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The Kindle Hardware Tax

There’s a lot of news about Amazon’s new Kindle 2 today, and it does look like a nice upgrade. I still don’t want one, though. What I want is Kindle software. I’m hoping the early suggestions that Amazon is thinking that way prove true.

I use my iPhone for ebooks all the time now. I buy through Stanza, a very nice app, which is backended into Fictionwise. The buying experience between the two is pretty much terrible — syncing down to the phone is painful, and having to enter your full credit card number to “unlock” the DRM makes me angry and frustrated at the same time — but it’s certainly good enough to make me excited about ebooks. I recently found myself wetting my fingers to turn the pages of a Stanza book I was reading — the illusion that I’m reading a book is convincing.

Amazon has an interesting set of choices to make about how to proceed. This market seems like a pretty clear case of Tim’s core Web 2.0 idea of “software above the level of a single device” — do they really believe they can own the ebook device market and the ebook format market? do I really want to buy their hardware to read all the ebooks I read? I’m skeptical. I think if Amazon really makes Kindle books available on any hardware, including their own, they’ll win. If I have to buy a $350 device — or even a $99 device — carry it, charge it, pay for otherwise free blogs on it, and so on, that won’t work for me and someone else will win instead.

My devices have a history of merging or dying. I was an early adopter of the Palm Pilot, but stopped upgrading after the Palm V, which kind of worked for me, until the Treo came out, merging my phone with the PalmOS. That won out until the iPhone, which merged my phone, organizer, and iPod. The Kindle asks me to separate out a merged-in app for the benefit of — well, what benefit? The display? It’s nice, but not nice enough to take on the cost and the bother of a separate piece of hardware.

Amazon has every opportunity to trump the Fictionwise/Stanza book-buying experience — Stanza’s experience certainly isn’t “One-Click.” Worse, the prices in Fictionwise are higher than Kindle — not to mention print — for many of the books I’ve compared. For example: the last book I read on Stanza, The Art of Racing in the Rain, works out as follows (highest price to lowest):

[UPDATE: after posting this, I noticed that the price on Fictionwise for Stanza (stanza.fictionwise.com) is $2.84 more than the main Fictionwise site (www.fictionwise.com) price. Weird! I've updated the table and comments below.]

Stanza Fictionwise price: $18.95
New hardcover price on Amazon: $16.29
Main Fictionwise site price: $16.11
Used hardcover price on Amazon: $10.97
Kindle price: $9.99

Kindle prices in that one case are beating both new and used print prices, and are trouncing the Fictionwise/Stanza price for apples-to-apples comparison. A number of other books I checked are substantially more expensive on Stanza than they are in
hardcover, paperback, used, or Kindle.

I’m already paying for cell phone service, so it might well cost Amazon less to sell me a Kindle book than it would to sell the same Kindle book to a Kindle owner, assuming their profits aren’t all in the device itself. Presumably they have better price negotiation power with the publishers, based on their existing print book sales, so they might well be able to compete on price for some time. Oh, and: I would totally pay $20 for a well-made Amazon Kindle iPhone app if it gave me access to books at Kindle prices. It seems like costs add up well on Amazon’s side.

While the new Kindle upgrade is nice, owning another device is a kind of a tax. They need to care a lot less about the hardware business than they do about the software service. They’re positioned to win on the latter and lose on the former.

  • http://pathable.com Peter Brown

    While all that stuff is true, it’s just too much of a hassle to stare for hours on end at an iphone screen… Don’t know if it’s worth the cost, but I won’t be reading novels, or computer manuals on my iphone. I would on a kindle though, based on what I’ve seen.

  • Dan Craig

    It’s a good point, but it misses the possibility of the Kindle-as-platform. I agree, readers using Amazon’s books should not be confined to the Kindle hardware. I’m also a Stanza user, which is great for public domain books. I haven’t tried buying anything, but if I could buy books from Amazon for it, they’d be my first place to look to purchase from.

    On the flip side, though, is that the Kindle (or some other e-paper device) has a lot of potential as a platform. My reason for not considering buying a Kindle is that I don’t want to be locked in to what I can read on it. I want to be able to read free public domain books, or PDFs, or even RSS feeds. Of course, I can do that on a laptop or iPhone, but not with the same kind of battery life. Why not open it up to independent development, like on the iPhone? Make money off the hardware, which you certainly can’t pirate.

