I have to admit, I'm drooling over the new Kindle from Amazon. I wasn't that interested in the first version, but this second edition looks like it has fixed a lot of the issues. I still wish it had backlighting, though. Having to clip on a normal book light to read at night seems a little kludgy.
That's why I'm very excited about the forthcoming ebook reader for the iPhone from Shortcovers. I know there are other ebook readers for the iphone out there, but this will be one of the first ones connected to a large library of ebooks for purchase. In fact, you can even buy one chapter at a time in a "pay as you read" model.
But, my real question in all of this is why are Borders and Barnes & Noble not in this market? They ceeded the online book sales market to Amazon in the 90s. Now they're going to miss the boat on digital distribution as well. Amazon knows full well (and I believe this too) that physical books are going to be sold less and less over the next decade. E-ink and flexible displays are going to make book and newspaper reading an entirely digital experience. It's really just a matter of time.
So, if Borders and Barnes & Noble want to survive, they should be working with their publishing contacts (the same ones Amazon has) to build a digital book marketplace. They should hire some iPhone developers and put together a great ebook reader application. If they don't, they will become dinasours and miss this market completely. They don't need to go the hardware route as Amazon has done. Afterall, that is expensive and time consuming. Instead, they should work with the hardware platforms that are in millions of pockets already - iphones, blackberries, etc.
As I write this, I think about Tim's post today about Netflix and how much guts (and smarts) it takes to work on a new busienss model that destroys your old one. This is what Borders and B&N need to do to survive.