Advice to Amazon -- license Kindle hardware

[LauretteBradley]

This is interesting:

http://seekingalpha.com/article/9271...out-the-kindle

I would love to see this, since I love my Kindle, but I hate the current form factor. It seems to have been designed by a highly neurotic person who was obsessed with the thought that users might not know how to turn the page.

[desertgrandma]

Originally Posted by LauretteBradley

This is interesting:

http://seekingalpha.com/article/9271...out-the-kindle

I would love to see this, since I love my Kindle, but I hate the current form factor. It seems to have been designed by a highly neurotic person who was obsessed with the thought that users might not know how to turn the page.

Or, perhaps, just perhaps, they were thinking of those who could possibly have trouble turning pages with small buttons, and designed the Kindle so that anyone could easily maneuver it.

[Taylor514ce]

Or someone who was given many "wedgies" by bullies in school, and thought, "someday, I'll get my revenge".

[Alisa]

Well that's fine and dandy to say but a lot of it hinges around this:

I don’t know how much margin Amazon makes on each Kindle sale or how much it makes on average from content purchases. But if it really wants to push ebook adoption by the masses and stay at the center of that universe, I’d recommend a dramatic shift in business model.

Imagine if Amazon launched a licensing program that gave hardware manufacturers the ability to build Kindle clones, along with an incentive to sell them at near-zero margins.

We don't know what the margin is on the Kindle and this business model hinges on Amazon providing other companies with an "incentive" to sell them at near-zero margins. This is all sounding rather expensive for Amazon. I'm not ready to make the assumption that the Kindle business is in the black after so many years of development and with a lot of the sales being $9.99 new releases. I'd be glad to hear they were breaking even.

I'm finding it hard to see how they could increase profit with this business model. I would imagine they'd have to put some sort of process in place to certify that these other devices work well with the system. They would have to manage their Whispernet access and provide support for their customers all while subsidizing the other hardware manufacturers. Also, I wouldn't be surprised if a lot of the appeal for the publishers is Amazon's closed system. They probably think it makes them safer from evil darknet pirates. What happens when someone finds an exploit in one of these other devices and they don't fix it in a timely manner? What if someone hacks it to be used as an EVDO modem? Does Amazon cut off customers with those devices? That would be a nightmare. If this happens with a Kindle, they have the control over fixing it. To me, this sounds like paying other people to make your life more difficult. The position of having the responsibility without the commensurate control is just about the least advantageous place to be.

I think it would be great for consumers to have other devices to choose from but that doesn't mean it's workable for Amazon at this point. I wouldn't be surprised if we see other manufacturer's devices when screen prices come down to where they can offer devices at a good price and pay a licensing fee to Amazon. At that point Amazon will have a bit more experience with this business and a better idea of how to manage quality and security. Complicating a new business with a system like this seems like a recipe for failure IMHO.

[TheJohnNewton]

Or they could just drop the silly proprietary format and sell ebooks to anyone with any device. Instantly they would vastly increase their potential market.

[bwaldron]

Originally Posted by TheJohnNewton

Or they could just drop the silly proprietary format and sell ebooks to anyone with any device. Instantly they would vastly increase their potential market.

Works for me. But, at least initially, I think that may mean higher prices. It seems that Amazon has been willing to take a loss on many ebooks at $9.99 in order to build their ebook/Kindle market. If they were just selling Mobipocket (and other formats) to everyone, would they continue that strategy?

[RickyMaveety]

Ah, you mean like Apple has done with the iPod?? License out the hardware so that anyone can build an iPod?? You say that haven't done that? Oh ... then of course the iPod will never be a success. How about Sony?? No? Oh my.

You say you "love [your] Kindle" ... but you "hate" the form factor?? Then, you don't love your Kindle ... you love something that doesn't exist yet. Do you love the Sony form factor? Then why not purchase a Sony??

Drop the proprietary format?? Sure ... just like Sony. Oh ... right, Sony has a proprietary format too. Bummer.

Maybe it's just because I do happen to love the form factor of the Kindle, I also love the way it works. I really love the content that is available ... more so every day as they add books and authors. In any event, unless the author wants to make the argument that all manufacturers of all products using core software should license out their hardware, then (for me) his argument fails. I do not see why it is only Amazon that should do it .... which is the impression that I get.

[Taylor514ce]

Ricky, Sony recently opened the device up to EPUB. Yes, they have a proprietary format, but also accept RTF, HTML, PDF with reflow capabilities.

I'm not one in the "blame it all on Amazon" camp. I think it's good business for them to pursue exclusive content deals and to price content aggressively.

What's good business for Amazon and Kindle customers may not, though, be good for the e-book market overall.

Speaking purely as a consumer, I want Amazon's prices and content in a format that works on my preferred device. Or, I want my content providers to match Amazon's content and prices.

