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Is Amazon Building a Kindle Set-Top Box?

Posted on February 10, 2012 by Jeremy Toeman

I'm awesome at photoshop! I hope it doesn't look like this!

I’m pretty sure the headline here says it all.  Let’s review the facts (it might be worth re-reading my bit on why HBO doesn’t go direct to consumers, as many of those issues are addressed here):

  1. Amazon has a large content library. They are actively increasing it.
  2. Amazon has a content distribution platform already capable of streaming to non-PC devices.
  3. Amazon has a recurring billing relationship with consumers.
  4. Amazon has a (phenomenal) marketing and distribution channel for getting devices into consumers houses.
  5. Amazon has a strong brand in the hardware space.
  6. Amazon has the customer service & support infrastructure needed to deal with service issues.
  7. Amazon has the ability to build hardware and deal with supply chain issues.
  8. The TV services industry is huge, and Amazon wants in.

Even if they don’t plan to decouple content from Amazon Prime, making a box is a very viable, and, in my opinion, a likely move.  In addition to all of the above, it is a strong move versus Apple (and possibly Google and Microsoft too).

A $99 Amazon Kindle TV box would not surprise me this coming holiday season (how about a September launch, right in time for school?).  But then again, I occasionally get Kindle predictions wrong.

Kinda saw this one coming, didn't ya?

Oh, and one more thing.  What if they do it by acquiring Roku?  Let’s review that scenario:

  1. Roku already has something better than a minimum viable product.
  2. Amazon could skip all the work on developing a new UI/UX (regardless of your feelings on the Roku UX, it is well more than functional).
  3. Roku isn’t a sustainable business yet, enabling Amazon to purchase at a reasonable price.
  4. Roku has a team with a strong background and industry knowledge relevant to the TV/Device space.
  5. Amazon can distribute the same hardware at the same price point (which seems to fall in the not-too-profitably category), yet supplement with reliable recurring revenue.
  6. Amazon wouldn’t have to drop the Netflix service, but could slowly chip away at it from within.
  7. It’s cheaper than trying to buy Xbox from Microsoft (though that’d be quite the coup, plus nobody would even need to relocate)

I don’t really think Amazon *needs* to buy Roku, but it would probably let them fast-track a bunch of steps.  And then it could be a $49 Kindle TV, which just sounds so… right.

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Posted in Convergence, Gadgets | Tags: amazon, google, internet stb, Kindle, Microsoft, roku, set top box, stb, streaming, xbox | 3 Comments |

What Would Jobs Do?

Posted on January 22, 2010 by Jeremy Toeman

If you follow gadgets or new tech and you are not aware that Apple is introducing “something” next Wednesday, you are either (1) my wife or mother or (2) awaking from a long long sleep. Now along with virtually anything Apple does, or contemplates doing, or doesn’t contemplate doing but others contemplate on their behalf, the rumor mill on this “iPad” is just out of control.  Not a day has gone by this week, and probably the week prior, where numerous stories on TechMeme centered on the speculated device.  My turn.

I’ve tried to think about this entirely with the following perspective:

  1. Tablets, as we think of them today, suck (unless you are in a very specific niche, or perhaps a crazed fanboy).
  2. Steve Jobs does not like to ship suck-y products.
  3. Apple does not focus on niche markets.
  4. Some of the rumors we’ve seen are likely correct (a million monkeys on a million keyboards…).
  5. Apple will still likely do one or more things nobody’s even hazarded a guess at.

So with that in mind, what is Apple up to?

Some more assumptions:

  • It’ll have 3G services built-in.  I’d hope for Verizon, but that limits Apple to its international possibilities.  And there’s no way they’d waste the money on two different 3G chips.
  • It’ll have a “built-for iPad” program at launch.  Still nothing from Droid on this front, but you can bet that Griffin, Case Logic, Kensington, and all the other players will have cases and other accessories coming to market extremely soon.
  • It’ll have the iPod connector, USB, DisplayPort and an SD card slot.  A webcam is highly probably, and I wouldn’t be surprised with an IR interface as well.
  • It might have some clever method of charging (magnetic induction).

