Why can’t Amazon get its popular reader into Britain?

Urgent memo to Jeff Bezos from the reading public of the United Kingdom: Launch the Kindle in Britain now or risk losing the third-largest literary market in the world to four men in Oregon.

With hype about the Kindle 2 launch—scheduled for Feb. 9—already sweeping across U.S. tech blogs, you might think that Amazon is leading the world toward digital-publishing Valhalla. But across the pond, the e-book revolution is not being led by Amazon or by Sony or by any of the major literary publishers. It's being run by a tiny team of Oracle defectors, whose Portland-based firm Lexcycle—creator of the free application Stanza—has turned the iPhone into Europe's most popular e-book reader.

Amazon's Kindle has still failed to show up in London, despite months of expectation and the launch of every other major e-book device under the sun. Fourteen months since the Kindle was first offered to U.S. readers, Amazon's many loyal fans (the firm was recently voted the United Kingdom's third-favorite retailer) are still wondering why a device that smashed expectations in the United States and is currently sold out across the country four to six weeks in advance hasn't made it to their shores. The problem: A wireless network Amazon created in the United States, which seemed ingenious, has turned around and bit them on the ass, delaying not only their U.K. launch but (potentially) a giant pan-European launch that could capture a book market much larger than America's. Meanwhile, European readers have found another network to download their e-books from, using devices they already own.

Amazon may see the Sony PRS-505—a nonwireless version of the Kindle that already feels old—as its main threat in the United Kingdom and Europe. It isn't. The iPhone has already far outrun the Sony reader, which launched in Britain last September, with the Stanza application, amassing 325,000 European users (84,000 British) in the last six months with minimal marketing. To put that in context, that's 25,000 more users than Sony's reader has sold worldwide in the last two years. When I spoke to Lexcycle COO Neelan Choksi, he claimed Stanza's 1.1 million global users were now downloading between 40,000 and 60,000 books a day.

So, why hasn't the Kindle been let out of the bag? Blame the Whispernet network.

Whispernet is Amazon's wireless method for delivering e-books to Kindles. In many ways it's ingenious: Using existing 3G networks, Amazon brokers a deal with a telecom company that fixes the data-transfer cost of downloading a book. That cost is then factored into the total price a customer pays when buying a book, meaning there is no mobile-phone "bill" connected to Kindle membership. While true Wi-Fi networks are still limited to hot spots in urban centers, Amazon has cleverly worked out a way to create its own proxy global Wi-Fi network.