The new Kindle wants to offer students an offer they can't refuse

Amazon introduced today the Kindle DX, a larger version of the Kindle, targeted at readers of textbooks, newspapers and documents.

It is definitely larger than Kindle 2 - Kindle DX’s display has 2.5 times the surface area of Kindle’s 6-inch display. It's also more expensive - the DX costs $489, $130 more than the Kindle 2.

The new addition to the Kindle family is mainly focused on students and newspaper readers. When we talk about students, we talk of course about textbooks. And there's a good reason for that - the $9.8 billion textbook market which Amazon is hoping to penetrate.

According to Wired, Amazon said it had reached agreements with three major textbook publishers representing 60% of the higher-education market books available in the Kindle store: Pearson Education, Cengage Learning and Wiley Higher Education. Amazon also collaborates with six colleges and universities — Pace, Arizona State, Case Western Reserve, Princeton, Reed College and the University of Virginia — to test the new device with students later this year.

The new Kindle is expected to face couple of challenges, especially when it comes to students. Firstly, it competes with laptop, a device more than 80% own and allow you to buy, download and read e-textbooks, usually on a larger screen. Also, the Kindle can't show video or color images, which is a big disadvantage especially with the growing power of video content (the Kindle DX is designed to mimic the experience of reading printed black ink on paper).

Another challenge is pricing. e-textbooks are usually cheaper in 50% than paper textbooks, so how much will Kindle's textbooks cost? will they also have price advantage in comparison to textbooks you can download to your laptop, or there won't be any difference. In the meantime, there's no information available yet - the Wall Street Journal reported that a spokeswoman for Pearson said its education division, which publishes textbooks for all grade levels, hasn't yet decided how many titles will be available or how much the Kindle versions will cost.

Besides convincing students why they need to buy Kindle in addition to their laptop (no student will buy the new Kindle instead of laptop), Amazon is facing competition from couple of other companies, as the New York Times reports today. Few companies, according to the NYT, are expected to begin selling portable reading devices in the next year, including Plastic Logic, a well-financed start-up which we wrote about last year, FirstPaper, backed by the publisher Hearst; and Apple.

Jeff Bezos said today that the new Kindle is a step in the direction of a long-dreamed-of paperless society. His vision of paperless society is definitely one we can identify with as it will be also an important step towards sustainable reading.

Nevertheless, we're still waiting for more assurance that Kindle is the right tool to achieve this goal, and that it doesn't have any environmental impacts that would be greater than its positive contribution to the environment. As soon as we'll have more conclusive data with regard to this issue, we will be able to look at the Kindle as a green solution, but at the moment we will lack the necessary information to be able to determine that.

More posts on Amazon:

Amazon did great on the first quarter. Can it also help the book industry to go green now?

Kindle2 series:
Part 1 - David Pouge and the final battle

Part 2 - Bezos on the Daily Show

Part 3 - How much money it will make?

Part 4 - Authors Guild and the read-aloud feature

Part 5 - Did you kindle today?

Yours,
Raz @ Eco-Libris
www.ecolibris.net

Amazon did great on the first quarter. Can it also help the book industry to go green now?

Amazon.com announced yesterday its first quarter (Jan-Mar 2009) financial results and not surprisingly it did very well and even managed to beat Wall Street expectations.

Here are some key figures from Amazon's press release:

Net sales increased 18% to $4.89 billion in the first quarter, compared with $4.13 billion in first quarter 2008.

Operating income increased 23% to $244 million in the first quarter, compared with $198 million in first quarter 2008.

Net income increased 24% to $177 million in the first quarter, or $0.41 per diluted share, compared with net income of $143 million, or $0.34 per diluted share, in first quarter 2008.

So how come other companies both in the book industry (as well as outside the industry of course) are struggling so much and Amazon is doing so well? well, there are couple of good reasons:

1. The Kindle factor - Jeff Bezos, Amazon's CEO is quoted on their press release saying "We’re grateful and excited that Kindle sales have exceeded our most optimistic expectations." Now, Amazon didn't release new sales numbers, but according to a couple of estimations we discussed earlier this year when Kindle 2 was released it can be very substantial. In any event, the Kindle definitely helps to generate a positive buzz around Amazon and generate a positive sentiment.

2. The weakness of Brick and mortar companies - Imran Khan, an analyst at JP Morgan told the New York Times that "Brick-and-mortar companies are going bankrupt and going out of business altogether and that is helping Amazon gain market share".

3. According to Reuters, Bezos also said shoppers enrolled in the Amazon Prime discount shipping program were boosting growth, as they were picking up goods across multiple categories.

