Why is Kindle DX so expensive?

Kindle DX is really expensive. Think about this for a second -

  1. Kindle WiFi is $65. Nook Simple Touch is $79. Nook Simple Touch is on sale in the UK for 29 pounds. Both Kindle WiFi and Nook Simpl Touch have eInk Pearl screens – same as Kindle DX.
  2. Kindle WiFi and Nook Simple Touch have 800 by 600 screen resolution with 167 pixels per inch.
  3. Kindle DX has the same eInk Pearl screen, just in a bigger 9.7″ size. It has 1200 x 824 screen resolution with 150 pixels per inch (so it’s not like it has HD resolution or anything). It doesn’t have a touch screen. It’s $299.

How strange is that.

You’re getting a bigger screen (2.5 times the screen area). However, you’re getting lower pixel density. You are getting the same 2-year-old eInk Pearl screen. You are not getting a touch screen.

Instead of $69*2 ($138) or even $79*2 ($158), you’re expected to pay $299? That’s nearly 5 times the price of the Kindle WiFi. That’s nearly 4 times the price of the Nook Simple Touch which also has a touch screen.

Why is Kindle DX so expensive?

What does Kindle DX offer that makes it so much more expensive?

  1. The 9.7″ screen is probably double the price of the Kindle WiFi. If the Kindle WiFi screen costs $30 to $40, then the Kindle DX screen shouldn’t be more than $60 to $80.
  2. There’s 4 GB RAM. Can’t be very expensive. Perhaps $20 to $30.
  3. The processor has to be a bit faster to support the larger screen. We know the screen isn’t very snappy, so the processor can’t be that much faster.
  4. There’s a 3G modem. Perhaps $25 to $35 for that.
  5. A power charger is included. Perhaps it costs $5 to $10 to make.

So we’re talking about $155. Perhaps another $15. That’s $170.

Where is the other $129?

Additionally, and this is the real question, if Kindle WiFi can be just $69, and Nook Simple Touch with a touchscreen can be just $79, then why does Kindle DX have to be $299.

Something’s wrong for Kindle DX to be $299

Something has to be very wrong for Kindle DX to still be priced at $299 -

  1. Kobo Aura HD is $169 with a HD eInk screen. Are we to believe that the Kindle DX screen costs more than a HD screen? $130 more?
  2. Kindle DX has components that are all 2 years old. Everything – the processor, the memory, the storage. Surely, prices must have gone down since then.
  3. Every other Kindle has seen prices drop massively within 1-2 years of release. Kindle DX is still being sold for close to its launch price. Why?
  4. Kindle DX has the exact same features as at launch. It has 2-3 weeks battery life while the other Kindles have moved to 1-2 months. Magically, the price hasn’t been reduced.

If Kindle WiFi is $69, then the logical price range for Kindle DX is between $120 and $170. Why is it at a ridiculously high $299?

Is Amazon incredibly inefficient? Is Amazon just taking advantage of people who want a large screen eReader?

There are a few possibilities -

  1. The same company that can make a 6″ Kindle WiFi for $69 can’t bring the price of the Kindle DX below $299. For some reason, when it comes to large-screen eReaders, Amazon is incredibly inefficient.
  2. Amazon knows that there is zero competition in the 9.7″ eInk eReader market and is making the most of it.
  3. Amazon has a huge stockpile of unsold Kindle DXes. It’s selling these off. It would rather sell them slowly than take a loss.
  4. Kindle DX sold in extremely small numbers. As a result, the 9.7″ screen never hit economies of scale and is incredibly expensive ($150? $125?). That makes Kindle DX impossible to make and sell for less than $299.
  5. Amazon thinks of the Kindle DX as the luxury model. It’s quite possible. If we look at the $499 Kindle Fire HD 8.9″ LTE, which is now $399, Amazon tried the ‘luxury model’ approach there too. It’s very strange but perhaps Amazon truly does believe you can sell an economy model as a luxury model just by pretending it’s ‘luxury’ level of quality.

