For Kindle 2 Review, Kindle DX Review …

Kindle’s Role as Amazon grows into NewWalMart

Before we review the kindle 2 and kindle dx’s place in Amazon’s long-term strategy, let’s take a look at some recent Amazon developments -

  1. Amazon expanded its in-house Pinzon Line to include cookware, tableware, etc. by Seattle Super-Chef Tom Douglas. They also have in-house brands for outdoor furniture (Strathwood), tools (Denali) and more.
  2. As Big Companies talk up Cloud Computing, Amazon is quietly delivering . JMP analyst Patrick Walravens writes -

    We found that Amazon Web Services offers the most competitive pricing on a dollar per virtual machine basis. Large companies have noticed and are using its Web Services cloud computing platform to host their public websites

  3. Maggie Savarino at Seattle Weekly notes that Amazon will partner with Napa’s New Vine Logistics and start selling wine to 44 states. She adds -

    If Amazon becomes a wine retailer, the company will have tremendous clout with wholesalers, able to buy wine at a discount in a quantity that makes the word “bulk” seem highly inadequate. Their selection will be unrivaled.

    In short, the plight of the independent bookseller is about to become the plight of the independent wine retailer.

Makes you wonder if Amazon is selling everything but the kitchen sink?

Actually, Amazon does sell kitchen sinks.

Everything But The .. wait a minute

Everything But The .. wait a minute

Not only is Amazon selling everything, it’s doing a stellar job -

  1. Henry Blodget points out that Amazon is growing much faster than ECommerce and Retail Sales are (one commenter even thinks this is due to the Kindle).
  2. Beacon Assets Managers agree with Cowen & Co’s Jim Friedland that Amazon is a next generation WalMart, except it performs better.

Basically, Amazon is expanding faster than the Universe (to be precise the retail universe).

How do Kindle 2 and Kindle DX come into the picture? First, let’s look at Amazon’s Google Tax.

Search Google.com for ‘kindle’ and you find -

  1. Ads by Sony and BeBook.
  2. 3 links and 1 photo in the ‘News for kindle’ links before the Amazon Kindle pages.
  3. 2 separate video results above the fold.
  4. 4 image results above the fold.

In fact, there are 50+ different links on that SERP page of which only 2 go directly to Amazon. Its the same or worse for every product Amazon sells.

Online, Amazon has to pay a tax of sorts to Google - 

  1. Amazon often has to pay for traffic and that takes away from customers’ savings and Amazon’s profits.
  2. It often loses traffic to competitors or other sites.  
  3. Add on the fact that Google is jumping into ebooks itself and has Google Books and Froogle.
  4. Further add on Google’s pattern of attacking every big tech company it can find (today’s launch of the Google Chrome OS for example).

In mobile, and with Kindle, there is no Google Tax.

Any mobile device is new to the point that there is no Google Tax yet. The Kindle is even better as not only is it tax-free it can be kept google free.

Amazon’s strategy to ensure it becomes the New WalMart is to create tax-free channels on every mobile device -

  1. Amazon recently indicated that the Amazon API isn’t supposed to be used in mobile or handheld devices without Amazon’s permission. 
  2. The policy clearly indicates Amazon is very concerned about a 3rd party developer grabbing a large chunk of Amazon sales via the iPhone (or worse via the Kindle).
  3. Kindle for iPhone users are redirected to the iPhone browser to make purchases (thereby bypassing Apple’s 30% tax).

Basically, Amazon realizes that it can’t serve customers (or itself) if it’s paying all sorts of ridiculous taxes – 30% to Apple, x% to Google, and so forth.

  1. Amazon intends to be the New WalMart, and make 10 cents on every online and mobile dollar.
  2. It has no desire to share half of that with Google or 30% of it with Apple.

Just as Google is trying to free itself of the huge shadow of Windows and Internet Explorer, Amazon is trying to free itself of the huge shadow of Google Search. 

Mobile devices in general, and the Kindle and the Kindle DX in particular, are Amazon’s solution to the Google Tax.

Kindle Sheet Music

The Official Kindle Blog announced the addition of Kindle Sheet Music to the Kindle Store (as did a Press Release from Novato Music Press, the sheet music company) -

Press Release: FreeHand Systems announces that its Novato Music Press catalog, consisting of over 20,000 classical, traditional and American music titles, is now available for Amazon Kindle.

Kindle Blog: Major composers such as J. S. Bach, Mozart, and Beethoven are well-represented, but the collection also contains traditional songs and works from popular songwriters like Stephen Foster and George M. Cohan, along with rare, but important works by minor composers, including Bredon Hill by George Butterworth, and Scott Joplin’s Treemonisha.

The sheet music will obviously be better suited to the Kindle DX (all copies of Sheet Music have an Optimized for Kindle DX tag). 

