Ten Reasons Why the Kindle Is Toast 16 comments
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It’s became obvious to me at the start of the year that the Kindle was going to fail as a consumer device. The sales had not been bad - encouraging actually, with Amazon (AMZN) running out of stock over the holiday period. That should have been auspicious, but on New Year's Eve I ran into one of the entrepreneurs who founded Lexcycle, the company that introduced Stanza. I reported on our conversation in One Million Users: Is Stanza Killing The Kindle? and later reported on Amazon’s acquisition of Lexcycle. I’ve not changed my mind about the Kindle. Here are 10 reasons why.
- Amazon is Amazon, not Apple (AAPL) or Nintendo (NTDOY.PK). I am impressed by Amazon. You might believe that Jeff Bezos was lucky to be first with the idea of the electronic book store, but I suspect that Amazon would now be dominant even if he’d been second or third with the idea. It’s hard to find fault with his implementation of it and the innovations he introduced. I am impressed that he scooped up the web music CD and video DVD business quickly. I salute the fact that he was ambitious and set up a clicks-and-mortar operation rather than just a web site. He was the first electronic retailer to establish an affiliate program - which pretty much drowned out the competition and his implementation of zShops was a great success. On a completely different business tack, I am deeply impressed with Amazon’s EC2 - its IT Infrastructure as a Service operation, and I expect it to continue to prosper. But none of that makes Amazon a credible device manufacturer. It isn’t one yet and it isn’t going to become one.
- Jeff Bezos Suffers from iPod Envy. Don’t misunderstand me, the Kindle is excellently designed and I have no problem with reading books, even magazines and newspapers, on either of the current Kindles (the DX and the Kindle 2). I am particularly impressed with the attention paid to readability. I’m not alone either. It seems like most people who’ve touched the Kindle are impressed. Nevertheless I can’t help getting the feeling that Jeff Bezos suffers from iPod envy. That would be natural too in any entrepreneur, but it shouldn’t dilute the focus of the organization you run. Apple started with the iPod and built an end-to-end commercial ecosystem that linked the iPod to iTunes. Apple then doubled down and established something even more powerful with the iPhone and the App Store. Jeff Bezos would love to do something similar with the Kindle and, in my opinion, it’s blinding him to the fact that it won’t work. It would be really neat if the Kindle was the iPod of books, but it isn’t. It never will be.
- The Kindle is Functionally Limited. The iPod allowed you to load and listen to the music you had already bought. You could also buy music from Apple, but actually few people bought much. For several years the average iTunes user was buying no more than the equivalent of a single CD a year through iTunes. The digital version of the music were, admittedly, a little cheaper than the CDs, but no-one bought an iPod to save money on buying music. If you wanted to save money on buying music, you stole it. Nobody is going to buy a Kindle to save money on buying books either. Yes, they are a little cheaper via the Kindle, but it’s not a meaningful incentive. The iPod developed into the iPhone and its functionality exploded. The Kindle has no such development path ahead of it. Its functionality is limited and if you increase its functionality it becomes what? A Netbook.
- It’s the Channels, Stupid. To sell the Kindle, you need to get it into people’s hands. When was the last time you walked through Best Buy (BBY) and took a look at the Kindle. How about when you were strolling around Fry’s. Or maybe you saw a stack of them in Borders (BGP) or Barnes & Noble (BKS). No? How could that be? (It was a different story with the iPod.)
- The Kindle is Pricey. Amazon just introduced the Kindle DX, at $489. You can get a Netbook cheaper than that. Unfortunately, Amazon hasn’t got the volumes to bring the prices down quickly, so the DX is going to stay at that kind of price for a while. The Kindle 2 is smaller and cheaper at $359, but I still think the price is too steep. Remember, you’re not getting a netbook here, you’re getting a book reader. It differentiates itself from other computing devices in two ways; it is better designed for reading (no question about that) and there is a whole series of things it cannot do, because it is not a laptop. Once you’ve bought the Kindle you have to start buying books to put on it.
- The Kindle: A Device Too Far. The Kindle is yet another electronic device to carry around, which might get stolen, and which will inevitably run out of juice at an inconvenient moment. Amazon is betting that because some people are happy to carry a book with them they’ll be just as happy to carry a Kindle. Some may, but not many methinks. A book is cheap, but a Kindle is not, a book is self managing, but a Kindle is not. It’s a burden. It’s a device too far.
- The Kindle has a Weak Commercial Ecosystem. Just go round an Apple store and take a look at all the add-on devices that you can buy for the iPod or iPhone - then think of the Apple Apps Store and the thousands of apps you can buy for the device. The commercial ecosystem is huge. Now go round a store that’s selling the Kindle - oops. Sorry, surf the web and you’ll find much less in terms of physical add-ons and nothing in terms of software - because the Kindle is a closed environment. Even if you think in terms of magazines, newspapers, etc. Amazon has not yet delivered a compelling set of magazine subscriptions to buy into - and, by the way, the Kindle is black and white only. Most magazines wont want to have the color sucked out of them.
- The Kindle should be an Application not a Device. Kindle functionality is entirely doable in software, it was done in software, and when it was done in software (by Lexcycle) it acquired more users in the space of about 4 months than the Kindle had - and that was on the iPhone which doesn’t have an ideal reading screen. Portable video devices were sold for a while but were eclipsed by Microsoft (MSFT) and Apple providing the same functionality in software. And by the way, a soft Kindle would be able to do color - after all, it’s little more than a PDF reader and there are lots of such readers. Ultimately that’s what the Kindle is a hardware PDF reader that doesn’t do color.