Here are some thoughts on the product itself, in no particular order:

  • Sub $300 e-reader + tablet: How about if Apple directly takes on the Kindle, and throws in a great version of Safari, and a Verizon 3G connection?  They sell it at cost, give it a beautiful touch-screen, make it all iPhone-y, but keep it as a simple device.  At this price point it does compete with the iPod Touch, technically, but not in reality, as they are such vastly different products.  We know from the Kindle’s success that there’s a market for the category, and we know that the Nooks and Sonys of the world won’t stand a chance versus Apple and Amazon as the category leaders.  In the “what seems kinda possible and stands a chance at selling in the millions” way of thinking, this is definitely a contender.  Not as sexy as some other options, but possible.
  • Detachable MacBook screen: I’ve come back to this one a few times, as it seems to fit “the world we know” fairly well. What if instead of it being a whole new device, Apple upgrades all MacBooks to have touchscreens that are detachable.  In other words, the keyboard part of the laptop comes off.  It would require some fairly sophisticated engineering to pull off, as the bulk of the computer itself is in the keyboard area, but if anyone’s going to do it.  I think it’s a bit farfetched, but only because I can’t conjure up the physical realities that would be required for it to work.
  • Mac “Accessory”: Had an interesting chat about this concept the other day – basically it’s the idea that the tablet is a remote desktop viewing device that lets a user log in to another Mac elsewhere on the Internet.  It would probably have an internal Web browser as well, and some simple other features, but effectively it’s a “dumb terminal” for a more powerful computer.  And in a coup de grace Applesque way to do things, it would probably let you log into a Windows 7 computer as well (assuming you got the right drivers installed, of course).  I don’t think this is a strong possibility, as it doesn’t seem mass-market enough, but it would become a really interesting competitor to a netbook in regards to being a “disposable computer”.
  • Media Slate: So picture a device that’s sleek and sexy, can play back movies, TV shows (including live TV), Internet radio (lala), show pictures/slideshows, play simple games (app store), and be otherwise completely entertaining.  It connects from anywhere, has enough internal storage to last a nationwide flight, and is all about fun.  Further, it comes with numerous context access options, including free services, a la carte purchasing/rentals, and subscription options.  It probably also has a Webcam and native iChat support. I’m fairly bullish on this concept, as it seems to fit in with the Apple iLifestyle very well, and makes for a useful product.

Those are all good, and nice safe bets.  I don’t think I’ve hazarded guesses that others haven’t.  But now I’ll (try to) get more interesting.

  • What if the entire device were touch-sensitive? Front AND back.  Fully gesture enabled, not just multi-touch but multi-hand.  Remember, one of the things that makes tablets suck is figuring out how to hold it right – so let’s assume they “magic mouse” the whole thing, and made it smart enough to figure out the difference between the “holding hand” and the rest of it.
  • What if it’s a flexible display instead? Okay, this is probably stuck in the in my dreams category, but it would be crazy impressive if they skip the whole concept of a tablet and move the industry up a notch with a flex display.
  • What if there’s a built-in pico projector? Going on the “media slate” theory, but kicking into gear the concept of “fun for the whole family”.  Also doubles-up as a productivity device for showing presentations.

And lastly…

What if there’s no tablet?

Seriously, it’s a real possibility.  What if instead of showing us a tablet, they show a 4G iPhone and impressive updates to other devices (or not)?  What if they announce media streaming services instead?  We all know Apple plays their own game, and if they haven’t figured out how to make this thing magical, I don’t think they’d want to ship it.  It would be a bit of an odd strategy, as there seem to be a few too many pseudo-confirmed rumors, but then again, Apple doesn’t deal with terrorists rumors.  It’s a possibility…

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Posted in Gadgets, Mobile Technology | Tags: Apple, ipad, iphone, ipod, Kindle, rumors, speculating, tablet, touch, wireless | 5 Comments |

