This morning Mike Arrington wrote a great advice piece to Amazon on the Kindle.
The gist of Mike's argument is that Amazon should offer Kindle up as an operating system and reference design. This would allow third parties to create Kindle compatible devices in the same way that Dell, for example, makes PCs compatible with Windows. This would create an ecosystem around the product which would be incredibly powerful. And at the same time, Amazon would still be doing what it really wants to do, which is to sell books. By offering their own product which they should continue to sell, they get to work out all the kinks without any meddling third party companies telling it what to do. But by opening up the platform, they really get to have their control cake and to eat their large marketplace cake too.
Interestingly, this is really what Google should be doing with Android. Google is indeed licensing the Android OS to third party phone manufacturers, but by not creating and controling an initial reference design they are leaving important pieces of the design to third parties, in a field (mobile phones) where important design elements can be critical.
Anyway, getting back to Kindle, I have been a fan of the product concept but I do believe it will be very hard for Amazon to build up the kind of market that they really need and should have with such a device without getting some help. I hope they take Mike's advice.