iPad Killed Kindlenomics

iPad Killed Kindlenomics

Summary: With falling prices on more advanced multipurpose digital convergence devices such as the iPad, HP Slate and Android tablets, single purpose e-reader devices such as the Kindle face extinction.

SHARE:

Special Report: Apple iPad

With falling prices on more advanced multipurpose digital convergence devices such as the iPad, HP Slate and Android tablets, single purpose e-reader devices such as the Kindle face extinction.

April 3, 2010 will mark the beginning of the end for Amazon's great hardware experiment -- the Kindle. Faced with inexpensive, multipurpose tablets such as the iPad, which will be able to consume content from multiple sources including Amazon itself, consumer interest in the Kindle will fade into oblivion.

Kindlenomics, the model for cost justification for owning one of these devices just got blown out of the water by the iPad.

Click on the "read the rest of this entry" link below for more.

The first casualty in the Great e-Reader Purge of 2010 will be Amazon's 10.4" (9.7" viewable) Kindle DX, which at a $489.00 price point is a non-starter when it is only $10 cheaper than the entry-level 16GB iPad that features approximately four  times the storage capacity and a brilliant color 9.7" IPS (In-Plane Switching LCD using LED backlight) touch screen.

As a content consumption device, the iPad has a display with a much faster refresh rate, a much faster processor  and has access to over 150,000 applications over ubiquitous high-speed Wi-Fi, including the free Kindle for Tablets app that will provide all of the functionality of the inferior, dedicated black & white e-reader, and then some, because it will be able to read Kindle books in color, as shown in a screen shot of the application below.

Why buy a Kindle DX that is limited to reading and buying books from Amazon, when you can get an iPad for 10 dollars more that reads content for Kindle, Barnes & Noble eBooks, Apple's own iBooks, Lexcycle Stanza, and brilliant full-color magazines from Zinio? Not to mention read blogs and websites for free that Amazon otherwise charges for to convert to its proprietary format?

In an initial defensive move, Amazon will certainly try to sell off the  the existing inventory by dropping the cost of the DX unit down to $400.00, or possibly even as low as $359.00 but nobody in their right mind will pay $400.00 let alone $359.00 for the large form factor version which is essentially a one-trick pony. The DX is not long for this world, and Amazon knows it.

It could be argued that some, but not probably not many people, might actually prefer the black and white Vizplex technology over color, and enjoy the superior battery life of the e-ink display as well as the ability to read outside in full sunlight. It's a fair argument, and I won't discount it.

Indeed, there's probably a very small group of people that still want this technology around, and need it for the reasons above, but it's probably not the folks who were in the market for a large format, 10-inch device for reading newspaper content.

As I explained in my original Kindlenomics article, those folks still wanting e-ink are the extreme, voracious readers, who read in excess of 10 books a month. And more than likely, those folks really need something more portable, like the Kindle 2, the DX's smaller 6" sibling.

Also Read: Why Amazon Should Not Be Apple and Jeff Bezos is not Steve Jobs

Of course, this now introduces a number of factors that will send Kindlenomics into a tailspin, even for the voracious readers that genuinely want a smaller and more power-efficient device. If the price of the DX has to be dropped around $100 or more in order to continue to move the product out of inventory, that means that the price of the Kindle 2 will also have to drop to around $199.00 from the $259.00 it is priced at today.

However, is $199.00 a price point that will still allow Amazon to sustain a viable business model for continuing to manufacture and sell these single-purpose devices? Probably not.

Also Read: Kindlenomics Zero, When e-Texts have no entry cost

The Kindle 2 is also facing the Big Sleep, even when sold at a discount price of $199.00. My line of reasoning for this prediction is that I believe that the iPad is going to eventually have a "little brother".

Tentatively, I'm calling this probable device the iPad Mini. This would be bigger than an iPod Touch, but smaller than the current iPad, with a 6" color touch screen, thus giving it the same viewable display area of the Kindle 2.