What I Saw at CES 2010

Posted on January 11, 2010 by Jeremy Toeman

To be clear up front, this is neither a “Best of” nor a “What’s Hot” type of list.  It’s literally the stuff I saw.  Further, I purposefully avoided the most popular stuff, which you can read more about here, here and here (though they somehow missed the whole 3DTV meme, which was fairly unmissable).  I unfortunately only have a few of the videos I made, as the quality was so poor, but I did get a handful of only semi-grainy Droid-cam pix.  So here are some of the things I saw, in chronological order:

Skullcandy
Saw new headphones designed by DJs for DJs.  New models at CES have the “Aviator” influence. I could so see Tom Cruise sporting these (pre-jumping the couch crazy Cruise that is):

Shure
My long-time favorite in-ear headphones have new updates shown at CES, coming later this year. Quick interview with them:

Optoma
I think a lot of the pico projector as concept.  Optoma now has 4 different models for you to consider:

Chat with Roku’s Brian Jaquet
Met up with my old Sling Media officemate, had a fun chat about convergence, new media vs TV, 3Dtv, etc.

3DTV & 3D Gaming
If you managed to get through any CES coverage without hearing about 3DTV, well… I just don’t think it was possible. Virtually every company I saw displaying any kind of TV was also showing some type of 3D demo. Personally, I’m highly skeptical of 3D for TV, but also very bullish for 3D gaming.  More to come on the topic in the next few days.

3D gaming will be hot

Funky Cases
The era of the black laptop briefcase is definitely at an end. I saw some very cool laptop cases, sleeves, backpacks, and more from a variety of companies. Here’s a shot of a laptop sleeve from Built that I really liked:

at Built cases

Additionally, there were just as many (maybe even more) cool iPhone accessories and cases (virtually none for Droid – more later). Here is Griffin’s custom iPhone case designed by Threadless (three great things that go together).

Threadless "CES Edition" Griffin iPhone case

I wasn’t able to find ANY Droid or Droid Eris accessories! I will blog about this shortly, but in a nutshell, there’s simply no “made for Droid” program. Not good. But I did find a nice screen protector from BodyGuardZ:

BodyGuardZ phone protection

Really, really, really, really thin TVs
There was a 7mm thick TV set from LG at CES this year (pictured below). It was just a prototype, but clearly an indicator of what we’ll see next year. A slightly under-hyped bit of CES 2010 was the prevalence of LED TVs, and while purists will complain on their picture quality, they were unquestionably sexy-thin.

Really really really thin TV

And if you didn’t believe me on my word alone, Peerless (one of the major players in flat panel mounts, and the brand I personally purchased) launched wall mounts for thin TVs:

Super-thin Peerless mount for your Super-thin TV

Cinq laptop monitor
I’ll blog more about these guys later this week (and I have a video interview to boot), but a company I’m on the advisory board of launched this week (disclosure: I’m on their advisory board). The product is called Cinq, it’s a portable lightweight laptop monitor. If you recall my blog posts on a dual-display laptop, this is probably the closest thing to it that’s actually coming to market.

Cinq laptop monitor

Cool booths
While they are ostentatious in virtually every way, there were some very cool booths at CES. And since the show is held in Vegas, which is ostentatious in virtually every way, I guess it’s hard to argue against it. Ideally it would be less brightly lit and more eco-friendly (considering there is a “sustainability” pavilion at the show – more below), but I don’t think that’s coming anytime soon. My favorite booth, in terms of design/presentation, was Samsung’s “kaleidoriffic” display:

Samsung booth - kaleidoriffic
Samsung booth - even more kaleidoriffic

E-readers/E-books
Another category I’m really not bullish about is e-readers. I think there’s a market for the Kindle, the possibility of an Apple device, and that’s about it – and I’m being generous. This is still a niche segment for those with a lot of disposable income, and I don’t see the mainstream (aka paperback) book-buying market investing heavily in a gadget that brings them more expensive (though cheaper than hardcover) anytime soon (especially not pre-rebound economy). However, should someone figure it by devising a new model for e-book purchasing, like say, subscription-based, I think there’s a shot. One of the readers that got people pretty excited this year comes from Plastic Logic:

