Will the Amazon Kindle cost US$50?

[NatCh]

Originally Posted by Alexander Turcic

Quoting Nick Hampshire of Afaics....

Say, isn't this the same guy who said Sony sold $.5 mil in Readers in the first week?

We couldn't really figure out where he was getting his math then, and this time he says he's reporting rumors .... I'm not sure how much weight we should give what he's saying.

We're pretty sure the displays alone are in the $150~200 range right now, so even if he's in the right solar system on the price, what sort of long-term cost of ownership would Amazon have to bind its customers to in order to stay alive? ~$50 up front and $30 a month for the next 2 years?

I hope that's not what they're thinking, 'cause I don't think it'd go over well with the general public. I don't like th sound of it, anyway.

[Liviu_5]

Originally Posted by nojetlag

Amazon should rather focus on pushing the ebook price to 25% of the paperbook price, the rest will happen automatically.

Unfortunately unless they start their own serious publishing business (not a halfbaked attempt like Amazon shorts) and then damage their relation with the big publishers, it ain't going to happen how much I would like that.

I have my profound doubts on the possibility of a subsidized cheap ebook reader since that model does not work with content as conclusively proved before (gemstar, librie....any device that allows only proprietary content will either get hacked or die).

On the other hand pushing a cheap but breakeven or slightly profitable hardware which allows nonproprietary content may be doable by Amazon to build business as they do with many other programs of that type. I have no idea how much it would cost, but I see a 100-150$ range possible.

Liviu

[bowerbird]

if you have no idea how much the "subsidy" will be
-- or, just as importantly, the exact form it takes --
isn't it simply irresponsible to repeat this "rumor"?

like david rothman, nick hampshire has made "predictions"
about the imminent debut of unreasonably cheap machines,
and is now trying to salvage some semblance of sensibility,
but he's just digging himself deeper into his own black hole.

let's be smart enough not to believe this nonsense, ok?

if you want to know what a machine like this _really_ costs,
look at the ones actually for sale -- the sony and the iliad --
both of which are _also_ actively seeking means of subsidy...

then ask yourself -- in a time when $300 laptops are the
loss-leaders of the season -- whether a dedicated device
makes sense. you will come to the position that has been
the only possible answer all along: it makes no sense at all,
except to capitalists who'll lock you to their money machine.

-bowerbird

[NatCh]

Originally Posted by bowerbird

... ask yourself ... whether a dedicated device makes sense. you will come to the position that has been the only possible answer all along: it makes no sense at all....

I beg to (respectfully) differ, bowerbird. I think whether a dedicated device makes sense, depends on the circumstances and sensabilities of the person evaluating said dedicated device. I don't think this question is one that has an absolutely correct answer, there are simply too many variables and circumstances that potentially affect it that just can't be accounted for.

For instance, as of this moment, there are at least 194 MobileReaders to whom it made sense enough.

[Nightwing]

Originally Posted by Jake

Hmm, I think this would be quite "do-able" given some favorable conditions. The proven model has certainly been around a long while (sell 'em the razors and they'll buy the blades etc.) And, the expensive R & D end of things is pretty much done - e-ink is a purchase-able commodity for manufacturers at this point.

Lately I've been musing about why Sony didn't just partner with Amazon in the first place - make Mobi-read a supported platform and voila - instant vast storefront, neat software, software support etc. I'd have loved it (I like the mobi-reader platform anyway) and the book selection would have been amazing.

Will never know the negotiating stuff that goes on behind closed doors of course.
Personally I *really* like the form factor of the Reader vs what is pictured as the Kindle, but being a fickle guy to the core, show me a better product and I'll switch in a heartbeat...

Actually surprise they did not partner with Apple. Jobs had the Sony top person on the stage a year are so ago.

[jashsu]

Originally Posted by bowerbird

whether a dedicated device
makes sense. you will come to the position that has been
the only possible answer all along: it makes no sense at all,

Thank you for showing me the light, bowerbird. Just moments ago I threw away my toothbrush, electric razor and hair dryer. Now can anyone tell me where to buy a razorbrushdryer? Preferably under $20.