    Personally, I think they should be marketing Kindles to students and schools as a substitute for textbooks. These days, a couple textbooks cost as much as a Kindle, and it’d be nice to not have lug around as much weight if you want your books with you. I wish I had such as thing when I was a student.

  • http://www.wesabe.com Marc Hedlund

    Dan: I agree, they could open up as a hardware platform rather than as a software service. Or even both. Surely they must be thinking about both, but for me, the software need is much more immediate, and the competitive pressures there (from Google on the high end and Stanza on the low end) seem more immediate, too.

    I just hope they open up one way or the other.

  • http://drcraig.blogspot.com Dan Craig

    Marc: Very true. I hope they can expand in both directions. An Amazon download service would be great. I wonder what kind of resistance they’ve gotten from publishers on that? Perhaps the Kindle is so closed up is to appease the content providers? It wouldn’t surprise me, given the characterization of terrified publishers (O’Reilly notwistanding, of course :), in John Siracusa’s article on e-readers in Ars Technica.

    http://arstechnica.com/gadgets/news/2009/02/the-once-and-future-e-book.ars

  • Lisa Chan

    If you’re frustrated with the price point of the Kindle and the syncing and DRM issues of Stanza, check out Shortcovers, a new online and mobile app that launches at the end of this month. The experience is great on the iPhone, but they’ll be launching on Blackberry and Android, with other platforms to follow.

    Shortcovers is the new digital arm from Indigo Books & Music, Canada’s largest book retailer, and offers books, magazines, blogs, newspapers and user-inspired writings such as fan fiction.

    People are reading differently, in shorter more frequent sessions, which is why Shortcovers also offers free sampling and purchases chapter by chapter. There will be 200,000 chapters and free excerpts available, with 50,000 of them available for purchase as full digital titles. Prices for digital downloads (i.e., “shortcovers”) start at $.99 for most chapters and excerpts and go up to between $10 and $20 for full e-books. If you download an excerpt from a book and want to purchase the full digital edition and it isn’t available, Shortcovers will direct you to a major book retail site where you can then buy the physical book.

    Go to http://www.shortcovers.com to sign up and get notified when the service is available.

  • http://blogs.oreillynet.com/daledougherty/ Dale Dougherty

    There are different types of reading, and readers. Perhaps the Kindle, iPhone, and laptop will be used differently for different kinds of books by different kinds of readers. I’ve found it hard to read a long book on the iPhone, but I’ve read a 1000-page book on a Sony Reader. I’ve download longer PDF books from Google Books but they seldom get much of my attention on my laptop.

    I didn’t mind using the e-reader. I prefer a print book, especially if the book is one that I will use repeatedly, rather than read-once and toss. However, I see a place for the e-book reader. The portability of print books is a real problem for many of us. That 1,000-page book doesn’t easily travel with me but an e-reader will. The first generation Kindle looked kind of clunky and I thought the Sony Reader was a better e-ink implementation. I’ll have to look at this new model closely.

    The iPhone seems ideal as a lookup device but not a reading device. The kind of books I want for it are quick references and even reference guides with short answers such as dictionaries. As I said, I struggled with the screen size for longer-form content. I do find myself reading news and short-form content on the iPhone quite successfully. The big advantage to the iPhone is that it’s with me and I can easily fill time reading. However, ever since the days of Palm and iPAQ, I’ve hoped that one of these handheld devices would prove useful as a reading device but they are quite limited. Even reading web pages on the iPhone is a chore.

    A publisher might want to think of the iPhone as an interface to a book but not the book itself. A reader might want both, and might not expect to pay for them separately. You might look up a recipe using an iphone and you’d retrieve the recipe on your iPhone but you might also own or access the book, which could provide a great deal more context for the recipe as well as other recipes. (If I want to learn cheesemaking from a book, I will sit down and read through the book; when I’m making cheese or buying ingredients to buy cheese, I want easy access to a particular recipe from the book.)