Plastic Logic e-reader

Green(ish) Stuff
This is a tricky one. I’ve personally woven more sustainability into my day-to-day life, and still look for ways to improve. It’s clearly “buzzy” to be green, despite the tremendous amount of greenwashing going on. So when you’re in Vegas (a city in the middle of a desert) at CES (with huge displays on all the time) and there’s a sustainability movement, is it ironic or noble? Hard to tell. But I do applaud the numerous LED technologies, batteries, recycling, and other effort to help improve the overall consumer electronics industry. My highlight was probably a chat with the folks from Greenpeace, who also issued this year’s “Guide to Greener Electronics“:

Greenpeace Guide to Greener Electronics

More to come…
I have a lot more to say about CES 2010, the hot (and not), the trends, my predictions, etc.   Will try to get one post up per day all week with the thoughts and more.


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Posted in Gadgets | Tags: 3d gaming, 3dtv, bodyguardz, booths, brian jaquet, built, ces, CES 2010, cinq, consumer electronics show, e-book, e-reader, green, green gadgets, greenpeace, griffin, headphones, Kindle, laptop cases, LED, LG, optoma, peerless, pico projectors, plastic logic, que, roku, samsung, shure, skullcandy, sustainability, thin, threadless, wall mounts | 2 Comments |

The Third Age of Gadgets nears its end

Posted on December 28, 2009 by Jeremy Toeman

The iPad TabletMac MacTouch iSlate will supposedly launch next year, and with it comes the end of an era.  For that statement to make any sense, I should probably backtrack a bit and give a little explanation.  While considering the impact of this product (should it even exist beyond the labs in Cupertino, that is), I’ve been thinking back on the history and evolution of gadgets.  Incidentally, I’m only considering electronic gadgets, but not including computers (or laptops) nor kitchen-related items (pretty much everything in the modern kitchen is some kind of gadget).  I’ve grouped them (in my own mind) into three major phases, and in pure Tolkienish geeky wonderfulness, I’m calling them Ages.

The First Age

Definition: For sake of discussion, I’ll define the First Age of Gadgets as starting with calculators and LCD watches (and, of course, calculator watches).  Sticklers will quickly point out something I’m missing, but in my opinion that’s when the concept of “gadgets” really got kicking.  These products (1) required batteries and (2) did one thing, typically pretty well.  These early gadgets were typically fairly functional in nature, not very gimmicky or showy.  They were also workhorses as compared to modern products – you can drop most “old school” products and not fear for significant damage (probably directly related to LED or single-line LCD outputs).

Timeframe: roughly the early 1970s all the way into the 1990s. That said, many products came out in the ’90s that would still be considered First Age gadgets, per the definition above.

Defining gadget: tie between Walkman and Game Boy.  Both effectively defined a product category, and still do to this day in most respects. It’s far too easy to argue that the iPod is just a “modern” Walkman, and ditto for the DS/PSP.

Memorable gadgets: Mattel Football, Atari 2600, NES, Speak and Spell (the first DSP was inside it), the Polaroid instant camera, and HP calculators (they could graph stuff!), DiscMan (also great, but not as revolutionary as the WalkMan).

The Second Age

Definition: In a nutshell: USB connectivity and/or card reader integration. Slightly more detailed: the Second Age of gadgets is about products that were able to connect and/or share data with a computer (but did not include WiFi) and/or cell phones.  Gadgets started becoming a little more pervasive, a little more mainstream, a lot more pop culture. In addition to the gadgets themselves, the category of gadget accessories really began to boom (chargers, carrying case, rechargeable batteries, etc).  This was also the dawn of the gadget blogs. I asked Peter Rojas, founder of Gizmodo, if he could recall why he launched the site: “It was an experiment, something Nick and I started almost by accident.  I don’t think either of us thought blogging would become as big as it did. People are a LOT more interested in gadgets now than when I started Gizmodo in 2002 – it’s become part of pop culture.”

