QUE Reader from Plastic Logic

[zetareticuli]

Is there a reason the QUE Reader is so expensive? I mean, the features are not really that impressive if you compare them to other e-readers. Am I missing something here or you guys agree?

[SCION]

You're not missing anything. I think they were trying to take advantage (in the negative sense) of the need for larger devices. They claim it's geared for the "business professional", hence the absurd price (in my opinion). Selling for $650 and $800 leaves little doubt that they'll receive few (new) orders. Those who pre-ordered shortly after being able to do so will probably cancel now that the iPad is here and other tablets are on the horizon which will be priced to compete with the iPad. There's still curiosity about the Skiff as well.

[cartesius]

Originally Posted by zetareticuli

Is there a reason the QUE Reader is so expensive? I mean, the features are not really that impressive if you compare them to other e-readers. Am I missing something here or you guys agree?

I've been following the Que for months now, but I wasn't able to find any reason for all that hype around it - or that price. On their website there's a lot of flashy-sparky words but little in terms of how it actually works, what formats does it support natively (MS Office is needed to view MSO documents: why??), battery life, etc.

c.

[Dulin's Books]

plastic transistors. only ones in the entire electronics industry.

plastic backplane. very very durable.

giant faciltiy in Dresden Germany to produce the electronics and display.

its REALLY REALLY THIN-

someone has to pay for that

It allows for securing the device and documents on the device which is very necessary for the crowd its aimed at. Syncs with your email and calendar. Supports any document you can "print" to it and also ePub and PDF. Allows for notes made on the documents to be sent of the device with the documents.

It does what it sets out to do- be a paperless briefcase- better than anything else remotely like it.

i'm a bit annoyed at the pricing structure and no SD. I'd prefer a slightly lower price over all and an sd slot. They should do a 2g with wifi and SD for like $500 and they would sell a boat load of that sku. then they could offer the 4gb with or without 3g for less then the top tier price and skip the 8gb one. They should also offer either the folio or had case with the purchase- especially for early adopters.

but over all i've got to say that i'm more annoyed at the glossy bezel then the price. Its made to be held and they used a surface that shows every finger print. They're answer is to include a polishing cloth... too much trust in the fancy design company they hired. I'll need the fancy hard case just to hide the gloss bezel.

[zetareticuli]

The technology is cool, I agree, and the price could probably be justified by the nifty tech. However, as far as functionality and features, I don't think the price is justified. There are other devices that offer much more for less money. Don't get me wrong, the plastic transistors, the ultra durable and thin screen, thin design, etc, etc are super cool features and "nice to have's" but it is still overpriced for what it is. I would very surprised if these devices sell well in the current price range.

[Estuche]

I am not a big fan of Steve Jobs, but he definitely "nailed" it with the iPad's price. He was able to put all those abusive e-reader manufacturers against the wall. If Jobs is able to make +200% profit on the iPad at a $499 price point (manufacturing cost = $229) I don't want to think about how much was Plastic Logic dreaming of pocketing with their outrageous prices at the expense of customers

[SCION]

Originally Posted by Estuche

I am not a big fan of Steve Jobs, but he definitely "nailed" it with the iPad's price. He was able to put all those abusive e-reader manufacturers against the wall. If Jobs is able to make +200% profit on the iPad at a $499 price point (manufacturing cost = $229) I don't want to think about how much was Plastic Logic dreaming of pocketing with their outrageous prices at the expense of customers

Well stated.

[mgmueller]

Originally Posted by zetareticuli

Is there a reason the QUE Reader is so expensive? I mean, the features are not really that impressive if you compare them to other e-readers. Am I missing something here or you guys agree?

It's about the same price range as iRex 1000S with comparable (in some areas obviously advanced) features.
It's about 1/3 more expensive than Kindle DX with a truckload of additional features.
In comparison to the market, I guess their price makes sense.

