Will the Amazon Kindle cost US$50?

[jashsu]

Originally Posted by bowerbird

that's why we need to stop all this
ridiculous twitter on $50 machines.

If there's any chance that the machine can read non-drm material (and i'd be pretty surprised if there weren't), then there's reason to hope for a $50 device.

[rlauzon]

Originally Posted by jashsu

If there's any chance that the machine can read non-drm material (and i'd be pretty surprised if there weren't), then there's reason to hope for a $50 device.

The issue that I see is that there is no way for the device to be $50 and be able to read non-DRM material.

They simply cannot produce a usable device for $50 (today, at least) and break even. They have to sell it at a loss. Which means that they have to make up for that loss somewhere.

The obvious place is in the eBooks. If the device can read other formats, then there is little incentive to buy eBooks specifically for the device. Also, DRMed formats have very low value to the reader (remember, you never BUY an eBook with DRM - you LEASE it), so it would take alot of eBooks - or they will have to overprice the eBooks - to make up for the loss.

Not a good business model.

I agree with the previous poster: the reader should not be sold at a loss. At cost, maybe, but not a loss.
Then sell the eBooks at a reasonable price.

[nekokami]

Generally good points, but they don't take into account the overhead of handling paper books: storage, order assembly, shipping, etc. For a local bookseller, the savings would be good, but for Amazon the savings would be astronomical. The infrastructure to sell the eBooks is already in place, an investment since payed off by their pBooks business. Amazon stands to benefit hugely if they can get even a substantial fraction of their customer base onto eBooks.

I wouldn't expect Amazon to sell a reader for $50, but I could see them taking something of a loss per unit initially, or offering a substantial coupon in the at-cost price of the unit toward books/music, just to get the market primed. This would be a "limited time" kind of deal, like the free Amazon Prime trial they offered last year. But they've got to get the volume of ereader sales up to get the unit cost down and to realize those savings in book order fulfillment, and they need to build a critical mass of customers in the eBook arena if they want to be able to leverage publishers to put more of their inventory into digital format.

I don't think a reader will sell for anything close to cost unless it can accept non-DRM books/user content, but I would not be surprised if the only DRM supported on an Amazon reader is Mobi, and other formats may need to be converted to Mobi unsecured to work. (I personally would not buy it unless it can support PDF, even though I think PDF is far from ideal as an eBook format -- I have too many academic papers in PDF format that I'd want to be able to read. But not everyone is an academic.)

[yvanleterrible]

Amazon occupies the historical feat of being the first commercial internet book reseller. I'm not too sure if they are still the biggest but my point is this. Being internet only it would be a matter of pride to sell e-books and being the biggest at it. A loss leader like the Kindle is the perfect stepping stone to achieve this.
As a reminder of this marketing concept here is a definition.
http://en.wikipedia.org/wiki/Loss_leader
My previous comment was a joke.

[jashsu]

Originally Posted by rlauzon

The issue that I see is that there is no way for the device to be $50 and be able to read non-DRM material.

I can see your point here, but I contend that it would be very difficult to market a media player device at any price if it cannot play back the user's content. I don't think any digital audio player has been released that could not play mp3 or a proprietary format that the user could create from his existing mp3s.

So that leaves a motivation for Amazon to price it at $50. My initial inclination is that the actual pricing will be something like $200 with a $150 ebook credit.

[NatCh]

Originally Posted by nekokami

I don't think a reader will sell for anything close to cost unless it can accept non-DRM books/user content, but I would not be surprised if the only DRM supported on an Amazon reader is Mobi, and other formats may need to be converted to Mobi unsecured to work. (I personally would not buy it unless it can support PDF, even though I think PDF is far from ideal as an eBook format -- I have too many academic papers in PDF format that I'd want to be able to read. But not everyone is an academic.)

The manual we lifted from the FCC site (before it was pulled -- and can now be found here) listed a number of formats.

