Rumor has it Amazon will unveil the second generation of its ebook Kindle at a press event next Monday. The device is expected to be thinner and cheaper, but still will lack certain functionalities the digital consuming public might expect. Beyond that, predictions for the device seem overly optimistic.
Most of the speculation stems from a single Citigroup analyst, Mark Mahaney, who also projects Kindle sales to reach $1.2 billion by 2010, rivaling the iPod in quick adoption. 
Mahaney speculates Amazon sold 500,000 Kindles last year, based on a filing by Sprint, Amazon’s cellular wireless partner for the device. Kindle 2.0 is expected to have improved page-turning functionality, but still no touch screen or color imaging.
Despite that—really, they can’t do color?—Mahaney estimates substantial adoption rates matching or exceeding the adoption rate in the first years following the iPod’s introduction. He also assumes owners will buy an average of a book per month.
Another report predicts a price cut to $249 to help boost adoption.
I’m not quite the dismissive poo-pooer Apple CEO Steve Jobs is/was in regard to the Kindle—his assertion that people don’t read anymore is patently absurd (says the writer to the Silicon Valley tech billionaire CEO, both of whom are jaded by their work and vested interests) and his theory is belied both by the success of the Kindle and publishing series phenomena like Harry Potter and Twilight; lots of people still read, especially young people.
However, though I can be a bit of a luddite because of my romantic attachments to paper, ink, and wooden shelves, I think Mahaney’s estimates are overly sugared during extra bitter times. While book sales historically have gone up during bad economic times, nonessential electronic gadgets sales have not.
Early adopter technophiles with truly disposable disposable income might buy the gadget and a book per month, but the rest of the struggling populace required for critical mass seem likely to stick to their paperbacks that don’t require an initial prohibitive investment. The critical mass required to make Kindle 2.0 a smashing success will be choosing between car payments (or heat, or health insurance, or shoes) and adding a neat new digital reading gadget.
And the neat new digital reading gadget will lose. Not because the gadget isn’t great—except, really? Amazon can’t do color?—but because in addition to competition from life’s essentials, it will face competition from other gadgets, good-enough ink-and-paper books, vacations, movies, restaurants, chess boards, knitting clubs, pets, backpacks, and everything else in the world vying for any imaginary scrap of cash left over at the end of the week. The iPod was introduced has the bubble swelled, not as it collapsed. People just aren’t going to be spending money this year.
Don’t get me wrong: I hope I’m mistaken for the good of the economy and reading (and the economy of reading) as a whole. But I just don’t see the Kindle reaching critical iPod mass by next year, not without subsidizing the gadget itself to get it into more hands.
