I'm currently listening to Amazon.com's Founder, Jeff Bezos, speak about the Kindle. It's a glorified advertisement. I have never heard Bezos speak, and was struck how much he sounds like Keanu Reeves from Bill & Ted's Excellent Adventure. He's sold on the electronic book format and thinks we should be too.
I had long wondered why the Kindle was so darn expensive. He explained that the 3G wireless computer inside is to blame. That's why Amazon demands $359 to $489 for it. That's quite an investment to read some books, which you still have to pay around $10 each for. But he compares it to a cell phone without a contract. Rather than ask consumers pay for a monthly service, Amazon decided to hit them upfront with one large fee.
This, of course, spits in the face of prevailing cell phone strategy. They often offer phones for pennies and make up for it through their monthly fees. That seems to have worked pretty well, given the proliferation of cell phones. Would the upfront fee model have worked as well? Maybe. If you want to appeal to wealthy consumers, sure. But for those who have an easier time paying for the device over a year or two, probably not.
I also question whether most people would be willing to pay that large a fee for a device that really only lets you read books. Sure, it's got a 3G radio too, but that's hardly much of a selling point. Bezos sees the Kindle's specialty as a positive. He said:
It's a myth that multipurpose devices are always better.
I get what he's saying, but I'm not sure consumer psychology agrees. There's something in the minds of consumers that makes us willing to pay more for gadgets that seem to do more. It's like we're getting more for our money -- even if the functionality isn't always the greatest. Case-in-point? The iPhone. Sure, I can read books better on a Kindle than on my iPhone, but is it worth my dishing out $489 for reading books a little more comfortably? Not so far. Ask me again when the Kindle's price comes down a few hundred dollars.
I think the Kindle also has some generational problems. I have a hunch that those in high school or younger might be more open to reading on a Kindle, but anyone older than that probably has a certain enjoyment of books. I, personally, like the mere aesthetics of books. I appreciate having a full bookshelf. I like the feeling of accomplishment when I've neared the end of a lengthy novel. Some people like to highlight or underline passages in their books. Maybe these are old-fashioned sentiments, but it's a real problem that the Kindle has to overcome, which might take a generation. Just because Bezos claims he doesn't like to read any books on anything other than his Kindle anymore, I'm not sure he'll be in the majority anytime soon.
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