There are those who say that, when the Amazon Kindle launched in November 2007, it had little to no competition. That seems to be a little harsh on the Sony PRS reader, which was a perfectly decent reader in its day (Sony have now released upgraded models). The fact is that the Kindle offered significant user benefits which had not been previously seen in ebook readers up to that point in time. Wireless connectivity - with no monthly fee, was a big bonus as was Amazon's large selection of titles available for the Kindle.
In February of 2009, Amazon released the Kindle 2 which featured faster page turns, longer battery life, increased storage capacity and was lighter, slimmer and more cosmetically pleasing than the original Kindle. The Kindle DX followed in June 2009, and was basically a larger display version of the Kindle 2 - although it did feature native pdf handling and an accelerometer which auto rotated the screen view when the device was turned on its side.
Since these two latest Kindles were launched, there has been a marked increase in the ebook reader marketplace competition level. Sony now offers a whole new range of readers and Barnes and Noble have entered the market with their Nook reader. Other companies, such as Apple, Microsoft, Asus and Plastic Logic, also have their own readers currently in the development process. A lot of these new readers offer, or will offer, features which beat the Kindle. If the success of the Kindle was ever genuinely the result of a lack of competition, then that is certainly not the case today.
Amazon has certainly responded to the new challengers. The price of the Kindle 2 has dropped by $ 100 to $ 259 since its launch. There have been firmware updates which have increased battery life, extended the duration prior to entering screen saver mode, introduced native pdf handling for the Kindle 2 etc. Audio menus to assist blind users are being introduced and Kindle "Apps" for the iPhone and the PC have been introduced. The Kindle 2 was also launched on the international market, where Amazon will doubtless be hoping to achieve the same 60% market share that it currently enjoys in the USA.
However, most of these changes have been, somewhat uncharacteristically for Amazon, in reaction to the activity of the competition. It seems unlikely that Amazon has run out of ideas for what is now its number one selling product - so when can we expect to see major changes and what might these involve?
The inclusion of some kind of touch screen control functionality must surely be top of the list when new features are being considered. A large number of the new readers include this and it appears to be a feature which is valued by end users. A color display would also be something that a lot of users would value. However, it seems improbable, given the current state of the technology, that this could be made available in a cost effective manner for the next generation Kindle. It would certainly be a huge coup for Amazon if they did it - so let's not rule it out completely.
Other, less hardware-centric, changes may also be in the offing. Many of Amazon's competitors are adopting the ePub format for publishing ebooks. Currently, Amazon use a proprietary format which means that, aside from using apps with your PC or iPod, Kindle books can only be read on the Kindle reader. The ability to transfer ebooks from one reader to another, regardless of the readers brand, will be a consideration in future. People will want to be able to treat ebooks just as they do "real", paper books - and that includes lending them to their friends and family when they're done.
As to when the next generation Kindle, let's call it the Kindle 4, might appear, it seems highly likely to be sometime in 2010. The market is developing and growing so rapidly that Amazon can't afford to wait too long between upgrades. The Kindle has very rapidly become Amazon's number one seller. They will simply not allow their competition to steal a march on them.
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