Timeframe: late 1990s to mid-2000’s.  Obviously there were definitely earlier cell phones and we still have completely disconnected gadgets coming to market today, but this is still a fairly definable time.  Interesting, I referred to this timeframe in another “look back” kind of post last year.

Defining gadget: tough call, but it’s the iPod. No other device was so utterly perfect at the concept of end-to-end interaction between the device and the computer.

Memorable gadgets: TiVo, Motorola StarTac and RAZR, PalmPilot and Palm V, Sony PlayStation, Rio mp3 players (especially the Karma), Casio Exilim and Sony U10/U20 digital cameras, Creative Nomad Jukebox, Garmin Nuvi.

The Third Age

Definition: Internet access and connectivity. Devices had either built-in Internet access, or some hybrid method of interacting with the Internet to share content, data, or services.  In many cases Third Age devices are simple evolutions to their predecessors, but some innovated distinctly enough so that there’s no blurry lines.  Just as the USB-only devices evolved to a point of wacky ideas, we’ve already seen the same thing begin to occur in the current era.

Timeframe: mid-2000’s to 2010.

Defining gadget: This is a debatable call, but I’m going to go with the BlackBerry. It truly ushered in the notion of a converged device with phone and Internet access, and was the major game changer of usage behaviors with regards to mobile devices.  Obviously the iPhone has had its own impact, but one could argue that (1) the BlackBerry is a clear success, and (2) the iPhone might never have come out without it.

Memorable gadgets: iPhone (see, it’s there!), Xbox 360, Harmony 880 remote, Slingbox (disclosure: I built it, so I’m biased, but I think it belongs on the list!), Sonos (disclosure: I have worked with Sonos in the past, but again, I think it’s hard to argue that any other product has so well integrated the Internet and personal media and home gadgets), Eye-Fi (like it or don’t, but it certainly opened new concepts), the Flip, the Kindle. Oh, and of course the Twitterpeek (just kidding).

The Fourth Age

Regardless of the iSlate, we are at the brink of a new generation of gadgets that utterly change the way we think of technology and mobility. Internet access and data synchronization/sharing will be considered ubiquitous and pervasive across new devices.  I consider gadgets like the FitBit right on the fringe of what I’m talking about – designed for a connected life, but don’t focus on a typical way of being used. My expectations for what I’m calling the Fourth Age of gadgets center around three major changes and improvements in displays, inputs, and power.

Displays: I assume we’ll be seeing flexible display surfaces (folding, roll-up, etc) that change the way we physically interact with a device.  The concept of a hard, flat screen (even a touchable one) seems very outdated to me. I think the real revolutionary tablet will be the first one with some form of flexible display (and my money’s on Apple for making this happen). I also foresee better use of microprojectors to remove the need for an on-board display at all.

Input: Next generation products should have inputs much more interesting than just a keyboard.  Let’s assume the concept of gestures is one good starting point, but it really needs to be taken further than the pinching and scrolling effect.  I’m also anticipating more use of optical recognition (like Natal uses) to simple “watch” the user control a device – gestures are even more interesting when you don’t have to touch a screen. Voice recognition and input is basically already here, but yet to be fully put to work (thanks David for that suggestion). Another is more interesting uses of accelerometers and motion sensors, where a gadget is interacted with simply by how you move it around.

Power: I consider batteries, even the most modern Li-Ion ones, one of the key deficiencies in gadget design. Batteries create massive inefficiencies in cost structure, environmental impact, and product usage. As a stopgap solution, I am a fan of the wireless charging concepts, but that’s really just a big bandaid in my opinion. We are right around the corner from making rechargeable fuel cell based devices very feasible. This is a good step, but I’m anticipating some more monumental leaps.  As per my thoughts on flexible displays, I think the materials sciences engineers out there are cooking up some very innovative solutions to make gadgets last longer, weigh less, and be notably cheaper to produce.

