The larger display on the DX is particularly suited to reading newspapers, magazines and textbooks, and Amazon is focusing especially on this with the DX.
Could the Kindle DX help save the dying newspaper industry? Clearly the industry hopes it will – both the New York Times Company and the Washington Post Company will pilot a program where they subsidize the cost of a Kindle for consumers who live in areas where they cannot get home delivery. Presumably these consumers are used to getting their news from other sources – many of them online and for free – so the impact of these programs on subscription numbers may be fairly limited.
What really caught my eye about the Kindle DX announcement, however, was the announcement of collaborations with textbook publishers and universities. Till now, the Kindle has been very much the early adopter’s product. At $359, it’s a purchase hard to justify for most. But adoption by the student community could be the tipping point, and could help make the Kindle the iPod of the publishing industry.
The iPod made it easy for music lovers to carry large parts of their music collections with them – an extremely liberating experience! For students especially, the ability to carry around thousands of books with them on one device would be even more liberating.
Here are just a few scenarios which come to mind:
1) Schools and colleges hand out or subsidize the cost of a Kindle for every student. Textbooks for all courses are available as lists on the Kindle for easy purchase.
2) Instructor-created material such as reading lists, notes and presentations are made available as PDFs and can be downloaded by each student onto their Kindle.
3) School library access configured on each student’s Kindle. The library pays for a certain number of licenses for each book; students can browse through books, check them out and back in, all without having to visit the library.
4) A subscription-based model for textbooks and reference books – think Netflix meets Kindle. For a fixed monthly fee - which could be built into the tuition fees - students can “rent” a certain number of books a month.
The possibilities are endless. And the “catch them young” strategy means that Amazon is creating customers who will likely stay with them as they move from being students to members of the workforce.
A few other thoughts on the future of the Kindle:
Pricing
$489 for the Kindle DX and $359 for the regular Kindle is beyond reach for many potential customers - we can look at this as being the “early adopter tax”. However, prices will inevitably come down as volumes increase and the technology improves, bringing down manufacturing costs. We will likely see more affordable versions with a reduced feature set at some point, kind of like a “Kindle Nano”.
3G Connection
Part of the cost of the device is the lifetime Sprint 3G wireless connectivity built into every Kindle. With ubiquitous wi-fi availability in the home, at school and at work, this is not really necessary. Amazon could easily cut this feature and drop the price.
Color Display
While current technology and manufacturing costs limit the display to 16 shades of grey, consumers want color! It is inevitable that we will see versions with a colored display once this becomes economically viable.
Subscription-Based Services
I touched upon the subscription-based model in the context of educational institutions earlier, but there’s no reason this could not be extended to all users. Subscription-based music services such as Rhapsody offer music “rentals” for a fixed monthly fee, which lets users download songs and listen to them for as long as they maintain their subscription. Similarly, Amazon could offer book “rentals” for a monthly subscription.
Taking this a step further, the cost of the device could be subsidized with a contract for a particular length of time, similar to how mobile providers will subsidize the cost of a mobile phone with a one or two year contract.
Digital Rights Management
One of the concerns consumers have with e-readers in general has to do with the Digital Rights Management (DRM) on them. Should I spend my money buying books on the Kindle when these books will only work on the Kindle? What if they drop support for the Kindle someday? What if another reader like the Sony Reader Digital Book becomes the dominant e-reader on the market and makes all my Kindle books obsolete?
The addition of PDF support to the Kindle DX is a step in the right direction. This opens the Kindle up to non-DRM content, as well as content from sources other than Amazon, and makes it a more useful and versatile device for consumers.
The digital music industry has acknowledged that consumers prefer non-DRM content; there is evidence to show that removing DRM increases music sales. In January 2009, Apple announced that it would be making its iTunes Music Store completely DRM-free. All the digital music downloads which Amazon sells are non-DRM MP3s.
Whether Amazon will go the same way with the Kindle some day remains to be seen.
