On Thursday Amazon announced the February launch of a limited beta Kindle Development Kit (KDK), opening the popular e-reader to third-party developers. Many analysts and industry observers view this as a play by Amazon to fend off what is expected to be a a new entry into the e-reader market by Apple’s highly-anticipated tablet product rumored to be announced at Apple’s January 27 event.
Although the e-ink display of the Kindle will prevent the kind of game development seen for Apple’s iPhone and iPod Touch, it is anticipated that applications to be offered will include word games, travel guides, and other information-based services (no word yet on whether the Kindle’s audio system will be available to applications, so hold out hope for fart apps). Due to the nature of Amazon’s agreement with AT&T, however, intense data usage will result in charges being passed on to Kindle users at a rate of $0.15/MB.
It is anticipated that Amazon will employ the same revenue share model Apple offers to developers, with 70% of revenue going to the developer and the remaining 30% being retained by Amazon. For Amazon, this percentage could result in a net profit for a product where they are currently losing money or just breaking even with e-book sales. Given that the Kindle 2 has now been available for one year it is quite possible that the next-generation Kindle could be released to coincide with an operating system upgrade that supports the new application environment.