    Among the Kindle users I know, there are some who will never have iPhones. These folks aren’t necessarily gadget-oriented — quite the opposite actually — and that’s surprised me. What they like is being able to download books and have them available when they want. To these folks, it’s magic and it’s simple. They don’t feel that way about computers or cell phones, which are too complicated for them. The folks I know that fall into this category describe this activity as “reading for pleasure.” With that focus, doesn’t it makes sense that you might prefer a device that does just what you want, and not a lot more?

  • ML

    Good point about converging devices, but I think the two experiences are quite different and can only be served by two separate technologies right now (eInk and multi touch screens). It’s obviously better to have them all as one device, but in this case, there’s a big cost for merging: the reading experience is not nearly as good.

    It could also be that Amazon was playing defense as they were afraid of Apple creating its own bookstore? After all, Apple was able to create a music store, a video store, and an app store pretty easily. Perhaps, Amazon was afraid that if it didn’t control the platform itself, it could be locked out.

    Also, the Kindle could be the first step for a broader platform? Can it have eInk on one side, multi touch on the other? It’s serve as a book reader and a video player, all plugged into Amazon store.

  • http://www.theherne.com Herne

    Amazon isn’t serious. A real book reader isn’t going to spend $360 on a device for reading books. Why would I buy a Kindle when I could buy a Netbook or iPod Touch for a similar price? Nor am I interested in buying data or “air” from a company that locks me into their hardware to read this data. If you want to sell more eBooks, include them with the printed media in a non-DRMed format. If the Kindle cost around $100 and worked outside of the USA, I might consider it, otherwise it’s a useless techno-toy.

  • http://www.wesabe.com Marc Hedlund

    Dale and others, one point I should have emphasized: I’m not saying the Kindle hardware should go away completely (just that I don’t personally want another device) — what I’m saying is that the software is very compelling and they should sell it on any device. “Kindle books on iPhone only” would be just a different variety of too constrained. I think they should sell the device as long as there’s a market for it, but to concentrate on selling the software service as the main business.

  • http://www.thearling.com Kurt

    Marc, you bring up multiple times that Amazon is selling e-books (“sell me a Kindle book,” etc.), but Amazon does not sell Kindle books. They license you some limited rights to a Kindle book. There’s a big difference.

    The economics of buying a hardcover book include the right to sell (or give away) your physical copy. This could effectively lower your overall cost, or provide you with the satisfaction of saving a friend or family member some money. In addition, the (non zero) risk that your Kindle book might no longer “work” in the future increases the cost of a Kindle book by adding in the risk-adjusted price of repurchasing a copy sometime in the future. When all this is taken into consideration, the price of a Kindle book looks even less attractive.

  • http://www.wesabe.com Marc Hedlund

    Kurt, of course, you’re correct, and that definitely weighs on my mind when I buy any ebook. The book I mention in the post, The Art of Racing in the Rain, is one I might give to my wife to read, but I’m not sure I can do that. Sucks.

    Here’s hoping the changes in the digital music market will mean similar freedoms around ebooks.

  • http://www.thearling Kurt

    There is one thing that would make a Kindle book worth a premium price, namely the ability to interact directly with a book. Think about a math book where changing an equation changed the graph, or a chemistry book where you could adjust the chemicals in a reaction. I’d love to see an O’Reilly book on Perl that allowed me to change some code in the book and see what happens.

    But this would probably be difficult and expensive for authors and publishers to do. It would also have limited applicabilty (not all that useful for top fiction sellers), but it would be fantastic for textbooks. Any chance O’Reilly might have plans to support this kind of e-book functionality?

  • Jim Stogdill

    Kurt said “It would also have limited applicabilty (not all that useful for top fiction sellers)”

    If I recall correctly, Cryptonomicon had a crypto algorithm implemented in perl in the story. Maybe there IS room for interactive code in novels. :)

  • http://brianherman.wordpress.com Brian Herman

    It seems to me that Amazon is following the recipe that Apple used with the iPod. Build a great device and offer tons of content at a good price. Get people hooked on both, THEN decide how and when to expand access to the content beyond your device (ala DRM-free content)

    When the first iPod came out we saw the same arguments now being made about Kindle – We won’t buy an iPod because:
    we hate their DRM
    we hate that you can’t play their content on other players
    we hate that you can’t play (insert random music encoding format) files on the iPod.

