Kindle DX and Value for Money

Addressed this to an extent in the Kindle DX Review 2010 post. However, it merits a post of its own as it’s a very nuanced subject.

What value does the Kindle DX provide?

Let’s start with the value that the Kindle DX provides -

  1. A 9.7″ eInk screen which provides as much space for words as a hardcover.
  2. An eInk screen that is great for reading and easy on the eyes. 
  3. Access to the Kindle Store – the widest range of new books, the best prices on books (except for Agency Model books which are priced the same everywhere). 
  4. Access to the Kindle Platform and Whispernet – which means 60 second downloads, free Internet and Wikipedia in over 100 countries, your notes and books are backed-up in the Cloud, your place in the book and notes and highlights and bookmarks are synchronized across your Kindles and Kindle Apps, and you get access to other features.  
  5. Great re-sale value. Used Kindle DXes are going for $415 (though they might drop as refurbished Kindle DXes are now $399 and $349. Used Kindle DXes of the US only variety are going for $374 (these prices should drop too).
  6. Amazon keeps adding updates and adding to the value of the Kindle DX. Additions have included better battery life and the upcoming Kindle 2.5 update will add folders and social features.  
  7. Lots of font options including 2 new font sizes debuting in the Kindle 2.5 update. 
  8. Accelerometer powered screen rotation.
  9. Access to all the Kindle Apps – Read your Kindle books across most of your devices including PC, Mac, iPhone, iPad, and Blackberry.

The amount of value provided is very high and Amazon keep adding to the value proposition. The question is whether this amount of value justifies the price of the Kindle DX.

Is the Kindle DX worth $489?

In my Kindle DX Review, 2010 edition, gave the Kindle DX only a 5 on 10 on value for money and there are three main reasons for this -

  1. The Kindle DX has not seen a price cut since its release in mid 2009. More on this in the next section. 
  2. The Kindle 2 at $189 provides a lot more value for money. The iPad at $499 also provides more value for money though it isn’t optimized for reading and thus caters to a different audience.
  3. Kindle DX is priced for perfection – yet it isn’t perfect. Take the stunted keyboard for example – Paying $489 for a device ought to mean that the keyboard is a work of art. The Kindle DX got a 7.75 stars out of 10 rating which suggests a price closer to $350 (at most $375) would be appropriate.

While Amazon has cut the price of the Kindle 2 relentlessly and improved the Kindle service and platform and software continuously the Kindle DX has only seen the latter set of improvements – it hasn’t benefited from any price cuts and thus the value for money it provides doesn’t compare with the Kindle 2.

No, the Kindle DX is not worth $489. It wasn’t worth that much to begin with and the price definitely should have come down with time.

Why has the Kindle DX’s price not come down from its initial price of $489?

There are a lot of possibilities here.

The major one is that not enough Kindle DXes have been sold to hit economies of scale. Last year a rough analysis had shown that there are probably 4 to 5 Kindle 2s being sold for every Kindle DX. This year, looking at reviews, you might surmise that the ratio is closer to 9:1 or 10:1 and you might not be far off.  

If there are millions of Kindle selling there might be only hundreds of thousands of Kindle DXes selling and that would mean eInk and Amazon haven’t hit the economies of scale that would allow them to cut the price by $100 to $150.

A very rough ratio is 1 review per 100 devices sold and by that measure there ought to be 161,000 Kindle DXes in circulation. Definitely not enough to result in a large cut in prices. It’s also worth keeping in mind that with larger screens the probability of failures goes up drastically. The Kindle DX screen provides 2.5 times the screen area of the Kindle screen and the ratio of screen prices might be that or even higher.

There are a few other possibilities -

  1. Amazon want to keep a high-end model. Position it as the luxury eReader. 
  2. Amazon want to build a textbook eReader at that price point and don’t want to train users to expect a $300 textbook eReader.
  3. This is the model on which Amazon make profits and compensate for lower profits on the Kindle 2.  

These are all guesses though – the only logical reason for the higher price of the Kindle DX is that the screen and components are more expensive. Amazon is not a company scared of cutting product prices.

Are the Refurbished Kindle DXes better value for money?

Yes and No.

  1. At $399 the Refurbished Kindle DX is still not adequate value for money. It is, however, a slightly better option than buying a new Kindle DX. 
  2. At $349 the refurbished Kindle DX US is good value for money. Of course, if you travel outside the US then it won’t fit your needs.

So the move by Amazon to introduce refurbished kindle dx options is a very good one. Here are the prices they should consider -

  • $369 for a new Kindle DX.
  • $329 for a refurbished Kindle DX. They are at $399 now which is an improvement over $399.
  • $299 or $319 for a refurbished Kindle DX US. They are at $349 now so not far off.

Of course, my analysis might be grossly underestimating the price of the Kindle DX components, especially the screen, and there isn’t any large screen eReader that has come in at a reasonable price. Perhaps a lot of the blame goes to eInk. Truth is eReaders are competing with LCD screens and if they can’t get eInk prices down they need to go with new technology like Mirasol or Pixel Qi.

5 Responses

  1. The Kindle DX has not seen a price cut since its release in mid 2010. More on this in the next section.

    I think you were going for mid 2009 there.

  2. Why do you do so much speculative analysis? I don’t understand the use of such analysis. If you don’t have any market data or data from amazon, how can you present solid analysis.

    • Because I want to. It’s not about providing perfect analysis – because no such thing exists. Given the data available it’s worth speculating.

      • Well said “because I want to!” Its teh only reason for blogging (not journalism). Your speculations are great and certainly make me think cause and effect – keep up the great blogging.

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