Phoenix
August is high season for bed and breakfasting in California. Presumably this holds true across the many other regions where the cozy Inn is a dominant form of lodging. I dithered on booking a last minute B&B weekend and the intended destination filled up. Luckily we were able to find a suitably charming place to stay in the Mountains that still had an open room. It even had hammocks.
My wife has a first generation Kindle. When reading in public, it is not uncommon for her to be approached by someone who is considering a Kindle purchase or who is waiting for their kindle to be delivered. As you can imagine, people at a Southern California B&B during summer reading season are a demographic match for prospective kindle owners.
On Sunday morning after breakfast we heard the familiar words, “Is that a Kindle?” One of the proprietors walked over and started telling us about the pair of Kindles that they had ordered and were due to be shipped in twelve days. He had seen Jeff Bezos’ announcement of the third generation Kindle on Charlie Rose. Bezos has mastered the art of speaking to the heart of people who love books to an even greater extent than Steve Job’s has leveraged black turtlenecks to enrapture those who burn for operating systems with transparency effects.
The $139 price point of the wifi only model is key. It allows two of them to be purchased for less than $300. Thus, a pair of avid readers can ditch their mountains of books and share their digital library together. The higher price point put a dual purchase into a difficult mental cost space, but e-readers are a natural multiple purchase. I’m sure that you would not be surprised to find that many avid readers live with others that like to read the same things they do.
That $139 will also mark down nicely to $99 Christmas 2011 when the screen costs a little bit less for E Ink to manufacture.
As I mentioned previously, the Kindle is about creating a viable market for e-books because no one else was doing it right. The wifi only model of the Kindle 3 is the baseline around which the commoditized dedicated digital reading device market will form. This is the feature set and form factor that you will see in every generic e-reader for the next five years, maybe longer.
Amazon will make it’s next big move after it has reaped a holiday sales triumph at the $99 price point next year. Just as you can currently read your Kindle books on your iPad, iPhone, Blackberry, android, PC, and Mac, you will be able to read your Kindle books on other e-readers. A two pronged attack makes sense. First, Amazon will make an e-reader optimized Android app so that all of the Android based e-readers which allow apps to be downloaded will stop using the smart phone optimized app that people will have been using. Next, Amazon will license the Kindle operating system to e-reader manufacturers.
Amazon’s game plan is to have established a dominant enough position in the electronic book retailing space by the time the devices are commoditized that they will be able to pry compelling DRM and pricing concessions from publishers. Kindle will entrench it’s transformation from a device to a platform, and then it will undergo a further transformation to a format.
The only question is how tightly Amazon will keep control. I think that it will be in Amazon’s best interest to set Kindle free once it has penetrated enough devices and book buyers. Once Amazon has given the world a fully formed, hardware independent, ubiquitous, digital book retailing standard; it will be able to go back to competing as the best bookstore in the world.
