Interesting Article on Amazon and Kindle

BusinessWeek has an article on the Kindle 2 that is interesting because of the business issues, including the following:

• Analysts think that the Kindle is already turning a profit, which is impressive.


• Really increasing the Kindle's popularity would require dropping the price, but that would threaten Amazon's relationships with publishers - suggesting that Amazon is far from able to simply dictate terms, even with the large slice of the book selling business it represents.


• Amazon also makes more money on paper books than on e-books. One analyst guesses that the margins are 5 percent to 10 percent higher. That surprised me. I would have expected higher margins on the e-books.


• Jeff Bezos has said that e-books are now 10 percent of book unit sales, which means that their numbers are feeling increasing pressure. I'm not sure that I believe this figure, though perhaps the Kindle owners do buy that many titles.


• An analyst suggests that the Kindle makes sense only for a small percentage of the buying public, because most people wouldn't get more than five books a year, making the device too expensive.


• The iPhone may become the iPod of books, as Google creates a version of its online book search for the device.