Harvard Business Publishing

As a loyal supporter of Amazon.com's Kindle e-reader, an email from a client titled "Throw that Kindle away!" was sure to catch my interest.

The email linked to a video demonstrating an electronic reader that a U.K. company called Plastic Logic plans to launch next year. The video is eye-catching. Plastic Logic's device--which is powered by the same E Ink technology behind readers offered by Amazon and Sony--is the size of a sheet of paper and has a stunning 13-inch screen.

As the company's name implies, the device is based on plastic technologies originally developed at Cambridge University. Plastic Logic is betting that lower capital costs and a simpler production process will provide it with a sustainable cost advantage over devices based on silicon.

A beautiful design and a sustainable cost advantage certainly sound troubling for Amazon. How worried should Amazon's CEO Jeff Bezos be?

Innosight's lenses suggest not too worried, unless Plastic Logic dramatically shifts its approach.

There are two problems with Plastic Logic's approach. First, the company appears to be targeting business users. Its demonstration showed how users can carry the device instead of bushels of documents.

What's wrong with that focus? After all, the business market is where the money is after all. And who likes being weighed down by thick stacks of paper?

But think about that target user. Hassled executives have defined patterns of behavior about how they interact with documents. They are used to flipping, scribbling, and shuffling through those documents. Sure, the weight of the paper can be cumbersome, but Plastic Logic faces an uphill climb if its device makes it harder rather than easier to review and comment on documents.

Even more importantly, Plastic Logic doesn't appear to be following a business model that can hold a candle to the elegant simplicity of the Kindle model. As an example of Kindle's simplicity, I recently passed the Kindle around a small group to which I was presenting. By the time the device got back to me, a friendly audience member had subscribed to The New York Times (Amazon let me easily cancel the subscription).

While Plastic Logic still has plenty of time to sharpen its market focus and develop a compelling business model, I'm not ready to throw away my Kindle yet. I continue to believe that Amazon remains in a great position to continue to build a booming growth business.