Kindle DX is about double the price it should be. Apart from the large screen and the 3G, it has nothing going for it. It’s 2 years old. All the components are 2 years old. The screen is 2 years old. Not sure what Amazon is thinking. Would love to know exactly why Kindle DX is so expensive.

Kindle DX back from the dead

Kindle DX is back from the dead.

Amazon’s making all sorts of strange Kindle moves recently. Kindle Keyboard disappeared. Kindle DX is back.

Thanks to The Verge for the news of Kindle DX being back (in graphite, not black).

Here’s a quick refresher -

  1. Kindle DX was Amazon’s large screen Kindle. The screen is 9.7″.
  2. Kindle DX has the same eInk screen as Kindle 3 did – eInk Pearl. It’s not as good as the Kindle Paperwhite screen, and there’s no built-in light.
  3. The current version of Kindle DX being sold is actually Kindle DX 2, referred to as Kindle DX Graphite.
  4. The larger screen is slower to respond. So if you like snappy you might want to give it a skip.
  5. You can check out our Kindle DX 2 Review and our Kindle DX 2 Review Video for more details.
  6. Kindle DX is the only large screen eReader, based on eInk, available from the top 4 eReader companies (Kindle, Nook, Kobo, Sony).
  7. The 9.7″ screen translates to 2.5 times the screen real estate of 6″ Kindles.
  8. The current price of $299 is still on the high side.
  9. Kindle DX International – Kindle DX does ship outside the US.
  10. You get all the same services and benefits as with regular Kindles. There is also a keyboard (albeit a very poorly constructed one, with tiny buttons and no number keys (press Alt for numbers)).
  11. You do get free 3G wireless. Not sure if this extends to Internet. It definitely extends to browsing books and book downloads.

All in all, it’s a very interesting move.

Why is Amazon bringing back Kindle DX 2?

Amazon had ended Kindle DX quite a while ago. That rules out the possibility of this being left over stock. So the following possibilities come up -

  1. Amazon saw consistent demand for Kindle DX 2. This is quite possible as DX 2 was great for people with weak vision who wanted a larger screen size, and also wanted eInk. Kindle DX 2 was also good for people who wanted to read PDFs. The PDF support was spotty but for reading PDFs that worked on it, it worked well.
  2. Amazon has a new Kindle DX 3 planned. It’s started selling Kindle DX 2 again to gauge demand.
  3. Amazon wants to ramp up production of 9.7″ eInk screens for a dual screen LCD+eInk device. Selling Kindle DX 2 again allows for that.
  4. Amazon decided to bring back the Kindle DX 2 to fill the hole in its lineup i.e. no large screen eInk eReader.
  5. No good reason at all. Just an experiment.

The more we think about it, the stranger it seems. To bring back a product that you had ended, and which had not sold very well.

At the same time, Amazon has ended Kindle Keyboard, which was an eReader which had lots of demand (since it was the only eReader with a keyboard).

Don’t understand this move at all. It’s good to see Kindle DX back from the dead. Just not sure why or how it’s back.

$259 Kindle DX Thanksgiving Kindle Sale

The Kindle DX is now $259. This is the Kindle DX 2 – the one with the eInk Pearl screen and graphite casing.

You can see my Kindle DX 2 Videos to get a better idea of what you’ll be getting.

Main advantages – eInk Pearl screen, much larger 9.7″ screen, all the Kindle ecosystem benefits, syncs with Kindle Apps and other Kindles. The product page lists all the benefits.

Main disadvantages – Kindle DX hasn’t been getting any software updates, the size is a bit unwieldy, the weight is a bit much, its not a latest generation Kindle, no touch, PDF support is not that good.

$299 Kindle DX Sale

Amazon is having a $299 Kindle DX sale today. The sale is on the Kindle DX 2 which has the eInk Pearl screen.