I estimate that this device will sell at a base price of approximately $349.00, and will be introduced sometime in 2011 when the iPad line is refreshed. The iPad Mini will also likely replace the iPod Touch unless the cost of the Touch is also dropped accordingly.

If you think 2011 is too far away and the Kindle has plenty of time to catch up in technology and sales, think again. Long before iPad Mini ever arrives, there will be other multi-purpose tablets based on Android from other manufacturers that will sell for between $200.00-$300.00 that will have approximately the same screen dimensions as the Kindle, and will be able to run the Kindle for Tablets software in addition to reader software from Amazon's competitors that will give them access to content from a variety of sources.

Dell's "Streak" (shown left) will likely be the first mass-marketed product in this category, although pricing and availability has not yet been announced.

At a $200.00-$300.00 price point for an Android tablet, only the most hardcore readers absolutely dedicated to the black and white e-ink technology will want to stick around with a device like the Kindle 2. That's not enough of a market for Amazon and the other companies making these devices to justify continued production.

You can bet that long before iPad Mini ever ships, $200.00-$300.00 Android tablets will also be sporting inexpensive color dual mode transflective touchscreen displays, which have all the power consumption and readability advantages of e-ink and all the flexibility and screen refresh speeds of LCD. And with that technology, even the remaining Kindle hardcores will be compelled to abandon ship.

For end-users to continue to justify the need for a dedicated e-reader, Amazon will have to DRASTICALLY drop the price of the basic Kindle to around $100-$125.00 per device.

Considering the manufacturing and distribution costs for the unit, it's probably not worth it for Amazon to introduce such huge price cuts because it would likely cause the company to lose money on each sale. Facing such extreme competition from the multi-purpose tablets, the Kindle and other dedicated e-readers similar to it such as the Sony Reader and the Nook will be extinct by 2011.

And why not? If the Kindle for Tablets application and the Barnes & Noble application continues to make Amazon and B&N viable content suppliers on iPad and other devices, then by all means, put a fork in the dedicated e-book readers, they're done.

As the great Yosemite Sam once said, if you can't beat em, join em. Will 2010 be the year that Kindlenomics died? Talk Back and Let Me Know.

Topics: Hardware, Amazon, iPad, Laptops, Mobility, Tablets

About

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

172 comments
Log in or register to join the discussion
  • b&w ebook reader = $99, or they will all die

    my assumption is that only the very cheapest black and white ebook readers stand a chance of surviving. I'd say the $99 price point for a black and white unit is about all someone's going to be willing to pay in a year's time.
    Snark Shark
    • Well, perhaps, but ...

      ... I'd expect that a $200 price-point is more likely for B&W eInk and $300 to $350 for color eInk on a dedicated eReader such as the Kindle.
      M Wagner
      • Re: Price point

        A more correct retail price point for the e-book devices should be $50. And they should add the capabilities of an HP iPaq 210, including the color screen.

        Why do we not have color capability on the epaper yet? Development is going too slow on these things. It's been more than 10 years since Xerox announced that they had developed what is now eInk, so where is the development?

        As for the Kindle, in quantity it could be manufactured for under $30. So I'm holding out for a $50 ebook reader.

        Until then I'll read my books on my computer screen in glorious color.
        bart001fr
        • The problem is the Vizplex part

          Vizplex is the sole supplier of e-Ink screens, they patented the technology. Therefore that part even when supplied in volume to companies like HanLin (which sold millions of the V3 reader in China, known in the US as the Astak EZReader, $200) is going to eat up a big part of the production cost. So unless Vizplex drops the prices on those screens, you won't see it at 50 bucks. LCD technology is cheaper because MANY companies produce that component and it is a very competitive market.
          jperlow
    • How about $50

      I've said all along I don't think a basic book reader is worth more than $50. At the point where it has the capabilities of a computer, that's another matter.
      abarten
      • I aggree Abarten

        And you can always download the apps for these readers onto your pc or Itouch/IPAD etc
        Creeping Critter
    • exactly . . .

