Wire: BLOOMBERG News (BN) Date: Oct 7 2009 7:32:07

Amazon.com Unveils Overseas Version of Kindle Reader (Update1)

(Adds Gartner comment in sixth paragraph.)

By Joseph Galante
Oct. 7 (Bloomberg) -- Amazon.com Inc. introduced an
international version of its Kindle electronic reader that works
in more than 100 countries and lowered the price of its U.S.
version by $40 to $259.
The international Kindle begins shipping Oct. 19 at a price
of $279, Seattle-based Amazon.com said today. Until now, the
device was only available in the U.S.
Amazon.com, which introduced the Kindle in 2007, is trying
to extend its dominance in the electronic-reader market to the
rest of the world. The company controls about 45 percent of e-
reader sales in the U.S., followed by Sony Corp., which has a 30
percent share, according to ISuppli Corp., an El Segundo,
California-based research company.
“We have always had customers in countries all over the
world buying English-language books from us,” Chief Executive
Officer Jeff Bezos said in an interview. “Now those customers
can get English-language books in 60 seconds wirelessly, instead
of waiting two or three weeks.”
The international Kindle has a 6-inch (15-centimeter)
screen and looks identical to the entry-level U.S. version. It
will download books via third-generation mobile-phone service
from AT&T Inc. and its partners. Users can access more than
200,000 English-language books and more than 85 newspapers and
magazines.
“Vendors are jockeying for market position to meet demand,
a very different situation from when the first wave of e-books
hit the market,” Allen Weiner and Mike McGuire, analysts at
market researcher Gartner Inc., wrote in a report last month.
“At that time, vendors had to justify the product’s existence
as much as anything else.”

Electronic Library

The U.S. Kindle store has more than 350,000 books. More
than 75,000 titles have been added to the store in the past five
months, Amazon.com said. Most Kindle best-sellers cost $9.99.
Customers don’t pay wireless fees to download electronic books.
Sales of electronic titles are narrowing the gap with
traditional books, said Bezos, 45. For every 100 printed copies
of a title sold, Amazon.com sells 48 Kindle books -- assuming
the book is available in both versions. That’s up from a rate of
35 digital books five months ago, he said.
“People love reading Kindle books,” Bezos said. “It’s
that simple. There are so many advantages over a paper book.”
Amazon.com offers two Kindles in the U.S. In addition to
the basic model, there’s a larger version called the Kindle DX,
which costs $489. It has a 9.7-inch display that’s designed for
reading newspapers and textbooks. The company will introduce an
international version of the DX next year, Bezos said.

IPhone Version

The company faces growing competition in the market. IRex

Technologies BV will sell an e-reader for $399 at Best Buy Co.
by the end of the month. It plans to introduce a touch-screen
version by the first half of next year. Another company, Plastic
Logic Ltd., expects to release an e-reader next year.
Amazon.com has teams building Kindle applications that will
work on a number of other devices, Bezos said. The Kindle has an
application for Apple Inc.’s iPhone and iPod Touch.
Amazon.com will make $1.9 billion in annual revenue from
the Kindle by 2012, said Sandeep Aggarwal, an analyst at Collins
Stewart LLC in San Francisco. That’s up from about $300 million
this year, he estimates. Amazon.com doesn’t disclose Kindle
sales.
Electronic books are outpacing the book market as a whole.
Digital book sales more than doubled to $61.2 million in the
first half of the year, according to the Association of American
Publishers in New York. Total book sales rose 1.8 percent during
that time.

Limit Size

Even with consumers increasingly embracing electronic

editions, the high price of e-readers may limit the size of the
market, said Sarah Epps, an analyst at Cambridge, Massachusetts-
based Forrester Research Inc. Amazon.com and Sony will have to
drop the price of e-readers to about $50 if they want consumers
to flock to the devices, she said in a report last month.
Epps estimates that about 3 million e-readers will be sold
this year. The maximum number of U.S. consumers who would
consider buying the devices at $199 -- the price of Sony’s
cheapest version -- is 25 million, she said.
Amazon.com rose $2.24, or 2.5 percent, to $90.91 yesterday
in Nasdaq Stock Market trading. The shares have gained 77
percent this year.

For Related News and Information:

Amazon.com earnings: AMZN US <Equity> TCNI ERN <GO>
New Amazon.com products: AMZN US <Equity> TCNI NP <GO>
Amazon.com management: AMZN US <Equity> MGMT <GO>
E-commerce stories: NI ECOM <GO>
Top technology news: TTOP <GO>
Top consumer and retail stories: RTOP <GO>

--With assistance from Matthew Campbell in London. Editors: Nick

Turner, Jonathan Thaw

To contact the reporter on this story:

Joseph Galante in San Francisco at +1-415-617-7163 or
jgalante3@bloomberg.net
To contact the editor responsible for this story:
Jonathan Thaw at +1-415-617-7168 or jthaw@bloomberg.net

[TAGINFO]

AMZN US <EQUITY> CN
SNE US <EQUITY> CN
AAPL US <EQUITY> CN

NI US
NI WA
NI RET
NI CONS
NI HOU
NI ECOM
NI TEC
NI CEO
NI PUB
NI MED
NI NP
NI COS

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