However, lets review how the Kindle 2 handles sheet music, especially now that its just $299 -

  1. The default size was on the small side. My eyesight is pretty good and it was still a bit uncomfortable.
  2. You can zoom into any page as every page is an image. It then becomes quite comfortable to read. 
  3. As far as actual use, if your eyesight is not very good, the delay between flipping pages and the fact that you have to zoom in to get a larger size makes the Kindle 2 quite unsuited for sheet music. Just my opinion.
  4. $2.39 for the 12 pages of sheet music in the Barber of Seville seems steep.
  5. The Kindle DX with its larger screen would be much better suited for sheet music. Plus you get landscape mode for an even bigger font size.
  6. Could not figure out whether changing font size had any impact. As every page is an image it seems the only way to increase the size is by zooming in.
  7. Flipping pages takes .5 second or so. Definitely less than a second.

You can also look at some Kindle Sheet Music images on the Kindle Photo page that show what the default and zoomed in sizes look like when compared with print in a trade paperback.

The review of the kindle 2 for using sheet music would be -

  1. B grade and usable if you have good eyesight.
  2. Unusable otherwise. Its just not possible to flip the page (which takes .5 second or so) and also zoom the page to larger size while maintaining flow.

$299 Kindle – Amazon selling $299 Kindle 2

We now have a $299 Kindle – Amazon has cut the Kindle 2 price to $299. The Kindle DX is still $489 so the $299 kindle 2 seems to be economies of scale rather than marketing strategy.

Kindle $299

Kindle $299

Great Move by Amazon!

$299 Kindle – What does it mean?

  1. Amazon is beginning to achieve economies of scale. A $60 price cut is pretty impressive.
  2. Amazon is passing on savings to the customer.  
  3. Kindle 2 at $299 becomes very compelling for anyone on the fence.

Kindle 2 at $299 – Will Kindle DX see a price cut?

  1. It might – It’s not a given though because the Kindle DX obviously hasn’t seen the economies of scale that Kindle 2 has. 
  2. If we assume the same 5-6 month delay before a price-cut that both Kindle 1 and Kindle 2 saw, that would mean a Kindle DX price-cut in October.

Kindle at $299 – Clear #1 Choice

Even before the price-cut the Kindle 2 was the best eReader on the market. The $299 Kindle 2 just blows the competition out of the water.

If you’re a new eReader trying to take on Kindle and Sony Reader, suddenly your $250 price-point looks a lot less appealing.

The $299 Kindle will greatly ramp up sales

Every hundred figure is a psychological barrier. A Lot of people were fixated on how there ought to be a sub $300 price and now they’ve got it.

Also, a $299 Kindle 2 compares better with a lot of other price points -

  1. $399 netbooks. 
  2. $99 to $689 cellphones.
  3. $299 cameras.

What’s behind the $299 Kindle?

The $99 iPhone and differentiating from the Kindle DX – that’s my gut feeling.

You suddenly see people looking at lowered prices of the iPhone and in this economic climate it makes everyone just that much more inclined to buy something that seems a bit cheaper than before.

As far as the Kindle DX – the price difference was something of an impediment – it made the value proposition too close. The $299 Kindle 2 becomes a clear #1 choice now (even if the dx weren’t out of stock).

What if you just bought a $359 Kindle 2?

If it was in the last 30 days you can get a $60 refund by calling up Kindle Customer service -

6 a.m. to 10 p.m. Pacific Time, seven days a week. You can also reach us by calling one of these numbers: Inside the United States: 1-866-321-8851; Outside the United States: 1-206-266-0927.

Or go to this page and click the ‘Contact Us’ button to have them call you back.

Closing Thoughts – $299 Kindle 2

Any way you look at it, a lower priced kindle is a boon for reading, ebooks, and Amazon. The new $299 kindle price will make it accessible to a lot more people and will further accelerate the spread of ebooks.

Kudos to Amazon for a $299 kindle 2 price less than 5 months after its release.

dx reviews review

There are now 244 dx reviews from actual owners at Amazon. To get a better picture of how owners like their Kindle DX, I went through every dx review and this post is the result.

If you prefer, You can look at a full kindle dx review. Else, lets proceed -

DX Review – Number of DX Reviews per Day

Gives a good idea of what DX supply looks like, given that supply is currently the constricting factor -

DX Review Rate - DX Reviews per Day

DX Review Rate - DX Reviews per Day

You’ll see that there are two distinct peaks and one trough -

  1. Peak when the DX first came out.
  2. Peak around July 4th. This could just be a lot of people finding time during the long weekend to review the dx.
  3. The trough stretches throughout – June 25th is when dx delays shot up to 4-6 weeks. 

Graph is courtesy NCES Graph Utility.

DX Review – Ratings from Owners

We’d covered dx review statistics before and had found this distribution amongst the first 100 legitimate dx reviews -

  1. 5 star DX review: 48 owners.
  2. 4 star DX review: 27 owners.
  3. 3 star DX review: 18 owners.
  4. 2 star Review: 3 owners.
  5. 1 star Review: 4 owners.

That translates to a 4.12 stars average on 100 reviews.

