Kindle Without a Match?

by Braden Kelley

Amazon announced their new Kindle e-book reader this week amid much fanfare at a price point of $399. It uses e-ink technology and incorporates wireless access to the Kindle online store using Sprint’s network. The Kindle comes with its own e-mail address and has a built-in keyboard. They say battery life is one day with the wireless turned on all the time, or one week with this feature turned off. Will it catch fire in the marketplace?

Personally, I think even now the Kindle is still early to the marketplace and overpriced. People can buy fully-functional laptops with wireless connectivity and color screens for $399, so it doesn’t feel like good value at that price. Given that this device is competing against printed magazines and books that cost a few dollars that can be dropped and don’t need batteries, I find it hard to believe that e-books will ever catch on until they are priced less than $100 (or possibly even free). In addition, Kindle is competing against audiobooks that can be downloaded electronically to iPods and other mp3 players that people have already purchased to listen to music.

Finally, many people are carrying a laptop or smartphone around with them already (and maybe even an iPod), so this device would be an extra piece of electronice equipment to carry around and worry about keeping charged. For something to be an innovation, it truly has to be significantly better than those things it hopes to replace. The Kindle is not that.

Amazon is going to lose a lot of money on the Kindle. Maybe they are okay with that. Maybe they see this as a thought leadership play to keep people interested in the brand and see it as a leader in the marketplace. Maybe they see this as a defensive play to establish themselves in a premature market confined to an incubator until the technology matures enough to profitably live on its own. Whatever their strategy, the Kindle is going to decrease the profitability of the company and potentially even push out the date when people are finally ready to switch to e-books. I believe I could tell a firm what the winning design will be–if they asked.

For what it’s worth, I believe the switch to e-books is inevitable, but still a few years away.

What do you think?

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