Wasn't the Kindle supposed to be firewood?

Amazon's e-reader device was supposed to get absolutely smoked by Apple's iPad, depending on which blogger blowhards you read. That's been far from the truth--at least so far.

Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
Caroline McCarthy
3 min read
Contrary to popular prediction, the Kindle isn't ready to be kindling just yet. CC: Flickr user Mynameisharsha

The second-quarter earnings that Amazon.com announced Thursday weren't quite up to par with what Wall Street had been hoping. But Wall Street had been hoping for good things, and the results were still pretty decent. One of the areas of growth worth highlighting the most for Amazon was all things Kindle--the e-reader device, and the huge marketplace of digital books available for it as well as for apps on third-party devices like Apple's iPhone and iPad and the Android mobile operating system.

In the earnings announcement Thursday, Amazon CEO Jeff Bezos characterized the Kindle system as an area of the company defined by "rapid growth."

Pardon the corny "Fahrenheit 451" nod, but right around when the iPad became a huge sensation a lot of people were expecting that the Kindle would soon be, well, kindling. The pricier iPad is far more functional, is stocked with an App Store of beautifully designed games, news readers, and other bits of developer magic, and it's even got a Kindle bookstore rival in the Apple iBooks app. And, perhaps most importantly, it's an Apple device. It's powered by Steve Jobs and his magical marketing machine; no offense to Jeff Bezos, but he can't hold a candle.

And the iPad has been a seriously huge success, and a surprise in itself because a whole lot of people had scoffed at the device's initial debut with "it's just a big iPod Touch." A total of 300,000 were sold in the first day when the iPad hit stores this spring, and in that same time 100 million apps and--more relevant to Amazon's success--250,000 e-books were downloaded.

But the Kindle numbers have proven truly impressive too. A few days before its earnings release went out, Amazon announced that more Kindle titles are sold than hardcover books now: in the past three months, 143 Kindle books were sold for every 100 hardcover books, and in the past month individually, it was 180 Kindle books for every 100 hardcover books. Amazon says that free Kindle books, including the 1.8 million public-domain titles that are no longer copyrighted, were not included in those figures.

So what has Amazon done to save itself? Well, the array of third-party apps that Amazon has released mean that Kindle titles can be read on the iPhone and iPad, Android-compatible phones, BlackBerry handsets, and desktop computers, and once a customer has bought a title once, it can be read on any of the devices. (It still can't be shared with friends, though, something that e-reader pessimists point out.) In effect, it's freed the Kindle brand from the Kindle device, making the purchase of its e-books more flexible and more open-ended. Kindle titles are also generally a few dollars cheaper than those in Apple's iBooks store, and the selection is broader to begin with.

Amazon also dropped the price of the Kindle this summer to $189 from $259 (granted, Barnes and Noble had just dropped the price of its Nook e-reader to $199). With the iPad priced at $499-plus, the Kindle is now firmly in a completely different price bracket.

This could change, of course. Consumer thirst for all things iPad could continue to escalate, especially if there are price drops, hardware upgrades, or new improvements to the iBooks store. So Amazon shouldn't get complacent--especially since these second-quarter results weren't what Wall Street had hoped they'd be.

But still. Kindle books, it seems, are not yet worth burning.