[bowerbird]

natchi said:
> For instance, as of this moment, there are at least
> 194 MobileReaders to whom it made sense enough.

i hope 194 customers is enough to make sony happy! ;+)

look, i really believe a $50 machine is a pipedream, and
that continuing to foster this myth is counterproductive.

here's my reasoning...

any dedicated machine will need:
1. a chip, etc.
2. a screen.
3. an operating system, etc.
4. miscellaneous plastic, etc.
5. marketing, shipping, handling.

a multi-purpose machine will need:
1. a chip, etc.
2. a screen.
3. an operating system, etc.
4. miscellaneous plastic, etc.
5. marketing, shipping, handling.

given these two(?) lists, i don't see where
the dedicated machine can squeeze costs.

there might be _tradeoffs_ that can be made.

the most obvious one is battery-life, but
as sony's machine shows, you could also
"opt out" of some capabilities (like search).

another one (which took us by surprise, eh?)
is the speed of screen-refresh on page-turns.

take away enough of these "niceties" and
maybe you could cut the cost enough, but
you've also cut the appeal of the machine.

so i'm not saying that it's _impossible_ that
someone could build a dedicated machine
that _might_ come in at a lower price-point,
and actually make enough sales to register.

but that advantage is likely to be shortlived...
so i don't think you'll _ever_ get critical mass.

it doesn't give me a great deal of joy to say it,
but a dedicated e-book-machine is unlikely
simply because there aren't enough readers
left out in our world to make the thing pay...

so the best hope for e-books is to piggyback
on some other form-factor that _is_ viable...

-bowerbird

[nekokami]

I think it depends on what you consider "dedicated." A reasonable sized device for reading books isn't probably what most people are looking for in a work machine (or a game machine), but might have overlap with the PDA market. I could actually do most of what I need to do with a computer on the iLiad, if the right software were available for it. Very few of my usual computing tasks require a high framerate or fast processor. In most cases I'd happily trade those features for the ability to read the screen outside.

Amazon spends a huge amount on shipping. They know it's one of the things that sometimes drives their business to local retailers -- shipping costs and time. Take a look at the deals they've been offering on shipping all along -- no shipping for a certain order size, flat 2-day shipping fee for a year ("Amazon Prime"), etc. If Amazon can get their huge customer base to switch to a device that is easy to read on and can provide more or less instant gratification to customers with no shipping costs, they'd be fools not to jump at it, and I don't think they are fools. I could easily see the device priced at the same cost as the "Amazon Prime" plan, for marketing reasons-- plus some amount that you get back as a "rebate" coupon for Amazon digital goods. Amazon makes up the cost on those goods. (Which means they probably won't be much cheaper than they are now.) I also think Amazon has the leverage to "encourage" publishers to offer more of their inventory in eBook format, if they can show the market is there.

Would this be the be-all, end-all for eBooks? Probably not. But it could be a big step forward, in terms of popularizing the idea of eBooks. A later generation may be able to make both the books and the readers cheap.

[yvanleterrible]

The latest posts promt me to jump on both sides of the fence at the same time. OUCH!

Do you remember a very very very few years ago when it was told that that $600.00 printer you bought actually costs $35.00 to produce?

Last week I bought a new LI Ion battery for my Xacti at a store near here. It's about the same size as the one pictured in the Kindle manual and cost $43.00.

You can never trust a price unless you see the company's internal numbers, and that can also be fudged.

[RWood]

From what I have heard (here's another story with only a little, if any backing) the e-ink screen alone costs the manufacturers over $25. If we assume a 4:1 markup from materials to sales price for the battery mentioned above, that adds another $4 to the mix. $2 for the case and another $3 for the box, instructions, and inserts. That leaves $16 for electronics, manufacturing, shipping, R&D, and manufacturer's profit if Amazon is to sell them at cost.

As for the dedicated reader aspect, I have a small laptop, I bought a Reader. I have a Palm equiped phone that I have used for reading, I bought a Reader. I voted for the Reader with my wallet.

[radleyp]

I don't think Amazon needs any subsidy at all. Consider cellphones: dealers will give them to you free, provided you sign up for some service contract. Amazon could do exactly the same thing: a free reader with a one-year subscription, say, to their ebook library. The cost of the reader is absorbed into the service contract.

[jashsu]

Originally Posted by bowerbird

look, i really believe a $50 machine is a pipedream, and
that continuing to foster this myth is counterproductive.

here's my reasoning...

any dedicated machine will need:
1. a chip, etc.
2. a screen.
3. an operating system, etc.
4. miscellaneous plastic, etc.
5. marketing, shipping, handling.

a multi-purpose machine will need:
1. a chip, etc.
2. a screen.
3. an operating system, etc.
4. miscellaneous plastic, etc.
5. marketing, shipping, handling.

given these two(?) lists, i don't see where
the dedicated machine can squeeze costs.

The dedicated reader's cpu is probably a Motorola Dragonball or Intel PXA255, clocked between 33-200 Mhz. Its screen is a 6-10" e-ink or greyscale LCD. The operating system is likely a simple proprietary interface or some type of embedded linux. A dedicated reader's chassis is probably much smaller and lighter, maybe at most 10-15 ounces.