- Amazon Cannot Afford The Kindle. The Kindle is not friendly to the rest of the Amazon electronic book business model. The more that Amazon tries to differentiate its Kindle from software equivalents, the more it will have to embed functionality in the hardware - because software differentiation can easily be mimicked. However, the hardware is a constraint. Software competitors will naturally innovate to provide what the Kindle device cannot provide (color is just the obvious example.) This in turn will naturally generate competitive formats, which will in turn loosen Amazon’s grip on the electronic book business. The Kindle dislocates Amazon’s electronic book business.
- The Kindle: A Bug Waiting To Be Squashed. Apple is rumored to be about to launch a tablet PC with 10 inch screen which will be priced somewhere between the iPhone and the Apple MacBook. It feels like a Kindle killer to me. But even if Apple doesn’t step in with such a device, the Netbook market will generate one. Ultimately, the Kindle is a goofy Netbook with limited functionality. It will be made obsolescent by millions of not so goofy Netbook or tablet devices.
Disclosure: No positions
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This article has 16 comments:
$489 for the DX is not cheap but it could be worth it for heavy readers and particularly those who read through lots of printed documents.
POINT BEHIND IT. THEY ARE TRYING TO REPLACE PAPER, NOT LCD SCREENS. GET IT. IF YOU WANT TO RANT ABOUT IT, AT LEAST COMPARE APPLES TO APPLES.
I argued that in order to be a transformative success, the Kindle had to have mass appeal or it wouldn't get enough traction to break out of its niche as a mere supplement to physical books. That's because unless e-books achieve massive enough sales to supplant physical books, publishers won't drop the price of e-books in half, which is what's needed to get the e-book revolution out of first gear and establish them as the new standard.
OTOH, the Kindle won't be a failure if it (unfortunately) sticks to its niche. I dare the author to revisit this topic a year from now and check his assertion that the Kindle is "toast." I predict it'll be selling far better than it is now and making promising inroads in academia and periodical publishing. It'll eventually make a billion or two for Amazon, and hang around forever. But, alas, I fear that's all it'll do. It won't put e-books "over the top."
A phone goes in a pocket, a laptop on a desk and a Kindle on the night stand. I don't want another device that tries to do all things with a small screen no matter what the resolution is.
The author is typical of someone that thinks more complicated is better and more functions is an enhancement. Not always true.
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...and as I recall all the same arguments were used PREVIOUSLY with the introduction of the original Kindle...yet that has device has FAR EXCEEDED expectations -- and Amazon hasn't even begun marketing it outside the U.S.!...and I fail to understand WHY the author persists in bashing Kindle?...it almost sounds like he suffers from "Kindle envy"...does it hurt his feelings that Amazon has taken something that he has a low opinion of and made it extremely successful?...I would suggest the author give Amazon a year or two and let's see how the larger Kindle progresses...I'm quite confident Amazon will confirm the opinion I expressed in my first sentence.
"Even great books can be overlooked. Amazon customers raved over “Legacy,” a self-published novel by 16-year-old Cayla Kluver, with customer review titles such as “loved it, loved it,” “rich lyrical tapestry and story” and “breathtaking in scope and execution!” Despite winning several prizes from literary groups and accolades like this from readers, Kluver’s debut novel achieved only modest sales. Amazon.com, Inc. (NASDAQ: AMZN - News) today announced a new program, “AmazonEncore,” to help readers discover exceptional books from emerging authors, such as the program’s first book, “Legacy.”"
...this likely would not have happened were it not the low overhead associated with offering it via a Kindle!...and guess what!...it means MORE CUSTOMERS!...how about that!...isn't that great, Robin?!...the quote came from:
finance.yahoo.com/news...
the Kindle does have appeal for some people, especially those without computers, who just want a 'one-trick pony'. but what Apple does best is innovate...and i'm sure they have something in the pipeline that will be even better and i'm guessing they'll come out with something a little bigger than the iTouch...so magazine and newspaper reading will be easier.
On May 13 09:04 AM doyle wrote:
> The author has missed the point.....nobody wants to read a book on
> their computer.....people carry books.......reading a book is a very
> private matter, it does not warrant interruption from an email pop-up
> notification or a bl**dy tweet.....the Kindle is a killer device......now,
> should it be sold in hardware stores, absolutely.....thats where
> Amazon have made their mistake....but its easily rectified and i
> dare say there is nothing in this column that they have not already
> thought about and actioned.
The best application of the Kindle that I have yet heard, is to offer it in lieu of traditional college text books, which are constantly being updated, revised, etc.
But then again, these are often color publications, large format, and the books are used and abused... not a very good overlap of functions. Hmmm.
The future of the Kindle is up for grabs. I personally have never even seen one- channels? But if they've solved the readability issue, that's a big step forward for ebooks.
Interesting point on the growth of the iPod dependent on the pirating of music rather than the purchase. Wonder how protected the Kindle material is? I was surprised that there is no Wifi capability; it's all done via cell phone which is included in the book price.
Reading on the iPhone? Nice novelty, nice for a few minutes, but there is a reason you see many real books printed in that size--too many page turns. Besides, I can barely get through the day with having to recharge my iPhone there is no way I could read a book on it for hours.
I do not see the general public going out to buy a $400 piece of equipment to read a $5 book---do the math---it is an economic waste of money for most people.
I do however think the Kindle could explode in the High School and College arena--think about how much text books cost, and they change seemingly every other year (can you say--waste of paper). Buy the kindle and then reduce the wasteful spending on printing, paper, and maybe even cost of text books overall.