Amazon CFO fields Kindle questions, mum on digital video, music expansion

Amazon fielded a number of questions this morning during a presentation at the Credit Suisse First Boston conference. But what attendees really wanted to know more about, gauging by the questions they were asking, was the Kindle e-book reader, the company's plans to expand digital music and video offerings and how it plans to deal with the competition in this space, notably from Apple's iTunes and Wal-Mart.

Chief Financial Officer Tom Szkutak didn't give up a lot of details and seemed to avoid direct answers to the questions, sticking to a line about the company's continued focus on innovation and customer experience. But he did address the big question about whether third-party Kindle apps, such as the one in the iPhone, will hurt sales of its own device.

The app for the iPhone - and others that are in the works - doesn't provide the same experience as the Kindle itself, he said, though some people are content with the app alone. Szkutak's best analogy was the comparison of the digital camera to camera phones. For some people, camera phones are "good enough" for their needs. But others who are more serious about their photography will still invest in a digital camera, even though there's one on their phones.

There are some people out there who are serious readers and want a device dedicated to reading, not something that does many things. That's what the Kindle provides. Still, another participant at the conference wanted to know more about the consumer's return-on-investment for the Kindle, as well as the impact on book publishers who are still printing paper books but risk an excess of inventory as e-book sales rise.

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Szkutak said that customers really have to do their own math to calculate the value of the Kindle. There are serious readers who want the dedicated device and will see the convenience factor as being worth the investment. As for the publishers, there are decisions that need to be made about the number of copies to print, the costs associated with that and the demand for the book.

"With the Kindle and digital text, you never run out of stock and you don't have all the associated paper costs," he said. "There are a lot of advantages for the system and, ultimately, for the customers in the long run."

In terms of other digital media offerings - such as digital video in the company's VOD offerings and digital music in its online mp3 store - Szkutak didn't have any specifics to share, other than to say that the company wants to offer a "vast selection of both" so that customers know that they can find what they're looking for when they come to Amazon. As for competition, Szkutak said the company has a long-standing policy of not commenting on what others might or might not be doing.