The current distribution, among the first 241 legitimate dx reviews, comes out to be -

  1. 5 star dx review: 122.
  2. 4 star review: 63.
  3. 3 star dx reviews: 38. 
  4. 2 star dx reviews: 8.
  5. 1 star dx review: 13.

Across 244 dx reviews, the average rating is 4.1188. That’s almost exactly the rating after the 100th dx review.

DX Review Insights

  1. The pace of people adding dx reviews is 244 over 26 days, which equates to 9.4 dx reviews per day.
  2. As a comparison, the Kindle 2 has 4,678 reviews over 133 days. That’s 35.2 reviews per day. Almost 4 times the rate of the dx.
  3. Assuming 1 out of 100 dx owners adds a review, that’s 940 dx kindles being shipped out per day.
  4. Perhaps the ratio is more, perhaps less.

An average rating of 4.2 stars out of 5 is pretty favorable (and it’s been around that mark consistently). After reviewing every legitimate dx review, it seems that supply problems are really holding back the dx.

Kindle DX & Ongoing demise of newspapers

The Kindle DX or Plastic Logic’s eReader might be the savior of newspapers – However, there might not be much left to save. Let’s look at the rapidly accelerating demise of newspapers -

Advertising Sales are falling precipitously

Newsosaur (excellent blog) points out that advertising sales fell by an unprecedented 28.3% in 2009’s first 3 months. Furthermore -

  1. Online sales fell 13.4%. 
  2. Classifieds fell 42.3%. 
  3. Employment Classified Advertising fell 67.4%.
  4. Newspapers Sales have been falling since April 2006, and the rate is accelerating.

Newspapers themselves are dying

Preethi Dumpala at Silicon Alley Investor has an excellent article up titled ‘The Year the Newspaper Died’ that points out that in 2009 we already have -

  1. 105 newspapers shuttered.
  2. 10,000 newspaper jobs lost.
  3. 23 of the top 25 newspapers’ circulation declined 7% to 20% (Interestingly, WSJ saw an increase).

 For a really in-depth view, take a look at paper cuts, a site that shows you -

  1. All newspaper lay-offs in google maps.
  2. All newspapers that have closed (also in google maps).
  3. Newspapers that have switched to online versions (just 8 so far)
  4. News, rumors and 2007 and 2008 maps.

They actually list 10,293+ jobs lost in the first 6 months of 2009.

Enter Kindle DX, Plastic Logic eReader, iPhone

An ereader like the Kindle DX does a few important things -

  1. It functions as a channel where people are used to paying for content.  
  2. It allows newspapers to solve the ‘immediacy of news’ problem by offering news as it happens.  
  3. It greatly reduces distribution costs.

The newspaper moguls complaining about having to give Amazon 70% ought to just pick another device, and it’d help if they stopped giving away their content for free online and on the iPhone.

Newspapers still have the content and the brand

Online, Content is King. Reputation is nearly as important. Newspapers have heaps of both.

Take a look at Google itself – all their ads surround the content sites. People wouldn’t visit if the sites that provide content weren’t there. Neither would people visit as much if they didn’t believe the whole ‘Do No Evil’ branding.

Channels like the Internet, the Kindle, iPhones, and cellphones give newspapers the ability to morph into entities that provide better news. They have the opportunity to -

  1. Provide better news. 
  2. Provide better news instantaneously. 
  3. Make prices lower for customers. 
  4. Cut costs by doing things more efficiently and with less people.
  5. Stop running ads that manipulate customers.
  6. Focus on providing information on products their customers are already interested in.

Instead, newspapers are focusing on profits, the unfulfilled promise of online advertising, and forgetting customers.

Newspapers need to forget Advertising

Advertising to support newspaper costs isn’t a great idea. The Internet is creating an environment where customers are no longer sheep.

Advertising and manipulation doesn’t really work with informed customers. Read Jakob Nielsen’s post on Banner Blindness which points out that the only way to get Internet users to click on ads is to pretend the ads are content -

Users almost never look at anything that looks like an advertisement, whether or not it’s actually an ad.

…. we discovered a fourth approach that breaks one of publishing’s main ethical principles by making the ad look like content:

  • The more an ad looks like a native site component, the more users will look at it.
  • Not only should the ad look like the site’s other design elements, it should appear to be part of the specific page section in which it’s displayed.

Not even the most popular sites like YouTube and Facebook are being able to get online ads to work. Do newspapers really think they can succeed where the best online companies are failing?

Is there a solution? Is the Kindle DX part of it?

  1. For the newspaper industry to support its current structure and size – No.
  2. For a more efficient newspapers industry that stops buying the mantra of ‘give it away for free, and make money off of ads’ – Yes.

Newspapers need to do a few things at the same time -

  1. Minimize the cost of producing and distributing quality content, without reducing the quality.  
  2. Charge at least as much as it costs to create the news.
  3. Put their customers first.
  4. Treat everything except the news product as an enabler, and not as some critical part of their DNA they cannot live without.

The Kindle DX or PL eReader or any other device or technology can’t help newspapers as long as they keep devaluing their own worth and putting customers last.