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What about the Kindle? Lots of talk about it, but very few specifics: Jeff allowed that Kindle titles now account for 6% of sales of the 125,000 titles that are available both in Amazon's (AMZN) physical stock and in digital form. But without context, it's hard to figure out what that means. No word on device sales, when a next-gen Kindle will be out, etc.

Update: Some hazy details on the streaming service from Bezos, who we caught up with. The new streams will work for both rentals and purchases, and pricing will be the same as Unbox. The only difference is the delivery/storage method, and the fact that you can watch movies right away -- instead of waiting for them to download. "It's pretty cool," he said. Eager to hear more -- like if it'll work on Apple's (AAPL) Macs, unlike Unbox.

Photo: Asa Mathat, AllThingsD

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Last night we got to chat briefly with Bezos, who politely refused to answer any of our questions about his Kindle: No sales data, no idea when he'd be willing to release any, no opinion about any of the estimates released to date, no sense of what's suprised him about the device so far, etc. But we can confirm that he does indeed have that crazy, exaggerated horse laugh people always talk about. We're hoping Kara and Walt can extract more out of him.

This is just Walt and Jeff, one-on-one.

All in, including third-party products, Jeff sellings "tens of millions of products." Now moving to digital products, and their own hardware (Kindle). Why?

Jeff: Most of the extensions we've done over time, we've questioned, and outsiders have questioned: Intl, electronics, toys, shoes -- now have shoe-specific site. But new hardare? People look at that and say "what are these guys thinking?" Focusing on customer needs instead of our skills. Important to know skills, but if you only play to skills, eventually you'll be outmoded. So you need to renew yourself.

We've been selling e-books for years "but you'd need a microscope to find the sales". So we figured we need new device that would make e-book sales possible. Skill set to develop that hardware will take us 10 years, but we need to start.

Over last 5 to 6 months we have had to beef up supply chain, which is different than the one we're used to. But we hire smart, experienced people, and we have our own knowledge, which helps. For instance, I've been working with publishers to make price point reasonable [we believe this means subsidizing book price quite heavily].

How many Kindles sold? Won't share. But here's a new stat: "Title-by-title basis...Kindle unit sales more than 6% of total book sales" (of the 125,000 titles avail for Kindle). [Yikes! That is thin news gruel].

What happend with outage? We were too conservative. We've lowered price this week in part because we have supply chain fixed. "Kindle is selling well. We're extremely happy about it." Jeff is giving Walt nada. "Second version is not that near".

Walt talking nearly as much as Jeff. Believe he's asking him about future of books. Jeff says physcial books won't go away "but there is no sinecure for any technology" and amazing that books haven't improved for 500 years. Which means they're hard to improve. Now into standard Kindle sales rap - disappears when you hold it, etc. Just walking through Kindle features here, none of which are new to SAI readers.

Jeff acknowledges the "inadvertant button press" problem with Kindle. Says international versions of Kindle, obviously, will use different partners than Sprint to provide wireless capabilities. What about annotating books, like you can in real life? Not for a long time. But he believes current options (type in notes, save them) better than regular books.

People say they like the tactile feel of books. So how can Kindle compete with that? "I'm sure people love their horses, too. But you're not going to keep riding your horse to work." Jeff has figured out what smell of book is: Ink, paper, glue, mildew. Do we intrinscially like that smell? Don't think so -- it's associative with other things we like. "It's not the container, it's the narrative. Long-form reading is important for our society."

How do you fight feature creep? Camera/cell phone analogy. I like having camera on phone. But I still have a digital camera. So we may add some stuff, but not if it interferes with core purpose of device. Our device is not a cell phone. It's not a bunch of things." ..If you're trying to build a Web-browsing device, you shouldn't use electronic ink... not the right display technology for high-quality Web browser.

OK, but what if you could do it, would you? In that "constructed universe, yeah, you'd love to have a great Web browser." It's a really good companion for reading. The Web is really a great book.

Can you imagine day when Kindle is a meaningful part of business? "Yes, I can... a lot of things have to go right, we have to execute well..." What does meaningful mean? "We did $14 billion in sales last year, pick a fraction of that... won't give a particular figure" What about 10%? I don't know. [Jeff giving up absolutely nothing here. We don't feel so bad about last night].

How serious are you about other digital business? (TV, video, etc) "Very serious" very hard, because so many participants. "Video and music have that glamour element, which is very unfortunate, because it attracts... people." Will have for-pay streaming service starting next week. How big is that market, vs. ad-supported video? I don't know.

iTunes has high share of music, decent share of video. Do you see that as temporary thing? "Hard to know answer to that. They have executed so well, and that's the key issue for people" [sorry tech issue on our end missed this part will have to pick up].

If I were a video IP owner or content owner, I'd want my content distributed as many ways as possible. If you're a content owner, you want to get your content out to as many people as possible. That's why they make chocolate and vanilla. "So iTunes is going down?" "No, that's not what I said."

Talk about S3: Going over basics of cloud computing. "We live in a weird, multi-era decade right now, and have been living in it for a while, where people build their own databases." That makes no sense. Why generate your own power if you can hook up to the grid? "Elastic compute cloud" works same way: You can scale up or scale down. Makes no sense for companies to have their own servers.

Is this going to be a core busines for you guys? Will I think of Amazon as a cloud computing company? "If you're a software developer you may be". Mainstream consumer will think of us as e-commerce. "But this could be a meaningful business for us over time."

We backed into this business four years ago. We had found that interface between network engineering group and application development team was very complicated, much more than it should be. We set out, just for ourselves, to build a solution.

Economy trouble you? "No, we haven't seen that. I don't know what our growth rates would have been in a stronger economy, but things are going well." When gas is expensive, driving to store is expensive. That helps us. There are some positive factors in our business in that regard. Half-our deliveries done by US Postal Service. They're driving around anyway. It's super-efficient.

Qs from audience: Angry questioner wants to know why he can't transfer his Sony ebook titles to Kindle. What's up with that? Your music is DRM-free!

Jeff: Insists Kindle is "agnostic" to DRM [but this is disingenious]. Anyway, you can't lose titles you've bought, because Amazon keeps a copy for you. So stop worrying! "With music, we had to work with IP owners, but it took three years of working with them to get to that DRM-free solution. My own view is that DRM-free would not slow down sales." Re: DRM for books: "We can talk to publishers, but at the end of the day, it is their decision about how they want to do that."

Q: Should we have separate boxes for movies (like Roku)? I think separate boxes are an intermediate step, and eventually this will be integrated into TV.

See Also: SAI Kindle coverage.