The idea of a dedicated e-Reader was born. Bezos not only wanted to create an e-Reader for long-form reading but wanted publishers to adopt the e-Book format. The challenge, however, was the lack of expertise in developing hardware.

Bezos placed his bets on Steve Kessel, who was heading the book category at Amazon at that time. Sometime in 2004, Bezos called Kessel into his office and told him to lead the digital efforts “Your job is to kill your own business,” he told him. “I want you to proceed as if your goal is to put everyone selling physical books out of a job,” writes Bloomberg Businessweek writer Brad Stone in The Everything Store, a biography of Amazon. There was fear that if Amazon didn’t push hard in this category, then Apple or Google would. And when Kessel asked Bezos what his deadline was on developing the first hardware product, Bezos apparently told him, “You are basically already late.”

Kessel had no prior knowledge of making hardware, so he headed over to Silicon Valley and started meeting hardware experts from Apple and Palm. Kessel finally hired Gregg Zehr, former VP of hardware engineering at Palm Computer to lead the Kindle project. Jateen Parekh, a former engineer at set-top box maker ReplayTV was the first employee. Kindle was developed at Lab126, the secret hardware lab that was set up in 2004.

Initially, Zehr and his team were not told what product they would be working on. They thought that Amazon would want to develop an MP3 player or set-top box. Soon Amazon told them to start working on an electronic reading device.

Zehr and his team decided to power the e-Reader using e-ink, instead of traditional TFT and LCD displays that most of the previous e-Readers had come up with. The only e-Reader that used E-Ink was the Sony Libre, but it was a massive failure.

The Kindle was designed to be a single-purpose device, rather than a multifunctional device that invites distraction.

The Kindle was internally known by the name of Fiona. The name was taken from Neal Stephenson’s The Diamond Age, a novel about an engineer who steals a rare interactive textbook to give to his daughter, Fiona.