Kindle 2: Still Expensive

Megan McArdle loves her Kindle, but says that Amazon (AMZN) doesn't want to have "a glut" of Kindles if the new Kindle 2 fails to sell as well as the original.

My feeling is that having too many Kindles in stock is not going to be much of a problem for Amazon, which desperately wants to own the next iPod. The main reason why everybody has an iPod is that, well, everybody has an iPod: the network effects on this kind of thing are extremely important, and you're much more likely to buy a Kindle if someone you know has one.

The worst-case scenario is that the Kindle 2 doesn't sell at $359, and Bezos has to lower the price to sell more. Once they're sold, those Kindles will generate just as much extra revenue for Amazon, in the form of eBook revenue, as the full-price devices.

I do think the price is still too expensive -- but the problem is that it comes with a lot of "free" wireless data, which is hard for Amazon to discount too much. Eventually, however, I can see the Kindle being a serious revenue-driver not only for Amazon but also for newspapers, magazines, and other web publishers. I'd pay good money to be able to read all my RSS feeds, constantly updated, on the Kindle -- but it would have to be a flat rate, not the per-blog pricing model the Kindle currently uses.

What seems certain is that Sony has lost the eBook reader wars just as it lost the pocket music-player wars. Once Amazon figures out a way to take the Kindle international, Sony's Reader is toast.

Comments

[WhoWantsARi...:]

Until the Kindle handles industry-standard formats like pdf, people like myself won't be even slightly interested, at *any* price. There is a huge opportunity for someone (Apple?) to re-think the whole DRM nonsense.

Feb 09 12:34 PM

[Nick Waddell:]

WhoWantsARiskFreeWorld...

I think this may be one of those halfway steps towards figuring out the DRM. I think you are right in that its not a completely killer app yet, but stuff like this is a step in the right direction.

Feb 09 12:39 PM

[Harry Tuttle:]

I could be very wrong on this, but I have a hard time equating the ipod, which is a passive device (you can do other things when you listen to music) with the Kindle, which is an active device.

How many people do you know who listen to music regularly?

How many people do you know who read books, newspapers and/or magazines regularly? Of those who read magazines, would they "read" them anyway without glossy photos? How does People look on a Kindle?

Feb 09 12:42 PM

[raytayzmd:]

...what I don't understand is what keeps Kindle from being modded into an Ipod?...with a little homebrew, I transformed my daughters' nintendo DS's into web browsers, book readers, music makers, movie players, calculators -- now if I could just figure out to get them to receive phone calls...

Feb 09 03:22 PM

[Tom B:]

Black and White. How quaint. Will it play my MP3's? Seriously, for a LOWER price you could get an iPod Touch, in full living color.

Feb 09 03:28 PM

[Francis:]

Not to be a Kindle fan boy but

- it handles several formats, PDF included
- as for a black and white screen vs. an iPod touch; I can't read the web on a touch ( I have one, great mp3 / video player, but sucks for browsing.

If I had a high quality screen that is easy on the eyes, I'd happily give back 2+ hours of screen time on my laptop in trade for this device.

I have a LOT of PDFs and ebooks I get off the net; I can finally put them on a device I can read easily (I hope, I haven't seen the screen on a live kindle). That alone is worth the price to me.

And I can load up all my own documents for free.

it's not an ipod, which is a different usage model...

Feb 09 03:35 PM

[gabbars:]

PDF support in Sony is the best by far and you don't pay for putting your own files on the thing like you do on the kindle either.


On Feb 09 03:35 PM Francis wrote:

> Not to be a Kindle fan boy but
>
> - it handles several formats, PDF included
> - as for a black and white screen vs. an iPod touch; I can't read
> the web on a touch ( I have one, great mp3 / video player, but sucks
> for browsing.
>
> If I had a high quality screen that is easy on the eyes, I'd happily
> give back 2+ hours of screen time on my laptop in trade for this
> device.
>
> I have a LOT of PDFs and ebooks I get off the net; I can finally
> put them on a device I can read easily (I hope, I haven't seen the
> screen on a live kindle). That alone is worth the price to me.<br/>
>
> And I can load up all my own documents for free.
>
> it's not an ipod, which is a different usage model...

Feb 09 05:29 PM

[zalo:]

C´mon...why buying the crappy kindle when for some bucks more you can buy a standard laptop. Though it is a nice concept to have something to read books with, it will not have anywhere near the impact of the Ipod. Why?

First of all, people still like to buy paper books because, apart from the reading amusement, books are good for shelves. People want to put them in places where they can be seen. They show who we are, what we like, what we have studied. You cannot do that with the kindle. Can you imagine a decent office without books??

Second of all, an Ipod gives you a kind of progressive, modern, young look. You don´t get that with the kindle.The ipod gives you games, and other stuff. It delivers more than music.

Third, it IS expensive. 300+ bucks is quite expensive for a black and white screen, nothing new screen. Can i read books on my laptop? Yes. So why buying the extra bulky kindle?.

Put a phone, music and a kindle together and you probably will get something. But hey, that´s a laptop.

Feb 10 12:32 AM

[Marcap:]

"C´mon...why buying the crappy kindle when for some bucks more you can buy a standard laptop.."

I agree completely. After all, $359 is as expensive, if not more so, than most of the new line of 8.9" notebooks, which obviously can do so much more because they are real computers and not just read-only monitors.

Feb 10 12:44 AM

[vassar:]

I'll take a Netbook over the Kindle any day. Why pay to read RSS feeds, newspapers, etc when you can do it for free.

Actually, I have a MacBook Air (only $999 in the Apple Refurb store) that works great for pdfs, RSS, web browsing, eBooks. Plus, I have WiFi connectivity (available almost everywhere) and G3 (ATT) tethering with my cell phone.

Feb 10 08:35 AM