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The Amazon Kindle could enjoy iPod-like success

Kindle has been an unbridled success, and making its software available to competitors should help. How does its e-book strategy compare with iTunes strategy?

Amazon Kindle
Amazon is bringing the Kindle to all kinds of devices.
Screenshot by Nicole Lee/CNET

Amazon.com CEO Jeff Bezos spoke on Monday at the Wired Business Conference, discussing his company and the future of the Amazon Kindle.

After discussions on Google Book Search and other topics, Bezos sprinkled in a few tidbits of information that could have a lasting impact both on the e-book business and the tech industry as a whole. According to Bezos, he plans to break the Kindle business into two parts: hardware and software.

Amazon's e-books are already available on the iPhone. Users who want to access titles can download the Kindle app and buy books from Amazon's store. But Bezos wants to do more. He believes that the path to success is through sharing e-book technology with competing hardware makers.

"The device team has the job of making the most remarkable purpose-built reading device in the world," Bezos said at the conference. "We are going to give the device team competition. We will make Kindle books, at the same $9.99 price points, available on the iPhone, and other mobile devices and other computing devices."

It might be the smartest move Amazon has made yet.

When it was first released, I was suspect of the Kindle's opportunity for success. It was expensive, and I didn't feel that it adequately satisfied a desire in the market. I guess that I was wrong. Today, e-books account for 35 percent of Amazon book sales.

To further that success, Bezos is shying away from cutthroat corporate behavior. He wants his company to lead the way, but he also wants Amazon's library of e-books to be made available to competitors.

"We want to have the best electronic book store, and we want to have the best-built e-reader--not try to use one thing to advantage the other," Bezos told Wired magazine's Steven Levy.

It makes sense. Shortly after the launch of a DRM-free Amazon MP3 service, Apple also made its made its industry-dominant iTunes Store free of copyright protection, enabling consumers to use other devices and still buy songs in its digital shop. It gave Apple an opportunity to cater to users who had heretofore decided against an iPod and were forced to buy songs in other stores. By allowing its music to be played on any device, iTunes may be well on its way to enjoying even greater success.

Like the iPod for music, the Kindle might be a stellar device that easily bests any other e-reader on the market. By following Bezos' strategy, Amazon can simultaneously profit from its hardware and can ensure that it's getting a piece of the revenue from any device competitor that decides to support Amazon's e-book format.

Amazon is a retailer. And although it still profits off the sale of its hardware, the opportunities for earning steep profits on its Kindle store are too great to lock it down.

That's precisely why Amazon should play nice with competitors--and why, if its strategy plays out, Amazon could become the Apple of the e-book world.

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