Amazon's New Kindle Is Another Brick in Its Digital-Reading Wall - Businessweek

For the last six years, Amazon (AMZN) has constructed a nearly unbreakable hold on the digital-reading market. Its willingness to set disruptively low prices on e-books has drawn most of the attention, but the company’s Kindle hardware-and its ability to weave together attractive new features that broaden the reading experience-is just as responsible for Amazon’s dominance.

Amazon announced details today of its new Kindle Paperwhite, and its sixth-generation electronic reader again shows why the company has about 60 percent of the e-reading market in the US The new Paperwhite has the same glowing screen as last year’s model , along with the expected improvements in processor speed, screen contrast, and the receptivity of the touchscreen. Amazon says pages now turn faster, and it notes the device’s integration with Goodreads, the social network for readers it acquired earlier this year for an undisclosed amount. A Wi-Fi-only model starts at $ 119 (it will show ads in screensaver mode) and will start shipping at the end of the month. A 3G model costs $ 189 and won’t be available until November.

The new Kindle features really show how Amazon Chief Executive Officer Jeff Bezos is, link by link, constructing a wall around his digital-reading ecosystem that manages to be both alluring to readers and virtually insurmountable for competitors. Owners of the new Kindles who are members of Amazon Prime will have access to 400,000 free books in the Kindle Owner’s Lending Library. A new page flip feature allows readers to skim back and forth within a book, solving a well-known hassle in digital reading. My favorite new feature is called Vocabulary Builder. Exploiting its well-known expertise in the cloud, Amazon will store all the vocab words that readers look up while reading and then allow them to quiz themselves with flash cards. (I wish I had this 20 years ago, while I was studying for the SATs.)

Amazon also unveiled MatchBook, a program that allows customers to buy discounted digital versions of books they have already purchased in print. (Publishers will have to agree to make their books available for the program.) It’s similar to Amazon’s AutoRip program in music, which furnishes free digital copies of songs that customers have already bought as physical CDs on Amazon.com. Bezos is parlaying Amazon’s past dominance as a seller of physical media to strengthen its position on the new digital frontier. It’s a feature that beleaguered Barnes & Noble (BKS) can ‘ t compete with.

A further interesting aspect to Tuesday’s Kindle announcement is that it came via press release. For the last two years, Bezos has been holding press conferences to unveil Amazon’s latest hardware offerings. This relatively quiet announcement suggests either that Amazon doesn’t have enough on tap to hold a physical event-or more likely, that the lineup is so loaded the company wanted to get this out of the way first.