[mgmueller]

Originally Posted by Estuche

I am not a big fan of Steve Jobs, but he definitely "nailed" it with the iPad's price. He was able to put all those abusive e-reader manufacturers against the wall. If Jobs is able to make +200% profit on the iPad at a $499 price point (manufacturing cost = $229) I don't want to think about how much was Plastic Logic dreaming of pocketing with their outrageous prices at the expense of customers

[%] is margin, not profit.
Per definition, it's calculated top down (based on revenue), not bottom up (based on costs). > 100% per definition is not possible (although Bill Gates or Steve Jobs may be close enough.)
Assuming (no idea, whether that's valid) the $ 499 to $ 229 ratio is correct, this means a Gross Margin of 54,1%.
You have to differentiate: Gross Profit does not mean Profit. We're not talking EBIT (profit before tax) here.
On average, general costs (sales, administration, ...) of large corporates like Apple will be in the range of 20% to 30%.
This leaves about 30%.
Usually, the R&D budget will be about 5% of total revenue. For innovation driven companies like Apple probably slightly more.
This leaves about 23%.
That's before tax!
Over all, a seemingly huge Gross Margin of 54,1% eventually will generate a "real" Margin of maybe 5%.
Meaning: Lots of hardware manufacturers need Gross Margins in the range of 50% to 60%, to actually survive.
Of course, you don't have to worry about Steve Jobs.
(He always has got his Dreamworks-billions).
Real genius in Apples' business model is the link to iTunes.
And that's why they can give such a price. And that's why others can't do it.
And in the example of Que, the picture is even more extreme: It's a startup. Meaning, they have enormous costs (R&D, marketing, sales, ...), but seriously lack any "cashcow" in parallel. So they have to re-finance. Probably another 10+%...
And they have to generate profit quickly to bare the refinance rates. Apple easily could sponsor any new business for years (like Microsoft did with X-Box for years).
And: I don't think, Apple's iPad can meet the specifications of Que. Neither in display size, contrast, battery duration, ....
(Anyway, I'll buy them both.)

[mgmueller]

Originally Posted by SCION

Well stated.

I'm pretty sure, they won't earn a single cent in year 1.

[SCION]

Originally Posted by mgmueller

I'm pretty sure, they won't earn a single cent in year 1.

Year 2 will probably be just as challenging with the proliferation of "perceived" comparable devices at a lower price.

[SCION]

Originally Posted by mgmueller

In comparison to the market, I guess their price makes sense.

But does it make sense to the consumer who'll probably be sticker shocked, just as the original poster was?

[mgmueller]

Originally Posted by SCION

Year 2 will probably be just as challenging with the proliferation of "perceived" comparable devices at a lower price.

I guess they have a valid business model and a realistic perspective of the market.
But as a startup without (obvious) additional business, their finance model usually will be for 8 years. This means about break-even in year 3.

I've slightly lost track of the market. But so far, only Skiff comes to mind as a comparable device. Maybe to some extent iRex 1000S, although probably already a bit "outdated".

[mgmueller]

Originally Posted by zetareticuli

The technology is cool, I agree, and the price could probably be justified by the nifty tech. However, as far as functionality and features, I don't think the price is justified. There are other devices that offer much more for less money. Don't get me wrong, the plastic transistors, the ultra durable and thin screen, thin design, etc, etc are super cool features and "nice to have's" but it is still overpriced for what it is. I would very surprised if these devices sell well in the current price range.

Which unit is offering more or even the same for similar display size?

[mgmueller]

Originally Posted by SCION

But does it make sense to the consumer who'll probably be sticker shocked, just as the original poster was?

Question is: Who's their (potential) consumer?
Unfortunately, we don't see any real figures. We more or less have to speculate about hardware sales and content revenue.
As a comparison, we often hear about 500k Kindles per year.
If that's true (and given the surprisingly low figures of content revenue Analysts gave a few weeks ago [about $ 100m for Amazon year-to-date October 2009] this seems about right), we can assume that smaller ones like BeBook, Cybook, iRex, ... will be way lower.
Maybe 100k units per year globally?
Maybe even less?
So we're obviously not talking about the average book reader, but a very small niche of enthusiasts.
And for those enthusiasts, costs may not be that important.
Just an example: I've been a Commodore-fan til the last second. So I've bought my very first PC only in 1995. It was $ 4.000 then. I certainly wouldn't be willing to pay even half of it today. But back then, as an early adopter (very first Pentium 100), I didn't hesitate.
I assume, they've done their market research.
And as they've got their plant in Germany, I guess they've got financial support from Germany and the EU. And they definitely insist on a valid business plan.