Sony PRS-700 Reader launch in New York City

[pilotbob]

Originally Posted by bbusybookworm

I wonder if Sony could develop a Point of Sale system which would allow people to buy and load ebooks in the store itself.

A system like this would probably be easier with Mobi or Ereader where you don't need to authorise the machine to load book's onto a device, but surely Sony could make a special version of Library, etc to allow stores to do so. Maybe tie it to a smart card or something so customers could easily buy books from different locations without having to enter detaile in each place again and again.

Yes, this would be great. The store could be like a video store. Where just the covers are on the shelf. Maybe there could be a cover and summary and a couple of chapters done in a durable plastic. You could browse the books and then take it to the kiosk to buy.

I don't think any smart card would be required at all. The reader itself would be the smart card. Since the reader is registered to your account... as soon as you connect it to the kiosk it could identify the reader and what account it went to. You could swipe your credit card and swipe the "books" from shelf that you want to buy. It would add the ebook to your account and transfer it to your reader.

If it was a new or unregistered account it would prompt you from a username/password to create your account. I don't think the kiosk should allow you to register to an existing account, probably woudn't be needed.

The above would also solve the problem of a Sony reader user to need a Windows PC. A Mac or Linux or non-PC-at-all person could just go to the store to buy/load more books.

BOb

[pilotbob]

Originally Posted by axel77

Sorry but why does the size of a company have to do anything with profitably requires? If you can estimate an investment of X to have say 20% profit on investment return, its good, big company or startup company.

Perhaps he meant to say because they are a public corporation.

BOb

[DMcCunney]

Originally Posted by axel77

As said, the first conlcusion is correct, the second is IMHO not.

Of course every company wants to make as much profit as possible. Its just not correct that the larger the company is, the more profit it must do per dollar invested.

I didn't say that. The return must be proportional to the investment, and a bigger company makes bigger investments. They have to, to make it worth doing in the first place. And the question senior management will make will be "What is the best place to invest these funds that will produce the highest return?"

As an example, I was involved in a discussion elsewhere on taxicabs, and the desirability of a model designed to be a cab for major metropolitan areas like NYC. In NYC, "livery" cabs require licenses from the city Taxi and Limousine Commission. To operate a taxi, you must have a medallion. Medallions are in limited quantities. New ones are occasionally auctioned by the city, and the going price the last I heard was about $75,000. At any one time, there are about 12,000 livery cabs on the street in NYC.

Another participant in the discussion is an engineer at GM. He managed to avoid rolling on the floor laughing at the idea that GM could produce a vehicle for a market of about 15,000, but it wasn't easy. They can't. They'd need a market about 30 times that large to even think about it. They are simply too big, with too much overhead, to produce that few of a model profitably.

So it is in a different sense for Sony and the Reader. Someone like Bookeen might survive comfortably on sales that would not be sufficient for Sony. Sony makes devices, and must make a lot of them. Aside from the investment in manufacturing to make the actual readers, they also had to create content to offer for the reader and an infrastructure to sell it, as well as substantial marketing expenses to let everyone know about it.

And the size of that investment will impose corresponding requirements for profitability. Again, senior management will ask "Can we make a better return investing these funds elsewhere?", and if they think they can, they may just pull the plug on the existing operation.

thanks for explaining me financing 101, we'll I actually did that much financing already. What you descrive is total return on investment. Yes ROI will increase the larger the production is. "economies of scale". However I still disagree that larger companies have a larger ROI than smaller. This is just not true.

I didn't say that. I said they had a higher cost of entry and proportional return requirements. Big companies cannot profitably undertake small jobs. There have been an assortment of instances where a larger company has spun off a new operation as a separate company, for precisely that reason. As a new operation, the start up may not be able to bear the burden imposed by being a part of the parent. Split off as a legally and financially separate organization, the numbers change.

As long any investment (including management expenses) has a larger ROI than the market interest loan any company will want to do that, big or small. Since it can get the investment needed from the finance market.

It can? Looked at the credit markets lately?
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Dennis

[DMcCunney]

Originally Posted by pilotbob

Perhaps he meant to say because they are a public corporation.

I did, but it would be true if they were privately held, too.

The bigger you are, the bigger the operation must be to be worth doing. Sony is a big company.
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Dennis

[pilotbob]

Originally Posted by DMcCunney

I did, but it would be true if they were privately held, too.

No, I meant the part about a "fiduciary responsibility"... that is due to the SEC and being a "public" company... not due to being a "big" company.

BOb

[DMcCunney]

Originally Posted by pilotbob

No, I meant the part about a "fiduciary responsibility"... that is due to the SEC and being a "public" company... not due to being a "big" company.

Not just due to the SEC, though publicly held status imposes certain legal reporting requirements.

Even privately held companies have investors, who expect to make money, and will have hard questions for the CEO and his team if they don't think their funds have been invested as well as they could have been.

That dirty laundry simply isn't aired in public.
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Dennis

[igorsk]

Dennis, was there any word on dictionaries? Yes, no, maybe, no comment? If no one asked, can you ask in your private emails?

[DMcCunney]

Originally Posted by igorsk

Dennis, was there any word on dictionaries? Yes, no, maybe, no comment? If no one asked, can you ask in your private emails?

