Amazon may be planning to expand into Australia with GSM version of the Kindle

Giant US etailer Amazon may be finally looking to open an Australian outpost after years (and years) of speculation that they were planning to head across the pacific.

The evidence comes from the Sydney Morning Herald (SMH), who reported August 17 that Australia’s second largest newspaper publisher Fairfax had rejected an offer from Amazon to put its papers (including the SMH) on Amazon’s Kindle ereader. The same report also noted that News Ltd (the Australian arm of News Corp, and Australia’s biggest newspaper publisher) was “looking beyond Amazon at other devices,” suggesting that they to had been approached by Amazon.

What’s missed in the article is the details on the distribution side. Amazon doesn’t have a presence locally, and doesn’t ship electronic goods to Australia, citing “export restrictions” as the reason why. It’s not clear whether these restrictions were legal, or imposed by manufacturers; certainly it’s not hard to get items listed on Amazon shipped to Australia from the United States via eBay sellers for example.

Even if there wasn’t any legal restrictions, Amazon then hits import rules in Australia, including customs issues and GST; items under AU$1000 in value can be imported without duty, but this is applied to individuals. Then there’s the issue of wireless internet access: Amazon would require a local partner, and even then they’d need a new version of the Kindle because the current version runs on CDMA, while all mobile networks in Australia are 2G/3G GSM.

The SMH claims that the rejection by the newspaper publishers might stop Amazon selling The Kindle locally, completely ignoring the key fact that newspapers aren’t the main driver of Kindle sales (it is after all an ereader, not a newspaper reader alone.) Indeed, the SMH article borders on outright stupidity, like this quote

The decision by Fairfax paves the way for a two-way contest between Sony and possibly Apple as the dominant reader for the digital generation.

Whether Amazon will balk without newspaper deals in Australia is yet to be seen, but likewise if they’ve already had discussions, their plans to enter the Australian market in one form or another would already be well advanced.

It’s unlikely they’d sell the item from the United States in US dollars to Australia, which leaves three possibilities: they offer the Kindle and other items in Australian dollars from the United States, they set up shop in Australia and sell it locally online, or they sell the Kindle through a third party. The last option is unlikely, but not impossible, the first option isn’t out of the question, but the second option makes the most sense.

As a long suffering Australian who has longed for Amazon to set up shop here for the better part of 15 years, they can’t come quickly enough.