$299 is quite a good price – It amounts to a $80 saving on the regular price. It doesn’t make the Kindle DX a steal, but it certainly puts it into the ‘decent value for money’ category.

Here’s more on the Kindle DX 2 -

  1. Kindle DX 2 Photos
  2. Kindle DX 2 Video.

Pros & Cons of the Kindle DX 2

There are quite a few pros -

  1. Large 9.7″ screen.
  2. eInk Pearl screen which is great for reading and readable in bright sunlight.
  3. Good Battery Life – 2 to 3 weeks with wireless off and 7 days with wireless on. 
  4. The larger screen makes it better for reading PDFs and websites. 
  5. Free 3G wireless which covers store browsing,downloading books you buy, and browsing the Internet via a basic web browser.
  6. Free wireless in 100+ countries. Please note that this global wireless feature is available only for US customers.
  7. Accelerometer.
  8. Text to Speech.
  9. Super Size Fonts.
  10. The Kindle Store – the best range of new books and the best prices (except for Agency Model books which are the same price everywhere).

There are also quite a few cons -

  1. The Kindle DX 2 doesn’t have a lot of the physical upgrades the Kindle 3 and Kindle WiFi have – It’s missing WiFi, the month-long battery life is missing, and there is no secret built-in microphone.
  2. Kindle DX 2 is also missing a lot of the software improvements/additions the Kindle 3 and Kindle WiFi have including Voice Guide, PDF reader improvements (notes etc.), and the new web browser. 
  3. It’s quite heavy. It weighs 18.9 ounces which means you can’t really hold it in your hands for too long before your arms get tired.
  4. It’s a bit awkward. The awkwardness is due to the size – 10.4″ by 7.2″ by 0.38″. The thinness is impressive but the large width and height make the Kindle DX 2 difficult to hold and carry.
  5. Value for Money isn’t as good as the Kindle WiFi – even at the $299 price.
  6. No support for ePub or library books.
  7. Publishers have control over whether Text to Speech and Lending are enabled for a book.

At $299 the Kindle DX is a good option if you’re looking for a large-screen reading device. However, it’s not yet an absolute must-get.

Why isn’t there a Kindle DX competitor?

Let’s talk about dedicated reading devices with large screens. There aren’t any except the Kindle DX.

Let’s see what we have -

  1. Kindle DX and Kindle DX 2.
  2. Nothing from B&N.
  3. Nothing from Sony. The 7″ screen Daily Edition doesn’t qualify. 
  4. A dual screen Tablet from Entourage Edge that is more Tablet than eReader.
  5. Nothing else from any big company.

We’re not counting the iPad as it’s not a dedicated eReader.

Large screen eReaders we would have had which either got delayed or got cancelled -

  1. Skiff was going to release a very large screen dedicated reading device but it’s either cancelled or postponed.  
  2. Plastic Logic has delayed the Que ProReader.
  3. Fujitsu’s large screen color eReader hasn’t been released outside Japan.
  4. The Pixel Qi magic screen powered dual-mode Tablets aren’t out yet – Actually, Notion Ink’s Adam has been delayed.
  5. There have been a bunch of companies showing off large ePaper screens but none of them have made it into any actual eReaders.

All of this brings us to an interesting question.

Why are there no Kindle DX competitors?

Let’s explore the possibilities -

  1. Perhaps the Kindle DX is hard to compete against. Well, that’s a little hard to believe. The Kindle DX 2 doesn’t have any killer features other than the eInk Pearl screen and at $379 there’s lots of room. It’s not like the $139 Kindle WiFi where the smaller companies just can’t compete.
  2. Perhaps the larger 9.7″ screen is very expensive. There’s a slight possibility that this is indeed the case. It would mean that any company competing against the Kindle DX would have to come in around the same price and beat the Kindle DX on other areas. Not a very easy thing to do.
  3. There isn’t enough supply of the 9.7″ screens. There might be some truth to this.  
  4. The market for large screen eReaders isn’t very big. Perhaps a lot of companies feel large screen eReaders start competing with tablets and become too expensive and that the market for a $400, large screen, dedicated reading device is very small. This is quite possible.
  5. The risk is too high. It could be that the amount of investment required to create and release a large screen eReader is very high. There are larger costs for everything  – screen, components, shipping, storage. Combine this high cost with a competitor like Amazon and the possibility that the market size is rather small and it becomes too risky to release a large screen eReader.