I don't know if Amazon actually sold more books on the first quarter in comparison with the first quarter of 2008. Books are part of the media segment, which we know that rose in 7% this quarter to $2.7 billion sales. But we don't know more than it, so we could only estimate and my estimation is that there was probably a modest growth, which is also impressive in the current economic environment.

The last but not least point I wanted to make is regarding the carbon reduction goals of the book industry we discussed here on Wednesday. As Amazon gains a greater importance in the book industry, I thought of an idea that could generate a stronger incentive for the publishers to meet their goals (and I'm leaving the impact of selling more e-books aside for a moment, as this is still inconclusive).

My suggestion is that Amazon will provide better pricing to publishers that will meet certain carbon reduction goals. As the biggest bookstore, a carbon-based pricing can definitely drive publishers to put more efforts into their carbon reduction attempts.

It makes sense if we look at it through the ultimate test of 'creating a shared value' - publishers will gain more profits with better pricing on sales of their books and Amazon can gain by strengthening the green side of its image and attracting more customers that will feel good about being part of such a program and supporting the environment without the need to pay any premium. Looks like a win-win model to me.

I can only hope Amazon will take the challenge of leading the book industry not only by sales, but also with the efforts to reduce the industry's carbon footprint and make reading more sustainable.

Yours,
Raz @ Eco-Libris
www.ecolibris.net

The Kindle 2 week - part 3: How much moeny it will make?

The Kindle 2 is not only an updated version of the Kindle, but also a money-making machine for Amazon according to analysts' estimates.

How much money? well, it depends which analysis you read. Greg Sandoval reports on CNET news ("More heady Wall Street predictions for Kindle 2") on all the figures that have thrown up in recent days:

Citigroup: Analyst Mark Mahaney published a report that predicted the Kindle 2, which he refers to as the “iPod of the Book World,” would generate $1.2 billion in revenue by 2010 (4.4% of Amazon's revenues). How did he reached $1.2 billion? check out his calculations (published on MediaMemo).

Collins Stewart LLC: analyst Sandeep Aggarwal said Amazon will generate US$1.4 billion from Kindle sales and book downloads by 2010. Collins, according to Sandoval, also compared the Kindle 2 to the Sony eBook Reader in 13 different parameters and concluded that "Except for (the) touch-screen and built-in reading light offered by Sony, the Kindle is a much better device."

And one more - Barclays Capital: Analyst Douglas Anmuth estimated more than 1 million Kindles may be on college campuses by 2012, generating an additional $700 million in revenue for Amazon. Total revenue from Kindle sales and downloads may reach $3.7 billion by that time, he said.

If you're wondering how many Kindle devices were sold so far, you won't find the reply on Amazon, but Citigrouop Analyst Mark Mahaney estimated Amazon sold 500,000 devices last year.

Yours,
Raz @ Eco-Libris
www.ecolibris.net

The Kindle 2 week - part 2: Bezos on the Daily Show

We're continuing with our special Kindle 2 week, where we cover the Amazon's new e-book device that was launched last week.

Today we have a special gem: Jeff Bezos, Amazon's CEO is coming to the Daily Show to chat with John Stewart on Kindle 2, where he is revealing one important advantage of the device: you to read with one hand.

Now, seriously, this might be the funniest piece you'll see on Kindle 2, and maybe even one of the best talks I saw on the Daily Show (one of my favorite shows..). Still it includes some interesting insights on the Kindle and how people, like John Stewart, who enjoys the "comfortable low tech" characteristics of books see it.

The Daily Show With Jon StewartM - Th 11p / 10c

Jeff Bezos

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Yours,
Raz @ Eco-Libris
www.ecolibris.net

The Kindle 2 week - part 1: David Pouge and the final battle

Amazon.com released last week Kindle 2, the new version of its e-book reader. Given Amazon's growing role in the book market and the influence Kindle has on this market, we decided to try and bring you a couple of interesting and hopefully unique perspectives about the new Kindle.

So for the next seven days, we will bring you each day a little Kindle piece. Hopefully by next Thursday we will have a better understanding of the big Kindle picture.

On the first part we invite you to get to watch this video, where David Pouge, the New York Times technology columnist, reviews the new Kindle 2 e-reader and wonders if e-books will make physical books obsolete. He gets an e-book and a paper book into an imaginary bottle you have to watch - it makes some very good points and it's also very funny. You're also welcome to read his column "The Kindle: Good Before, Better Now".



Yours,
Raz @ Eco-Libris
www.ecolibris.net