Assuming it's still accurate (from page 43):

Formats natively supported are: .AZW, .PRC, .MOBI, .MP3, .AA, and .TXT.

So no RTF, no HTML and no PDF. Presumably there will be some sort of conversion software for 'personal files.'

Since it has the same 6" screen that the Reader has, I wouldn't expect A4 PDFs to be any more pleasent on it than they are on the Sony Reader anyway.

My wife, who is also an academic (her collegues love it when I say I'm getting a 'Marital B.S. in English Literature' -- I'm planning to print my own diploma! ), says to let her know when there's an A4 e-ink device that supports markups. She likes the idea of getting papers turned in electronically, then reading, marking up, and sending them back the same way. With the bonus that she keeps a copy of the paper and her comments.

I think they'd sell extremely well, so I plug the idea whenever I can.

[rlauzon]

Originally Posted by NatCh

The manual we lifted from the FCC site (before it was pulled -- and can now be found listed a number of formats.
Formats natively supported are: .AZW, .PRC, .MOBI, .MP3, .AA, and .TXT.

Never heard of .AZW (and can't Google anything on it either).

PRC is not a file format. It's a Palm Resource. So it depends on what's in it. Although Mobipocket content is usually mis-named with a .prc file extention (instead of .pdb which is what it should be).

So, it looks like the Kindle will be no better than a Palm/WinCE with an eInk screen (as far as content goes).

That being the case, why buy the Kindle over a PDA?

[NatCh]

I'm guessing that .AZW is a proprietary AmaZon(something that starts with "W") format. It seems to me that I did locate an AZW extension for something, but it was totally unrelated (like medical engineering or drafting or something -- sorry, really don't remember )

I think that Palm executables usually have a .PRC extension, is that what you mean by "Palm Resource?"

The list is a bit short, but not really shorter than the Sony (please don't let me start you on a rant on that, rlauzon )

[Liviu_5]

Originally Posted by rlauzon

That being the case, why buy the Kindle over a PDA?

Why buy a Sony Reader then? What does it bring as extra content capabilities since on the Kindle you will get drm prc and those are far more around than drm BBeB, while pdf on Sony Reader as everyone mentions is no better than pdf on pda.
Everything will depend on unknown as of now details. Price, capabilities..., so until we have official word everything is speculation. Personally I think that a "cell phone" like model, cheap device plus 1-2 year subscription plus personal content, makes sense and Amazon is in a good position to try it. But again, that's just my opinion...

Liviu

[NatCh]

Just a side note: we don't know that Kindle will support DRM'd PRC files, only that they planned for it to support PRC files. Unless you found a statement to that effect in the manual (I haven't looked), I wouldn't assume that it supports any DRM except perhaps .MOBI As you say, Liviue_5, there are a lot of unknowns here.

[bowerbird]

jashsu said:
> So that leaves a motivation for Amazon to price it at $50.

"motivation"? what does that have to do with the price of tea in china?

sure they have "motivation" to sell a $50 machine, but if no one can
_build_ a machine at that price, what good does that "motivation" do?

***

on the question of mounting your own content, _no_company_
will ever sell a machine on which you can't load your own stuff.
since no one would even take a second look at such a machine.

since the first e-book-machine -- the rocketbook -- was released,
the #1 f.a.q. has been "can i put my own content on this machine?"
if it's not possible, at all, you're not gonna make very many sales.

however, i could see a company attempting to _charge_extra_
for the "privilege" of loading your own content. of course, they
wouldn't be so stupid as to piss us off by phrasing it that way.
instead they'd offer a "steep discount" for a hobbled machine that
only accepted their own content (overpriced, to offset the subsidy).

and for _some_ people, that particular tradeoff might be worth it.
(specifically, people who had no desire to load their own content,
and only wanted to buy the bare minimum from that company.)

whether it would be _enough_ people to make it worthwhile for
the company, i'd have _serious_ doubts. but who really knows?

