Kindle is currently the best-selling product line on its site. It also says that in 2010, it sold more electronic books than it did paperbacks.
Amazon.com has helped set consumer expectations regarding prices and distribution methods for e-books. Though Amazon faces intense competition in this market, especially now that Apple has introduced the iPad, the company has gained a head start by integrating the devices aggressively with its powerful retail site.
Challenges and Next Steps:
Amazon has worked to entice consumers to the Kindle by stressing its ability to offer bestsellers at $9.99 each. Publishers seem encouraged to renegotiate their deals with Amazon in light of Apple’s recent entry into the e-book market. Amazon has so far been able to use its retail dominance as powerful leverage in the negotiations, but the company will have to ensure that its tactics don’t result in a backlash from publishers.