I mentioned the idea to the demonstrator whose device I used, and she agreed that was a feature, but I don't consider that confirmation of dictionary lookup functions, or the availability of dictionaries to do it with.

My guess is that the touch screen and highlighting capabilities make it possible. Whether or not the software will be there to to let the user do it (like, dictionaries that will work with it) when the device goes into wide availability is another matter.

It will indeed be a followup question.
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Dennis

[igorsk]

Thanks!

...BTW, is it November yet?

[vivaldirules]

Very nice post, Dennis. I appreciate your efforts. And I'm very relieved to hear that Sony will have 100,000 titles this year. That's a nice start to catching up. Pretty aggressive, I'd say.

I find it a bit amusing that of the 180 or so posts yesterday after the 6 pm event started, there was not one word about new titles that I saw - only news of the new hardware. Anyway, I'm a lot happier now than then. Thanks again.

[DMcCunney]

Originally Posted by vivaldirules

Very nice post, Dennis. I appreciate your efforts. And I'm very relieved to hear that Sony will have 100,000 titles this year. That's a nice start to catching up. Pretty aggressive, I'd say.

That was my thought. The whole event showed evidence that they were committed to the market, knew they were behind in areas like availability of content, and were pushing hard to catch up.

I don't consider simple number of titles available on Amazon for the Kindle vs Sony store for the Reader terribly meaningful. The question is "Is the book I want available for my reader?" Amazon may have for more content, but how much if it is something and significant number of readers will want?

I find it a bit amusing that of the 180 or so posts yesterday after the 6 pm event started, there was not one word about new titles that I saw - only news of the new hardware. Anyway, I'm a lot happier now than then.

I confess, beyond a quick scan to see what Nate talked about so I wasn't repeating what he'd already covered, I haven't tried to plow through the thread. I was less interested in the hardware than in Sony's commitment to the business, means of nurturing and growing it, and future directions in which they might move.

Sony makes gadgets. In this case, they make a gadget that displays ebooks. For that gadget to sell, there must be ebooks it can display. I think there were missteps in the original effort, but that Sony recognizes that and is moving to correct them. Making a whole separate division for the reader, and moving the division to the US is one sign of a firm commitment. The big push to double the available content is another. I don't know if they'll be able to meet that aggressive timetable, but the fact that they are trying to is significant.

Thanks again.

You're welcome. It was my pleasure. As mentioned, I made several contact at the event, and hope to learn more down the road.
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Dennis

[NatCh]

Did anyone else notice this little bombshell?

Originally Posted by DMcCunney

Steve and Sriram told me that PVI is no longer the sole source for eInk displays. Other manufacturers, like LG, have licensed the technology and are gearing up to produce displays. Steve said "I have a lot of worries, but supply of eInk displays isn't one of them!" Sriram mentioned a manufacturer who had bought the production facilities of another which had gone Chapter 11, and confirmed that plenty of production capacity existed. I'll be contacting him shortly to get more information on E Ink's partners and future plans.

This is a huge deal!

Thanks for covering this for us, DMcCunney, you did a fantastic job of it!

[DMcCunney]

Originally Posted by NatCh

Did anyone else notice this little bombshell?

This is a huge deal!

I thought so too.

I'm an old computer geek, and the watchword in the industry was to always have a second source. If you are dependant upon a component only made by one supplier, what do you do if their factory burns down? I recall the furor some years back when Intel released the first 386 chip. Before that, Intel had licensed manufacturing rights to other suppliers, so they weren't the sole source of CPU chips, and system builders didn't have to worry about getting enough chips to build the machines they needed to meet demand.

With the 386, Intel decided to sole-source, and did not license manufacturing rights to other vendors. There was a lot of angst in the industry about it, but it faded as Intel proved it had the capacity to meet the demand.

eInk based readers were in a similar position, only the critical part was the screens. That was what prompted my question to Steve about supply chain constraints. At the time, I thought PVI was the sole source. With Amazon, Sony, Bookeen, iRex, Jinke, and others all getting into the eInk device market, would supplies of screens be adequate?

Since PVI is no longer the only supplier, the answer is yes.

I'll be following up with Sriram to try to get more information on who else has licensed eInk, and what they plan for the future.

Thanks for covering this for us, DMcCunney, you did a fantastic job of it!

It was my pleasure. I'll happily do it again, but hopefully with more warning, and time to line up ducks. There were questions that occurred to me after I left that I just didn't think of at the time. Fortunately, I have contact info, and should be able to ask more after the fact.
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Dennis

[nekokami]

Add my thanks, Dennis, for your willingness to pinch-hit so quickly on this one. Nice write-up, too, with some tasty tidbits not found in other coverage! I'm also quite interested in Sony's plans to expand their offerings, even though I don't have a Sony model. Competition is good for business. Same for their plans to improve their store interface, of course.

Regarding the size-of-business issue, big companies are inherently less efficient than small companies with regard to management structure, but usually expect larger margins per sale, partially because their management structures only come in size XXXL. I think both of these factors contribute to their need for much larger volumes than smaller companies.

[Alexander Turcic]

Thank you, Dennis!! Reading your report makes me feel almost as if I have been there myself.