An uncertain future for eBooks

Bill Gates was right about the third personal electronic device that people are going to own, but his team wasn't able to deliver the product that the public wanted. Perhaps the hardware wasn't ready for his vision to realize. Oh well, he has more important work to do now. :)

I owned my first "third" device even before I got a "second" device (a laptop). It was the Asus R2H. This may look like an antique to you, but it attracted a lot of attention from people around me. I guess you can compare this to a poor guy's sports car. The R2H was sold in less than a year of usage. It is more portable than a traditional laptop, but the performance was just unacceptable.

The two laptop computers that I own afterwards are more traditional, but they were niche market products, too. I still own both tablets after two years because it's so hard to find a suitable buyer for them. This is one of the down side from owning something unique.

Then comes the Kindle DX. The history and the specifications of Kindle can be found here. The device was bought exactly one year ago. The philosophy I hold is:

• vision is much more expensive than a few hundred dollars
• best way to learn English is to immerse oneself in a English environment, including reading books
• it attracts attentions

So I was conscious that $489 is overpriced and Amazon probably make 60%+ margin after paying the manufacturing cost to Foxconn (a Taiwanese semi conductor manufacturer). Then, iPad was launched in the 2nd quarter 2010. People had a lot of doubt about the product until they see the financial statement of Apple. Soon Amazon lowers the price of Kindle to match the competition from iPad, Sony Pocket Readers, and Nook. 

If there's one principle in new technology products (toys) that holds true throughout time, it must be "the more the better, the less sales for less". Everyone knows that iPad is just a super-sized iPhone, but the functionality and versatility are just much more than Amazon Kindle. Even as a Amazon lover and an Apple hater, I would rather pay $550 for an iPad than $400 for a new Kindle DX. So...the situation for Amazon is pretty dire unless the firm doesn't care about this product line.

If I were the manager in the Kindle division (which I am not), a few steps would ensure Kindle surviving as a niche product. 

• maintain perspective consumers by offering upgrade to future Kindles at <20% margin ($50 trade-in?)
• further lower the price of Kindle DX to stay competitive with iPad (the book sale is more important than the Kindle sale)
• through alliances, create a united front or Cartel for ebooks (trust me, Amazon doesn't need more breaking-neck competition in such a small market)
• through merger and acquisition, tap into other regional markets, such as European and Asian markets

So...what's next? The cards are currently played by Apple and Amazon, but tonnes of people want to get into the game, including RIM (a Canadian company that makes Blackberry, and no, we are not farmers). If Amazon can walk away with money on hand, then we can see Kindle 4, 5 and so on then I would be a happy camper. Too bad I am not a prophet so I don't know.......

Some Nerdy Stuff

• Kindle DX has a screen dimension of 139mm*202mm, which is approximately 1 : square root of 2, the ratio of ISO 216. This size is comparable to A5 or half of letter size. For more information, the links is on your right side
• The viewable area doesn't grow linearly with the diagonal length of a screen, for detailed calculation please check here