For a little sanity check, I asked Josh Topolsky, Editor-in-Chief of Engadget, his opinion:

“I think we’re just starting to scratch the surface of what’s possible in mobile computing (non-laptop, non-traditional computing, that is). Smartphones are in their infancy, tablets are non-existent; what we’ve seen in demos only just begins to show the potential in this space. When manufacturers can add the horsepower and bandwidth needed to those devices without sacrificing battery life or design, our perception of computing will shift dramatically. Multitouch interfaces and UI concepts that involve more than just moving boxes around on a screen will completely upend our ideas about how you interact with the machine; gadgets like the iPhone and Surface have already sparked that fire. In just a few years (say, less than five), I expect that using a laptop or desktop computer will seem quaint, or worse: antiquated.”

Personally, I’m excited about the future.  I’m just ever-so-bored of the current state of gadget affairs.  The iPhone has just sucked the life out of real innovation, and everyone’s playing a pretty boring game of catchup, with the occasional attempt to one-up Apple.  The problem is the giants of CE are acting like big sluggish organizations, and the cost structures have been prohibitive to enable startups to find easy paths to success, with few exceptions to these rules.  Hence why we in the Third Age we have One Phone to Rule Them All.  But 10 years ago we’d have bet on Sony, not Apple, to lead the revolution.  I wonder who will lead us on the road ahead (and if we’ll see it at CES 2010?).

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Posted in Gadgets | Tags: atari, batteries, blackberry, design, eye-fi, flexible displays, flip, future, gadgets, game boy, harmony, iphone, ipod, Kindle, NES, polaroid, slingbox, sonos, tablet, user interface, walkman, xbox | 7 Comments |

Where's the Kindle Used eBook Store?

Posted on May 18, 2009 by Jeremy Toeman

I’ll summarize my long-winded (but well-adorned) post on the Kindle by saying: solid device, don’t like the spending model around eBooks.  While the ultimate solution for digital music and video is obviously based around subscription businesses, it’s not so clear for books.  Fundamentally the book industry has a long way to go before it truly gets threatened by the digital book industry (though clearly they shouldn’t wait forever).

I buy a lot of used books myself (on Amazon I rarely spend more than $6, shipping included, for any given book I buy). I’ve been pondering quite a bit on how to make a “used” eBook model work, and I think for a closed system like the Kindle, it’s a real possibility.  Unlike MP3s, for example, which can be duplicated perfectly infinite times, a book “file” on the Kindle has a unique code, and all Kindles are “registered” to talk to Amazon’s servers.  In other words, there’s no such thing as a “copy”, just an individual “instance”. As a result, when a single “new copy” of an eBook is sold, it’s instance is known forever.  Therefore, just as in paper books, there are a finite number of copies in existence, although unlike paper books, Amazon knows exactly where they all are.

How it works…
So what if, after reading a book, the reader could choose to “sell it back” to Amazon?  After all, when I get a paper book I can do just that (or give it to a friend), and neither Amazon nor the publisher mind terribly that I do (otherwise the used bookstore industry would be illegal).  And what if by selling it back, the original reader could get a modest credit, say $2, for use exclusively on the Kindle store.  Not much money, but it basically implies that at $9.99 per book, you get 1 free with every 5 you buy.

By selling the book, the original reader’s Kindle deletes the file, and somewhere in the Amazon servers, one new “instance” of a “used copy” of that particular title is available for purchase. Now, some other Kindle owner can browse the title, see the used copy, and buy it.  No matter what there are no extra copies being made.  This is key, because the natural cycles of supply and demand will still force new copies to get sold. In fact, this would mimic a highly efficient economic model that does not presently exist in the Kindle landscape (where buying a popular title, say Angels and Demons, costs $7.99, whereas the used paperback is selling for $0.01).

Money stuff…
I’d price the used copy at $6.99, though obviously it could be higher or lower, but that seemed like a fair price.  Also, the “resale credit” for the used book would have to be less, call it $1 per copy.  For the last part of our system to work, Amazon would pay an additional royalty to the publisher at $3.01 per used copy (that number explained later).  As our first “why this is important” story – publishers would be generating revenue from used books, something they’ve never done before.  In fact, an individual book sale becomes a recurring revenue stream, rather than a one-off sale (nightmare for the accountants, but a plus to everyone else).

