It’s not a knock on Kindle, which is, without a doubt, a game-changer. Here’s a device that is as big and weighs as much as a 200-page paperback, but can hold 1,500 books in its belly. Its always-on 3G connection enables a book to be downloaded from the Amazon website in 60 seconds. There’s an inbuilt dictionary to look up words and a ‘qwerty’ keypad on the bottom to type notes. List price: $259.

When Laura Porco, Director of Kindle Books, who flew down from Seattle to officially introduce Kindle to India, says “it is the most wished for, most gifted, best-selling product on amazon.com today”, it’s easy to see why. Amazon sold 500,000 units within a year of its launch in 2007. According to a Citi Investment Research report, Amazon should sell 1 million Kindles in 2009; and now that the e-reader is available in 100 countries, 3.5 million units in 2010. Citi has forecast Kindle-related revenue of $1.5 billion for 2010—about 7.8% of Amazon’s 2008 revenues.

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The E-Reader Files

Source: Company websites

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However, given what Kindle offers and doesn’t offer today, India’s contribution to those revenues is likely to be minimal. Says Frank D’Souza, Partner, BMR & Associates: “Selling in India will be tougher than a lot of markets, as per capita consumption of books is less and books are cheaper here.” Even if one assumes Indian buyers are able to warm up to the idea of a paperless book, there are two things that will keep a lot of them away: pricing and titles.

Price Barrier

The Kindle’s list price is $259, but an Indian buyer will end up paying about 50% more. Here’s why. At Rs 48 to a dollar, $259 is about Rs 12,400. Kindle can be bought only from the Amazon website. In other words, it’s an online purchase in dollars from a
retailer in the US, paid by credit card.

Since Amazon doesn’t yet have an office in India, the device will be shipped from the US. That means buyers will pay an import duty of $98.59, shipping and handling charges of $20.98, and bear the foreign exchange conversion cost of about 2%. All included, the Kindle will cost buyers in India about Rs 18,500. “The initial investment is a big barrier,” says PM Sukumar, CEO of HarperCollins Publishers India.

Even continuous investment—buying books, newspapers and magazines in an e-format—will pose barriers for Indian readers. Kindle owners can buy e-books only from the Amazon website. There, a Kindle book is cheaper than its physical edition. For example, The White Tiger by Arvind Adiga sells for $9.83 (Rs 470) on Amazon in its physical form. The Kindle version costs $8.99 (Rs 430). The differential would be savings for buyers in the US, but not for buyers in India, where books are cheaper. Adiga’s Booker Prize-winning novel sells in India for Rs 355—17% and 24% lower than the price of the Kindle and the physical book, respectively, on Amazon.

The reference point for Amazon is the dollar price. But the reference point for Indian buyers will be the rupee price in an Indian bookshop, which will throw up a large differential. “Amazon is not selling Indian editions or reprints on Kindle,” says Vikas Gupta, Managing Director, Wiley India. “It might not be feasible for it to reduce prices to Indian levels.”

Titles Barrier

The other disparity relates to the titles on offer. Although Amazon offers 365,000 titles on Kindle, that’s just 14.6% of the 2.5 million titles available on its website. Due to copyright and pricing issues, the titles available to Indian buyers are even fewer. Even in magazines and newspapers, coverage is limited, though it will only increase. “Our vision is every book ever printed, in any language, all available in less than 60 seconds, anywhere in the world,” says Porco. It’s audacious, and it’s a long way away.

At present, there’s hardly any presence of Indian writing in English. The popular Indian writers are barely there and there’s precious little beyond them. Even the titles available are priced in dollars, at a significant mark up to the rupee price in India. There’s not a single newspaper or magazine on Kindle at the moment. “We have initiated talks with Indian publishers for Kindle editions, but I don’t know when they will materialise,” says Porco.

The three Indian publishers we spoke to—HarperCollins, Hachette and Wiley—said Amazon hadn’t approached them. It’s possible that it might be talking to their parent, who are outside India. “We have a common global policy. So, they will come via our digital department in the UK,” says Thomas Abraham, Managing Director, Hachette India. “The business case has to be negotiated. Digitising won’t take time.”

Negotiating the business case is tricky. “To clock numbers, Kindle will have to offer Indian pricing and Indian titles,” says Gagandeep Singh Sapra, a technology buff. That will mean having a set up in India, which Amazon doesn’t have at present.

Also, Amazon’s leadership in e-readers is being challenged, by Sony and, most recently, by Barnes & Noble (See table: The E-Reader Files). It doesn’t worry Amazon. “We spend zero time thinking about the competition and 100% time focusing on consumers,” says Porco. But this is also the company that slashed the price of Kindle by $20 the day Barnes & Noble launched its e-reader, Nook.

In some ways, other e-readers offer more than Amazon. Sony is an open-format device, and doesn’t bind a reader to one site for downloads, the way Kindle does. The number of free e-books on the Internet is increasing by the day. Google has assembled a library of 1 million free e-books, which Sony e-reader can access, but Kindle can’t. For now, besides gadget collectors, Kindle will tickle only those in India who want to carry their book shelf with them or want titles not available here. But they won’t bring in the numbers for Amazon.