A friend of mine working at Amazon sent me a note about the new Amazon Kindle. Here are my initial thoughts after reading about it and watching the videos.
From atoms to bits: Amazon was initially an online book-store. Amazon became the online store to get atoms of any kind (they built a platform so anyone could sell stuff using their platform). They started offering downloadable images of books a few years ago. They recently started offering MP3 (bits), Now electronic books with a custom reader. Investments in S3 technology and these developments clearly show that Amazon is going into the business of delivering bits and not just atoms.
Bits are more profitable:This is just the beginning. Delivering bits is big business. There are economies of scale to benefit from. Amazon could start offering Videos (TV, movies, Youtube, surveillance), audio (Voicemail, mp3s, recorded conference calls), software (apps, updates, upgrades)... In general, I like the trend of getting into this business. The margin in bit delivery is higher than atom delivery.
Also, I see a clear move towards global and off-line access. The choice of using a cell network instead of Wi-Fi reflects this intent.
Price: This device itself seems too expensive ($400). I buy about $200 worth of books a year, Factoring in the savings in the new e-books, I think I am looking at a 3-4 year break-even period. This price has to fall. There are numerous comments by reviewers in Amazon.com that are demanding this. I hope they are not trying to pull an Apple and use high initial price to get interest free capital. One of these days, I hope device makers start rewarding early-buyers with a lower price.
Keyboard: It would have been much nicer to not have the keyboard and special buttons (Search, Network off, Next Page, Previous Page, and all the letters...). An on-screen keyboard (like TabletPC), A pen/touch sensitive screen would have made this look a lot nicer. It would also allow me to annotate pages. The keys are all at an angle (is this for ergonomic reasons?) At the very least, the keyboard should have been the pop-out kind.
Display: I see too little text in each screen. Most screen shots, show just one image and 4 lines of text. This makes it look impractical. All the pages are also double spaced. Wonder why?
Color: The device looks bland and does only grey-scale. Both the outside and inside need color. All portable devices are now coming in several colors. Zune, Ipod, even laptops.
Green? Is this "green"er than paper books. I would assume so but unfortunately that's not highlighted as a selling point. I wish they are cutting paper muda.
Reviews:The reviewers on the videos posted are Mr. Bezos and some authors. I would have rather like to see reviews from regular people. It seemed too artificial to me. In some cases, it seemed liked the reviewer were reading scripted stuff.
Amazon should not make hardware:Amazon should have left the making of the device to other people whose core competency it is to make nice looking hardware (like Apple or Microsoft). They could opened it up to 3rd party vendors who could have competed to make better devices.
Business Model: I like the new business model of factoring in the data transfer charges into the books. The model does break when it comes to free content like blogs. Amazon chanrges $1 per blog - but I could assimilate several blogs in one and abuse the system? The 10c per doc that is emailed seems to be ok. I could see this being extended to rent-a-book easily ($1 for 1 week of book-rental with a $1 late-fee per week).
Competition: In terms of competition, I see this as an immediate threat to Sony (they have an ebook thing (that's cheaper)). Apple's Itunes is already under attack but their cool device is keeping them alive. Apple could also fight back by making the iPhone-like device do this (but that would be so not Applesque). M$ can also get back with cheaper tablet PCs. Akamai and other edge-caching networks are easy targets. Netflix better be on the lookout (Video is next). This could also spill into cable/phone providers. None of these stocks moved too much today. Fedex and other atom movers could be affected in a decade or so if thing catches on.
Bottom line: Device - bad, Price for device - bad, getting into the bits business seriously - good. Business model - ok. Marketing/PR - bad (too scripted, bad reviews, lousy name "Kindle")
1 comment:
I tried out the Kindle (a friend from Amazon demo'd it) - the reading experience is actually very good. Not sure why the screenshots you saw only had a few lines - from what I recall it felt similar to reading a small size paperback. The thing about the Kindle screen is that it is readable in bright daylight (unlike say a laptop screen) as well as dim light. Also it seems to be designed primarily as a book reader and not a general purpose device (say with PDA functionality).
Also on selling bits - Amazon has been offering video for some time, the Amazon "Unbox" service where you can buy or rent movies.
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