      While visiting Singapore recently I had a conversation with a store owner on Sim Lin Center, their big electronics location. Our conversation centered on the absurd price for e-readers and he said there was an expectation in Asia for a $99USD device equivalent to the Kindle.
      My personal price-point is around $60USD.
      pikeman666
    • you are right

      Cost is the name of the game....
      Osmarfo
    • B&W e-ink

      Sorry but Ive seen the Kindle, The Nook and the Sony reader along with a few others. Theyre all very nice and easy on the eyes. I currently own an Itouch(yes i know small) and intend on purchashing the IPAD. The Kindle reader and B&N reader can change screen colors (like white letters on a black background) and is viewable in direct sunlight and also easy on the eyes because u can always change things around on it.

      I will be waiting for the next generation of IPAD though mainly because I'm sure the first one will always have some bugs to work out.
      Creeping Critter
  • I'm still going to buy an e-ink device for reading

    I don't care how much more the tablets can do. If I'm buying a device for reading, I'm going to buy the one that lets me do it most comfortably and with the longest battery life, end of story. I don't need all my devices to be high tech swiss army knives, especially when they're duplicating functionality I already possess in my other devices.

    Also, it's my understanding that the price of the Kindle includes a wireless plan that doesn't include monthly payments as the iPad 3G does.
    eMJayy
    • Kindle Wireless Plan....

      is only used for downloading ebooks.
      msuper69
      • Wrong - browsing IS included with the Kindle.

        The Kindle's wireless plan includes browsing on it's admittedly primitive browser. It's good for checking mail, Wikipedia and other mobile sites. I know because I've done this many times.
        djlong
        • Admittedly Primitive?

          It's neolithic in comparison to the iPad implementation of Safari which is full-blown Webkit based. At least on a iPad I can go to the full HTML5 GMail site and not want to throw the device up against the wall with the mobile version of the site on a Kindle.
          jperlow
          • And therefore the reason

            ebook readers exist. ebook readers are not used for viewing websites. They are used to read books. There is a market for both and I don't agree with you that the Kindle or nook is by any stretch dead.
            People
      • Jason, you are too harsh, the browser is fine...

        I use the 'primitive' browser on the Kindle for wikipedia, to get the weather, and to get basic news. If you confine yourself to text-mostly websites it is good enough and has side benefits of no ads, quick, and free (no data plan needed).
        batpox
    • I agree

      The iPad is nice, and I might own one, but I will still own and use my Kindle for reading my 1 or 2 books per month. I like the e-ink and battery life.
      As an e-reader, the iPad or similar tablet device with all its fancy applications would be too much of a distraction for this ADD IT guy.
      null.corey
    • Exactly!

      All these columnists seem to have one thing in common--they have no idea of the pleasure of reading for its own sake. If you are aware of the device you are reading something on, either what you are reading is not very good, or the device does not fulfill it's function as well as a book or e-ink. Nothing backlit will be as versatile as e-ink or some equivalent thereof.

      I'm getting pretty irritated with people who never liked something telling the rest of us that we shouldn't like what we want, because something else will do something entirely different better.
      scottmbaker
      • I spent a vacation last year

        sitting poolside in Hilton Head, SC in full sunlight and reading about six novels on a Sony PRS-505, which has the same screen as a Kindle. So yes, I know what reading for reading's sake is and I enjoy it. I'm also currently reading the 800-page long biography of Albert Einstein, in print. It's fascinating stuff.

        However, that scenario would be an unusual circumstance for me, I'm more likely to be inside when I am doing most of my reading than outside.

        While I may disagree with many of the things Apple does, the one thing they understand is User Experience (UX) and device design, so I expect the iPad to be an excellent reading device for indoor use.
        jperlow
      • Books beat e-book readers

        Nothing back lit will ever be as versatile as e-ink. How about ink? e-Ink is only ever trying to copy ink in the first place and does that job badly.

        If you only want a dedicated e-reader, then you are part of a small group. Most people will switch to multi-purpose devices or stay with books. Vote one for the author - can't see how the Kindles will survive.
        thartnell
    • Yep : Battery life trumps color

      An IPAD is useless if the batteries don't live for multiple days of use.
      syfr