The typical notebook computer is using an Intel Pentium M, clocked at 1-2 Ghz. Its screen is between 10-15" color TFT. The operating system is likely Windows XP Home. A notebook computer's chassis can weigh between 4-8 lbs.

Are you honestly saying that you cannot see a massive difference in cost of materials between these two?

When the dedicated e-book reader is priced at $300, its because the company is making a $150 profit selling it. When a notebook computer is priced at $300, its because the retailer is clearing obsolete stock, and its probably being subsidized by an ISP contract.

[Nightwing]

Would be nice....

[kacir]

People are grumbling about the look of the kindle.

as long as:
- it features an e-ink display
- it has less than 100 dolar pricetag
- I can upload my plain text file into it (unlike original Librie)

I do not care how it looks, how much memory it has, what material the body is made of.

If it costs $50 I do not care if the body of the device is made from cardboard and the reader needs an external power (I would connect a holder for a few standard AA accumulators.)

Not so long ago I have been using an "ebook reader" that had 2MB of store memory. I was able to load in 4 average books. I do not need more for READING.
I have been reading books from Cassiopeia A-11 and A22 for years and I have never had the need for
- fancy controls except for a) selecting the book, b) selecting the font, c) page-up + page-down
- dictionary
- text search
- touch screen
- mp3 player

Now I have a 16MB Flash card that can hold staggering number of books (more than 32! ;-) and I am happy.

I think there is big market potential for a "barebone" lowcost ebook reader for bookworms like myself that devour book after book after book after book. There are also quite a few people that buy several Harlequin paperbacks a week. That is some potential.

[NatCh]

Originally Posted by bowerbird

i hope 194 customers is enough to make sony happy! ;+)

I'm sure it's not, but not every Reader owner is a MobileReader, and I was using the MobileReaders who are Reader owners to point out that your conclusion that a dedicated device doesn't "make sense" isn't as clear and inevitable as you were claiming it is.

But you knew that already.

Originally Posted by bowerbird

look, i really believe a $50 machine is a pipedream, and
that continuing to foster this myth is counterproductive.

here's my reasoning...

any dedicated machine will need:
1. a chip, etc.
2. a screen.
3. an operating system, etc.
4. miscellaneous plastic, etc.
5. marketing, shipping, handling.

a multi-purpose machine will need:
1. a chip, etc.
2. a screen.
3. an operating system, etc.
4. miscellaneous plastic, etc.
5. marketing, shipping, handling.

given these two(?) lists, i don't see where
the dedicated machine can squeeze costs.

You're leaving out some reduced cost due to a simpler control set (buttons and such), but that's fairly trivial.

In any case, I agree, I don't see any way they can get the cost down enough to make any money on the hardware in the $50 range.

Originally Posted by RWood

From what I have heard (here's another story with only a little, if any backing) the e-ink screen alone costs the manufacturers over $25.

I've been trying to get a bead on this for some time. The best guess (and it's still a guess) is that the 6" screen is somewhere between $150 and $200. The folks over at the Baen Bar have been trying to design their own e-reader. They couldn't say specifically what costs what (due to an NDA with PrimeView) but they did say that if they bought some of the more common parts themselves and did their own assembly, they could get the cost down to around $300 -- I think that was for a lot of 1000 units. I specifically asked the Sony guys what the cost of the displays was when we were at the Blogger's Day thing -- they wouldn't tell me a number, but did venture the opinion that the ~$350 that iRex was quoting to replace their 10" display was not out of line. Like I said, I don't have hard numbers either, but I've been puzzling over this for some time, and have gathered a few data points.

Originally Posted by radleyp

I don't think Amazon needs any subsidy at all. Consider cellphones: dealers will give them to you free, provided you sign up for some service contract.

That kind of is a form of subsidy, radelyp.

Originally Posted by radleyp

Amazon could do exactly the same thing: a free reader with a one-year subscription, say, to their ebook library. The cost of the reader is absorbed into the service contract.

I'd be a bit leery of this sort of thing, speaking for myself. If it costs them even as little as $250 to make the units, then they're going to have to recoup that cost in order to stay in business. They'll also have to not lose money on the content they're "subscribing" you to. I have nightmare visions of a new round of "Columbia Record Club" type things for e-books. I don't want to climb in that particular type of pit if I can help it.

Maybe they can come up with an arrangement that would be fair all around (and I, personally, don't doubt that they'll sure try), but I'd want to read the fine print very carefully before I agreed to it.