Next reason why it matters? It turns out Amazon actually loses money on every new copy sold ($3.01 per book – sound familiar?).  With the used sales, Amazon would turn a profit on a title after 2 resales ($6.99 – $3.01 to the publisher – $2 to the user = $1.98 to Amazon).  After 10 resales, both Amazon and the publisher have profited (yes, it’s all profit) an additional $20 each for the title.

But wait one second young man!
Which leaves us in the inevitable problem area of the model.  It’s that unpredictable area that makes the math a wee bit hard without more data.  The question arises: how will this impact the sales of new eBooks?  Well, no, that’s the wrong question (albeit it’s the one that would/does stop anything like this from happening).  The right question is: how will this impact the overall profitability of selling eBooks?

The important part here is: it makes no difference to the publisher!  If used sales cannibalize new sales in any way, the publisher makes the same amount of money as they did before (assuming the market size doesn’t change).  Further, the more the used sales do cannibalize from new sales, the more profitable the market is for Amazon.   For example, if a given title would sell 100K copies new on Kindle, there’s $301K in revenue to the publisher, and $301K in costs to Amazon.  If 50% of the copies were “used”, then the publisher still makes $301K, but Amazon now only loses $51500 (roughly).  Now that’s some dot-com revenue thinking for you!

amz-used-books-direct

But wait, it gets even more interesting!
Let’s pretend that due to the combination of reduced costs and users earning credits for selling the books back into the system, there’s an overall increase in purchasing.  I can’t prove it, but it sure seems likely if you think about it (or make an excel spreadsheet like I did).  If used sales bump the overall market up by 5%, the same 100K title sends an extra $7500 to the publisher and reduces Amazon’s losses by about $5000 (at the 50% cannibalization rate).  If the market bumps 20%, Amazon halves their loss, and the publisher is up a total of $30K.

amz-used-books-5

While we’re at it, if cannibalization gets to 60%, Amazon is now profiting (instead of, in case I didn’t make it very very clear, losing money every time their customer buys their product).

amz-used-books-20

Not too shabby there, Mr Toeman.
I’m sure I’m missing some details here.  There are agreements I don’t know about.  There are market sizing issues I’m unaware of.  I don’t know how price-sensitive Kindle users really are.  It might be, you know, illegal due to some nonsense in the DMCA (yeah, I’m not a fan, amazing, eh?).  Also, it’s clear that current pricing for eBooks is in flux, and who knows where things will end up.

But it sure makes sense both economically and practically speaking.  In fact it’s one of those barriers that I believe prevents wider adoption of the Kindle.  Not the lack of a used eBook section, but the inability to do something with a book once you are done with it.  I’d love to be able to “gift” an eBook to a friend once I’m done with it.  Plus I think it’s a model that just “feels right” to those of us who wouldn’t throw out money on new copies of hardcover books.  Or cars, while I’m at it, as there is no single worse use of your money than buying a new car.  Well, you could set it on fire, I suppose, but that’s just plain silly.

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Posted in General, Mobile Technology | Tags: amazon, ebooks, Kindle | 3 Comments |

Kindle Review: Good but I Prefer Books

Posted on July 16, 2008 by Jeremy Toeman

JT with Amazon KindleDespite me writing a rather scathing commentary on the Kindle when it debuted, Amazon recently sent me a loaner to try out for a couple of weeks. Without a doubt, I will say I enjoyed using the Kindle in a variety of locales, and it’s a rather well-thought-out product (more eye-catching action photos are all at the bottom of this post). I’ll also state up front I feel it’s overpriced, the content (books and blogs) are also overpriced, and I still don’t believe books are in any danger of vanishing in the short term.

Let’s start with the good. The packaging is great, it has a very “book-y” feel to it, it’s very inviting, and also looks professional enough to go along with the price of the unit. The OOBE (out of box experience) was also well done, as the first “boot” of the Kindle had a nice “Welcome Jeremy” letter from Jeff Bezos (thought I’m pretty sure it wasn’t unique). While there are a few quirks to the user interface, the learning curve was fairly close to zero, I’d be surprised to see someone needing a lot of help to get started.