Yes, it was stupid for Sony to come up with yet another format and then attempt to create a retail infrastructure to serve up that format, in direct competition to Amazon. They should have cut a deal with Amazon to sell LRF books... who knows? They might have tried to, but Amazon had a "not invented here" reaction. I don't know.

It boils down to: I don't want a Kindle. I could care less, really, about formats. I want affordable e-books for my e-book reader. I think that describes every e-book enthusiast. The sooner the market adjusts to that universal reality, the better.

[RickyMaveety]

Originally Posted by Taylor514ce

Ricky, Sony recently opened the device up to EPUB. Yes, they have a proprietary format, but also accept RTF, HTML, PDF with reflow capabilities.

I'm not one in the "blame it all on Amazon" camp. I think it's good business for them to pursue exclusive content deals and to price content aggressively.

What's good business for Amazon and Kindle customers may not, though, be good for the e-book market overall.

Speaking purely as a consumer, I want Amazon's prices and content in a format that works on my preferred device. Or, I want my content providers to match Amazon's content and prices.

Yes, it was stupid for Sony to come up with yet another format and then attempt to create a retail infrastructure to serve up that format, in direct competition to Amazon. They should have cut a deal with Amazon to sell LRF books... who knows? They might have tried to, but Amazon had a "not invented here" reaction. I don't know.

It boils down to: I don't want a Kindle. I could care less, really, about formats. I want affordable e-books for my e-book reader. I think that describes every e-book enthusiast. The sooner the market adjusts to that universal reality, the better.

The Kindle also accepts several non-proprietary formats. They just don't happen to sell them at the Amazon store.

I agree, Taylor. I would like to see all of the manufacturers agree on one format - or barring that, at least make it easy and legal for people to change from one format to another. That way ... people could just choose the reader with the format factor (or color, or screen size) that they like the best.

I think the article referred to in this thread is a bit off the mark. Amazon is a business, just like Sony. They are in the business to make money. At this moment in time, it seem to be the popular thing to second guess Amazon. Everyone seems to know what is best for the company ... and I do mean everyone, regardless of business expertise, knowledge of the ebook industry, knowledge of copyright law .... just plain every Tom, Dick and Harry (hi, guys) is willing to chime in on what should happen.

I'm only willing to go as far as saying what I would like to see happen, but I have no idea if that is in the Amazon plan or not. I am fairly sure, however, that licensing out the hardware is not the end all and be all the author seems to think it is. If it were, more companies would do it and those would be the really successful companies. But, it appears to me that the really successful companies are doing the opposite.

So ... I agree with you, Taylor, about what would be nice to see happen (from a consumer's perspective), I just disagree with the author of that article, who seems to be talking off the top of his head.

[kilofox]

I agree with the earlier Apple/iPod comment.

Amazon has seen what Apple has done with the iPod and iTunes store. (#1 selling player and #1 Music store... all accomplished in a closed system). I would be willing to bet that Amazon will continue to employ the same model.

You can cry "Open" "Open" "Open" all you want, but in the face of reality, "Closed" has been the most successful digital distribution model so far.

I am not saying it cant change, but.......

[bwaldron]

Originally Posted by kilofox

Amazon has seen what Apple has done with the iPod and iTunes store. (#1 selling player and #1 Music store... all accomplished in a closed system). I would be willing to bet that Amazon will continue to employ the same model.

A lot of iPods were sold to people that never have bought anything from the iTunes store. We have three here, and all are filled with our own CD rips and DRM-free music from eMusic and --yes-- Amazon (who loudly trumpets their DRM-free music that can work on any player).

If the iPod were a closed system, I wouldn't own one.

[slayda]

I have to agree with bwaldron on the ipod. I can play any of my MP3 music on my ipod and I can format convert my itunes music to play on any MP3 player.

[RickyMaveety]

I don't think of the iPod as a closed system ... but then, I don't think of the Kindle as a closed system either.

I can put mp3s on my iPod, or I can purchase mp4s directly from Apple. I can put mobi format books on my Kindle, or I can buy azw books directly from Amazon.

If I want to play dodge the copyright, I can take mp4s off of my iPod, burn them to CD, burn them back to mp3 and play them elsewhere on a device of my choosing, and I can take azw files, strip the drm, and read them on any mobi compatible device.

However, just as Apple has not seen the need to license out their hardware, I see no need at all for Amazon to do so with the Kindle. Just as I can use my iPod without ever having purchased a single tune from the iTunes store, I can use my Kindle without ever having gone to Amazon.

I realize people are a bit tired of the Kindle/iPod analogies, but in this case I really do feel that it holds.

[JMikeD]

I don't think of the Kindle or iPod as closed, either. I have almost no music from the iTunes store on either of my iPods, and most of the stuff on my Kindle is not from Amazon.

Apple did license out their hardware on two occasions: the Mac to Power Computing (and several other firms), and the Newton Messagepad to Sharp (who was the actual manufacturer, as I recall).

Those turned out well.