The 4th and 5th points are probably the big ones. Let’s dive deeper into these.

Is there a market for a large screen eReader?

First, let’s consider what a large screen reading device would be used for – reading and browsing websites, reading newspapers, reading magazines, textbooks, perhaps comics and graphic novels.

In each case eInk makes the reading great and everything else terrible. The slow refresh speed of eInk, the lack of color, and the lack of evolution in general means that LCD screen devices are much better suited for the non black and white text components of these pursuits.

Please Note: We’re assuming that the 6″ eReaders have large enough screens for reading books.

It’s quite remarkable that eInk seems almost perfectly suited for only one activity – reading books.

Let’s say the market for people who want a device to read online articles, magazines, textbooks, and comics and who are willing to pay $400 to $500 is 20 million people a year. A large screen dedicated eReader would be competing against tablets of all sorts, netbooks, rival ePaper technologies, and smaller screen eReaders. There doesn’t really seem to be a big, huge market for a large screen dedicated reading device.

If eReaders get adopted in education because they are less distracting than multi-purpose devices then we have a huge market – However, that’s not very likely. The most likely outcome is that we’re looking at a 5 million devices a year market as long as the price is around $400.

What’s the risk to reward ratio for bringing a large screen eReader to market?

We have a market of around 5 million units a year. Let’s see all the risk involved -

  1. You have to put in a lot of investment to come up with a large screen eReader (same as for any new product).
  2. You have to negotiate screen supply with eInk and components from other vendors. There are probably contracts and minimum purchase agreements involved.
  3. If you don’t get the #1 spot your sales are 2 million units a year or less. 
  4. You’re aware that Tablets are going to get cheaper and cheaper so you must have a plan to cut prices yourself.
  5. Amazon might decide to start taking a loss. 
  6. Since you’re marketing the device to demographics that either don’t have money (students) or have lots of options (sources for textbooks and newspapers, piracy) you might not have a long-term revenue stream.
  7. The risk of accidents and failures is much higher – The yield for large screens is usually a lot less than for smaller screens, larger eReaders will be tougher to store and ship, and the cost to users if they break an eReader is much higher for large screen eReaders.

The last point brings up something interesting – Not only are the risks high for manufacturers the risks are higher for customers too. This risk adds to the high price and further narrows the market.

The reward just isn’t there

Let’s assume a company risks all of this and becomes a success and is selling 3 million large screen eReaders a year. It’s selling them for $400 and after everything is said and done it’s making $50 profit per eReader. That’s $150 million in profit a year.  We’ve already talked about there not being another revenue stream (since there is so much competition and so much piracy). So $150 million profit a year is all we have.

This might seem like a lot. However, contrast this against the investment required and the risks.

Perhaps $50 million in investment to get everything set up and bring the large screen eReader to market. All the risk factors we’ve discussed above. The big giants i.e. Apple and Amazon, will definitely attack your market share. Companies will try to take over your device and probably kill any possibility of creating a second revenue stream from sales of books and newspapers.

Investing $50 million, figuring out all the agreements and nuances, and fighting this grand war with Apple and Amazon in return for a 10% chance of a $150 million a year profit stream isn’t very enticing. It’s even less enticing when you realize that even if you get to the $150 million a year profit stream Amazon will take a loss to cut into it and Apple will keep trying to steal away the most profitable part of your customer base.

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