Glowing KindleBrowsing the Amazon store on “Whispernet” works great, I was able to easily find numerous lists of books that were interesting to me from a variety of criteria (most popular, newest, etc). There’s a well-done integration with my Amazon.com account, so I didn’t need to register anything new to pay for titles. Also, the download speed for content (books, web pages, etc) was much better than I anticipated, definitely fast enough to provide a decent experience.

Reading books was also quite pleasant. If you’ve never seen an e-ink interface, it’s much slower than LCD (think about a second per page – it’s definitely noticeable). That’s the con, the pro is that is looks very close to paper-like and uses almost no power. I was a little disappointed that I couldn’t change the font density or size, as it used a spacing that ended up making me feel like I was reading one of my 1-year-old’s jumbo books with 3 sentences per page. There’s also no backlighting (not even Indiglo), which I think is an essential feature for a 2nd Edition.

Funky Kindle!The Kindle is fairly light, and feels nice to hold in your hands. That said, it can be awkward to hold one-handed (ex: on the bus) and I think it should have a strap on the back so you can slide your palm into it without worrying about dropping it. The buttons click well, though I feel the keyboard is in the way a lot of the time, and think it could be better suited as a slide-out or other ‘hidden’ key setup. The primary navigation wheel is nicely responsive, though definitely has oddities in the on-screen menus.

Now for my short list of problems, and they have little to do with the gadget itself. First up it’s a half-closed system. I don’t like Amazon charging for blogs I want to read, especially when they are free on every other platform possible. Secondly is the price for books themselves. While $9.99 is a bargain compared to a $19.99 (or higher) new hardcover, it’s not great relative to $6.99 and less for softcover, and laughable next to used book prices. That plus the sticker price for the device itself and we’re well beyond yuppie territory. At current pricing I’d say the product is really only for those with ready supplies of disposable income.

Kindle at Warp SpeedWhile I believe the Kindle is probably one of the better e-book readers on the market, I am still (very) squeamish about the category. While it’s nice to have the ability to have hundreds of books with you on a long trip, it’s not nice to worry about dropping a Kindle in the bathtub (or the beach, pool, forest, or basically anywhere else). As the “all the books I want” argument tends to be the big point for those in favor of e-readers, I’ve truly never known that as a real issue. I’m an avid and fairly fast book reader, and even on my three-week honeymoon I didn’t run out of books on the trip, and I wasn’t exactly overburdened in my luggage.

Some specific product recommendations for a “2nd edition“:

  • Allow me to customize the font size/weight (will really help users with poor eyesight)
  • One word: backlight
  • Redesign the front to have the keyboard hidden when not in use (slide-out?)
  • Put a strap on the back of the reader that I can slide my hand into for comfort
  • Automatically synchronize my wishlist from Amazon.com
  • Ship the Kindle with samples of books that are currently popular
  • Have the ability to auto-subscribe to certain book ‘feeds’ for sample delivery
  • Offer a subscription model for all-you-can-read pricing
  • Set a precedent with a peer-to-peer licensed and monetized “used eBook” system (use an open market for it, give a %age of the resale price back to the publisher. it’ll work, trust me)

Kindle during a lovely beach sunsetIn summary, I think the Kindle is a good product but trapped inside the wrong price points and business model around e-books. If you are like me, and buy most of your books used, it’s definitely going to seem like a ludicrously priced gadget. If, on the other hand, you buy two or more new hardcover books a month, it’s worth checking out (probably pays itself off in about a year or so). Overall the good user experience combined with the auto-download features with a huge library behind it absolutely make the Kindle a great e-reader. That said, I’m still opting for used books for my personal needs, and I’m still pretty bearish on the whole concept of e-readers.

And now… zany Kindle photos!
Le Kindle
Kindle while rollercoastering
Kindle on the Moon

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Posted in Gadgets, Product Reviews, Travel | Tags: Amazon Kindle, ebook, ereader, Kindle | 12 Comments |

About

Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

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