after all, this _is_ the model that the game consoles are using, and
they seem to be making lots of money. except for the wii machine,
the other big ones (sony's ps3 and microsoft's xbox) are _heavily_
subsidized. the ps3, which sells for $500, actually costs over $800.
sony expects to make the money back when customers buy games.

and microsoft has lost billions (literally) on its xbox over the years
-- hardware-wise -- although, if i remember correctly, they have
finally turned the corner on profitability by selling enough games.

and here's where we get to the crux of the matter.

sony and microsoft are the only parties that can sell the games that
play on their systems. that is, they have a monopoly on the content.
so they can charge (or overcharge) whatever they want for the games.
sure, nobody has to buy a game. but what good is the console then?

that monopoly is the reason they can overcharge for the games,
and that allows them to use the games to subsidize the consoles.

but that approach will not work for e-book-machines, because
the makers of the e-book-machines have no content monopoly.

even if you could force all the publishers to go through you
-- even if you gave them a big enough share of the money
that they were _completely_ecstatic_ to work through you --
the end-users would _still_ want to load their own content...

some of them might _never_ buy one thing from you. _ever_.

so you'd have to require them to make at least some purchases
from you, enough to make up for the discount on the hardware.

***

there's another set of important variables running around here,
but this post is long enough, so i'll save them for the next one...

-bowerbird

[rlauzon]

Originally Posted by NatCh

I think that Palm executables usually have a .PRC extension, is that what you mean by "Palm Resource?"

By convention, yes. .prc files are usually programs and .pdb files are usually data files.

But for the Palm, .prc and .pdb extensions are for show. The files themselves contain information telling the Palm what they are.

It's just a bit of a peeve for me. pdb is NOT an eBook format. It's a Palm Database. The data in it may be anything, not just an eBook.

Originally Posted by NatCh

The list is a bit short, but not really shorter than the Sony (please don't let me start you on a rant on that, rlauzon )

Well, it's shorter than most. At least the Sony supports PDF. And I thought it supported HTML as well.

A short list isn't bad, if many of the items on that list are standard formats.

The Kindle seems to support formatting only for its proprietary Mobipocket format. The only open format that I can see is text.

[rlauzon]

Originally Posted by Liviu_5

What does it bring as extra content capabilities since on the Kindle you will get drm prc

1. PRC is not an eBook format. It's a Palm Resource file (and it's probably mis-named since it should be a .pdb).
2. DRM has no value to the consumer. DRM makes content worth less to the consumer. So saying that a device supports DRM is certainly NOT a selling point.

So, why buy a Kindle if you already have a PDA?
Even if you don't have a PDA, why would a Kindle be more vaulable?

[Liviu_5]

Originally Posted by bowerbird

but that approach will not work for e-book-machines, because
the makers of the e-book-machines have no content monopoly.
-bowerbird

That's definitely true and the reason the Librie/Gemstar failed and Sony Reader or Ebk1150 as their reincarnations with personal content allowed are selling ok. However, Amazon as opposed to Sony/ETI is a big book seller, the biggest online and has probably 5-10% of the total book market here in the US. Also they own Mobi.

These 2 factors may allow them to offer a cheap ereader with some subscription included. The big issue that I think will determine whether they do it or not, is how will publishers react to this since one thing Amazon is not going to do is sour their relationship with them. Amazon Upgrade has been a dud until now beacuse of publishers, so Kindle may not appear soon, but again who knows.

So let's wait and see...

Liviu

[NatCh]

Originally Posted by rlauzon

But for the Palm, .prc and .pdb extensions are for show.

Ah, just a convenience for the wetware to understand it more easily, then. I hadn't looked at the Palm files enough to figure that out, but then I haven't really needed to either.

Originally Posted by rlauzon

At least the Sony supports PDF. And I thought it supported HTML as well.

Not natively, it doesn't, but it's not that hard to convert to RTF -- if you don't have a lot to convert, of course.