Smashwords CEO Evaluates e-Book Market

Regarding today’s news that Amazon sold an estimated 500,000 Kindles last year, I asked Mark Coker, founder/CEO of Smashwords, the digital self-publishing company, for his reaction:

“If the number is accurate, I wouldn’t be surprised,” he said. ” Amazon has aggressively promoted the Kindle from day one, and despite its quirks, most customers seem pleased with it.

“A bigger challenge facing Amazon is to maintain the Kindle’s perceived relevance.  500,000 is impressive, but it’s not much more than the numbers I’ve seen for sales of the Sony Reader, and Sony doesn’t have the advantage of the Amazon.com platform, or the wireless component.

“I also wouldn’t put it past Amazon to publicly refuse to disclose numbers, all the while they pull strings in the background to influence these estimates coming out, with the grand plan of blowing away the estimates once they decide to go public with the real numbers.  Amazon’s good at setting low expectations and then beating them.

“We’ve also seen the iPhone come out of nowhere to challenge the Kindle as a veritable e-reading platform in its own right.  Witness the huge adoption of Stanza, the e-reading app put out by Lexcyle, a scrappy little startup that in under a year has seen its app downloaded over one million times…

“Another challenge for Amazon - there’s growing support for the open industry ebook standard called EPUB.  Yet Amazon, which owns Mobipocket, is pushing Mobipocket as the primary format for their books.  At the same time, I think there’s wariness from publishers about the increased power of Amazon given the decline in the brick and mortar bookstore world.  Note that Borders trades today at a market cap of only $32 million.

“My sense is that there’s room for all of the above devices to be wildly successful as e-reading platforms,” Coker concluded, “because the success of each device only serves to introduce more readers to the joys of e-books.”

If combined sales of the Sony Reader and Kindle have now reached the range of one million, that represents at least a symbolic milestone in the emergence of a profitable market for e-books. It’s safe to assume that most people who purchase one of these devices probably have also downloaded quite a number of titles.

Every newsletter, conference, and blog I’ve seen by or about the book publishing industry since joining BNET early in 2008 has speculated about the Kindle, and what it might mean or not mean for the future of books. If these new sales figures of one million readers prove to be accurate, that will cause many a publishing executive to sit up and take notice that the digital channel for books is now here to stay.