    But what happened? Apple won. They had a great device, better than anyone else’s (or at least close enough to win the marketing war) and they had great (yet locked in) content – but the price of the content was better. In the end Apple won.

    I don’t know if Amazon has the same kind of market in Kindle/ebooks as Apple had in iPod/music, so maybe following the same recipe won’t work – but you can certainly see why Amazon would want to try it.

  • http://lurker Sean

    I agree, it would be great not to have a different device in your pocket for every cool new technology you want to use.

    Eventually someone will figure this out, lets hope it happens sooner rather than later.

  • http://www.aleax.it Alex Martelli

    Sean (and others), you’re missing a key point that Bezos made very well in interviews: while you don’t HAVE to have “a different device for every cool new technology”, you’ll WANT to have optimized devices for uses that are sufficiently important to YOU.

    So for example I take all my photos on the iPhone — I’m just not into photography enough to bother with a dedicated camera; but it would be utterly silly to argue that this means there’s no market for dedicated digital cameras — there’s obviously a HUGE market, for both many cheap compacts and fewer costly SLRs, because many people ARE way into photography.

    Now, I *AM* ***way*** into *READING* — to a point that perfectly well justifies a dedicated device if it can optimize my user experience compared to a general purpose one. I think the Kindle 1 did not meet my threshold, but the Kindle 2 might — so I just preordered one as a Valentine’s Day gift to my wife, who’s even MORE into reading than I am (unbelievable but true;-). I’m sure she’ll be glad to lend it to me on occasions where I really need it — e.g. a trip abroad where I need to disable the iPhone data to avoid being hit with ridiculous roaming charges and carry around many paper books is particularly inconvenient. For my personal use, I think I’m holding out for a 10″/11″ inch screen (as age advances and eyes weaken, the advantages of a larger screen become more and more obvious;-).

  • Jeff Murphy

    I have downloaded books for the iphone it is a reading experience of last resort for me. It is a poor ebook reader at best, especially for technical material. I am planning on buying a Kindle once more content is available. There are several O’Reilly books I would love to be able to take with me even if I had to re-buy the electronic version.

    For me it’s all about portability and readability and the Kindle fits the bill for me, I just need content.

  • Clay Jackson

    So – what’s the ‘Official’ O’Reilly Publishing take on Kindle. I notice that (at least as of this evening), there don’t appear to be ANY O’Reilly books available on Kindle, which sorta surprises me, but also doesn’t – if they WERE available there, that would probably push me “over the edge” into getting one.

    I’ve had a chance to play with a friend’s Kindle 2; and, after looking hard at the Kindle 1, I’m sold on the 2. Among other things, the “instant gratification”, as opposed to waiting for the UPS person, or schlepping down to the bookstore (and always buying twice what I came for).

    Clay Jackson

  • http://toc.oreilly.com Andrew Savikas

    Hi Clay,

    Until the Kindle 2 was released, Kindle didn’t support the rendering of tables or of computer code, both of which are in ample supply in most of our books. We feared customers would be disappointed to find much of the content only marginally usable, so decided to hold off on putting most of our books into Kindle until the rendering improved.

    In the meantime, with any of the “ebook bundles” you purchase from us at oreilly.com, you get a .mobi version that can be uploaded to your Kindle via USB, or downloaded directly by visiting your account page from the Kindle browser at oreilly.com/e. We compromised on this as a short-term solution, because those bundles also include both EPUB and PDF formats, which can be read with a variety of devices and do display tables and computer code correctly.

    The new Kindle 2 does provide rudimentary support for tables and code (though still not quite up to basic HTML standards, unfortunately), and we’re currently doing testing in advance of adding several hundred of our books to the Kindle store.

    You may also want to check out the open source Bookworm EPUB reader, which works in a browser and on a variety of mobile devices, including integration with the popular Stanza reader on the iPhone. Ironically, our ebooks look great when viewed in Bookworm on the Kindle’s Web browser — which does indeed support tables and computer code.