Kindle 2: More Than a Pretty Face

The ultra-sleek Kindle 2's smooth edges and keys are easy on the eyes, but its real beauty lies in its systems innovation

By Reena Jana

The younger, slimmer, and smarter sister of Amazon's (AMZN) sold-out Kindle electronic reader arrived on Feb. 9, at the same $359 price of its older sib. Gone are the angular lines and clunky silhouette that consumers and critics complained about when the first Kindle was introduced in November 2007. In their place is an ultra-sleek, tablet-like object with smooth, rounded edges and keys. But while the new object is gorgeous, tech experts say, its real beauty lies in its innovative service.

If Amazon Chief Executive Jeff Bezos has his way, readers will flock to the new Kindle because it's easy on the eyes. Talking up the device at a press conference in New York, Bezos says readers of "long-form text" will prefer Kindle to over a computer screen, any competitor's e-reader, and even ink on paper.

But while Bezos focused on the tablet's features, experts in consumer-electronic design, engineering, and marketing say Amazon's real innovation is how it's made e-book shopping easy. Customers can buy electronic versions of books via free, wireless access (through Sprint's (S) 3G mobile-phone network) without a PC. True, you have to own a Kindle. But anyone with the device can shop for 230,000 books—and subscribe to periodicals and blogs—at any place and any time, and have each title delivered in a minute or less, typically at $9.99 per book.

"A Beautiful Thing"

This vast, always accessible library is what distinguishes Kindle from other devices such as Sony's (SNE) e-Reader. "It's a beautiful thing to wake up and get on a plane with a Kindle, not have to sync it with a computer, and know your newspaper is on it," says Guy Kawasaki, managing director of Garage Technology Ventures, an early-stage venture capital firm, and former Apple fellow.

Paul Saffo, a technology forecaster who teaches at Stanford University, agrees. "The important thing about the Kindle is that it really is the first electronic book that works," he says. "The hardware is adequate, but most importantly, this is not hardware—this is a service congealed into a piece of hardware." He continues: "It's even more advanced than the iPod and the Apple (AAPL) store." "The iPod was the total package; similarly the Kindle was the first e-book that really created the entire experience: the reader, the content, and the built-in link. Those are hugely important things."

Kindle 2 is more than just a prettier version of its Kindle 1. Though the 10-oz. machine is only one-third of an inch thick—that's 25% thinner than an iPhone—it stores up to 1,500 books vs. 200 in the original. And it offers sharper on-screen images, with 16 shades of gray to offer graphic nuances. Amazon added these based on e-mails from Kindle customers, says Laura Porco, director of Kindle Books. "We're always listening to customers," she says. "We took their feedback to design some things: They said, We want Kindles to hold more books, and we want crisper images."

Paying Attention to Applications

In addition, the new Kindle has some brand-new features. It can read aloud any text it holds, though the voice is slightly robotic. And the updated device will sync wirelessly with other electronics capable of holding text files, such as a mobile phone. This new feature suggests that Amazon might be paying attention to rising competitors such as the iPhone, which, thanks to free software applications, allows people to scroll through Shakespeare's entire works or Sun Tzu's The Art of War on the go.

The sync feature is an improvement from Amazon's initial setup, says Don Norman, who co-directs a dual-degree MBA and engineering program at Northwestern University that focuses on design and business. With Kindle 1, content was available only on the Amazon-made device. Norman says that because of Amazon's "horrible usage restrictions," he refused to buy a Kindle.

But he's not mollified by Amazon's less-restrictive policy with Kindle 2. He'd like to be allowed to store content bought from other providers. "I have to buy from Amazon, and Amazon alone," he says. The restrictions might prompt a backlash just as Apple had before it recently relaxed its iTunes sharing policies.

Unfair Comparison to Netbooks

Others complain about the price. "Sure, they've made it thinner and more ergonomic and clearly addressed all of the hardware deficiencies, plus the syncing with other devices feature is nice," says Ross Rubin, director of industry analysis in the consumer-technology division at market researcher NPD Group. "But is there a market for a $360 book device with limited capabilities?" In other words, how many people are conspicuously consuming in a relentless recession?

But some say it's unfair to compare Kindle to similarly priced netbook PCs, which are smaller, lighter computers from the likes of Microsoft (MSFT) and Dell (DELL) that can be used to read available digital books—and do basic computer tasks, too. "Yeah, you could say, I'd rather buy a netbook for $350. But that comes with no content so readily available," says Kawasaki. "For Amazon to make a collection of books available just for the Kindle might make it worth it. Without that, of course, it would just be a crippled netbook."

Jana is the Innovation Dept. editor for BusinessWeek.