New Android app from Amazon may cannibalize Kindle 2 sales

Amazon has dominated the e-book reader space for a while now but it’s facing a slew of new challenges from the Barnes & Noble Nook and more recently from the Apple iPad and Google Editions. While the Kindle 2 has an E Paper screen that omits backlighting and emulates reading paper, Amazon is realizing that readers want to take books with them wherever they go. It plans to meet that need for even more users with a newly announced plan for an Android app.

While the Kindle 2 certainly is portable, it doesn’t fit in your pocket well, which can mean the difference between having a book with you or leaving it at home. iPad and iPhone both already have a Kindle app and now Amazon is pushing its content even more broadly with plans to build its own Android app. That means a whole new set of devices will be able to access e-books and your place will sync up between devices so if you stopped reading on page 192 on a Kindle 2 that’s where it would pick up on the Android app.

What about people who opt to download the Android app and avoid purchasing a Kindle 2 altogether? Amazon seems willing to take that risk, and indeed most of its profit likely comes from actual e-book sales rather than Kindle 2 hardware sales. The Kindle 2 is mostly a differentiation point that for some readers makes its selection of e-books much easier on the eyes.

But the e-book distribution space is getting more crowded recently with Amazon’s Kindle Store, Apple’s iBook program, and soon Google will soon begin serving up books with its Editions storefront. That in mind, Amazon’s move to make its content accessible on many devices becomes more understandable – the walled garden approach is a difficult proposition especially when users are increasingly demanding flexibility. Just look at Apple’s struggle to keep Adobe Flash away from the iPhone for a great story on users chafing against Apples beautiful but walled garden.

Amazon is adapting quickly, and the Kindle 2 already offers a unique reading experience. By keeping its users first and foremost, Amazon may still end up on top.