Kindle wins e-reader war — for now

With Black Friday under its belt, Amazon (NASDAQ:AMZN) reported its best sales month ever for the Kindle in November. Even before Cyber Monday, when four million people shopped online per minute, the $259 Kindle had made its way to the no.1–selling product across all product categories on Amazon. That’s impressive considering a single-function device occupying a relatively new product category dominated a site populated with products spanning any category and for any demographic.

Although Amazon didn’t release any hard numbers for sales of its latest generation Kindle DX, the e-reader has clearly had a transformative affect on the online company. Some industry observers think it could also transform the textbook industry, as well as revive a dying newspaper industry (although there are certainly a fair share of doubters). For other e-reader-makers, the most near-term effect of the Kindle is that it is simply killing the competition.

Most notably, its success could hurt Barnes & Noble, which has been fairly successful to date. The bookstore giant has had to stall plans for the retail release of its Kindle-competitor, the Nook e-reader. The device was slated to hit shelves yesterday, but was pushed back until Dec. 7, at which time it will be available in “very limited” quantities in its highest-volume stores. The company has had a hard time keeping up with demand for the device, a challenge that Amazon also faced in last year’s holiday rush.

In fact, this is the first year that Amazon hasn’t run out of Kindle stock. After the first Kindle sold out immediately in Nov. 2007, it took Amazon months to restock. Last December, it sold out again and supplies weren’t updated until the Kindle 2 came out the following February. But with inventory covered this year, Amazon is the clear winner in e-readers for the holiday season, thanks to its popularity, brand strength and — more than anything — availability.

Next year, it could be a different story, as the space gets more competitive. Both the Kindle and Nook are powered by AT&T, but other vendors and carriers are vying for a piece of this attractive market. Sony has released its own line of e-readers, also waning in supplies this holiday season, and Asus and PlasticLogic have promised to launch in 2010. Outside of dedicated devices, competition continues to mount from smartphones and e-reader applications, promising a similar experience on a smaller screen.

The growing spotlight on e-books coupled with shortages in supply will be good news for Amazon, as it captures the valuable holiday shopper crowd (6% of U.S. consumers plan to gift an e-reader this year, according to Goldman Sachs), but next year the stakes will only get higher. If 2009 was the year of the netbook, 2010 is poised to be all about e-books.