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Archaeopteryx transitional fossil

With the proliferation of smartphones, tablets, and netbooks, Amazon will most likely announce the end of production of the Kindle device within four years. The APP will still be around for other devices, but the actual device will cease production. You can see the shift starting with some of the marketing for Amazon as they have started promoting the app version for other devices as much as, and often more than, the device itself.  The star is the DELIVERY of the content, not the actual reader.

1. It will get cheaper… but so will its better, faster, more elaborate competitors

Moore’s law has processing power  in electronics double roughly every 2 years, give or take.  Same price, twice the power. It shows up first in high end computers, than trickles down to lower end devices. So the bleeding edge will be amazing in 4 years… and the average will be well above the tech level of the Kindle right now.  Even the very bottom of the market phone in industrialized countries should be able to support a basic ebook ap by then.

Why would you buy a device that does less than your basic phone?  It would have to be either significantly better at what it does than a comparatively priced handheld device OR significantly cheaper.    As the tech becomes faster, cheaper, better, the bottom end of the field becomes increasingly crowded and upgrades between devices are much closer together. Right now there’s a roughly $400 difference between the cheapest Kindle and the cheapest tablet computer and only $80 between it and the iphone, a good example of a full featured smartphone.

Assume in two years it’s half that cost for same features.  Kindle is now $72 for the ad filled version. Full featured smart phone, $100.  Bottom end tablet $200.  Take it out another generation, Kindle is $37, smartphone $50, tablet $100.  Each jump compresses the field together so more features become cheaper and cheaper.  More people can afford the very bottom end item… but on day to day affairs, PHONE probably trumps all other features.  The proliferation of faster, cheaper smartphone crashed the market for PDAs.  Try buying a new one that ISN’T a phone and internet enabled.  They’re all gone.  Kindle will shortly be in the same position.  Either it becomes something fundamentally different than it is right now or it will vanish.

 

2.  The Kindle’s features make it DOA in the developing world
The international market is designed for cellphones. There’s parts of the
developing world that have more cellphones than people! The rate of subscription far exceed those of the industrialized nations because if you want any type of phone, it’ll be a cellphone because there’s no infrastructure for landlines.

Ditto for internet access. Why run landline cable or fiber when you could do
virtually everything on a phone? Kindle would either have to become a full
function tablet AND phone to compete, but that would run counter to the design for the industrialized nations. It’s thus confined only to industrialized nations and that’s NOT where the highest potential profit is. Either it needs a big change in functionality (becoming a phone) or it can’t penetrate that market.

Plus there’s the issue of shipping the devices to areas with poor internal infrastructure.   Plus the issue of charging them. While a Kindle can hold a charge a lot longer than a standard cellphone, it doesn’t use the same stock parts. Good luck repairing it!  Due to their overall utility, infrastructure supporting the sale and service of cellphone has already developed in remote area where none of the infrastructure exists to support the Kindle device.

The Kindle’s main selling point in the US is also a MAJOR weakness in developing countries.  The Kindle has no backlight. It makes it easy to read in sunlight, impossible to read in the dark.  In much of the developing world, there is no lighting at night and that is the major drag on education.  Kids can’t read textbooks at home in evening because they have no lights!  So the Kindle can’t even capture the educational market in developing markets, while its competitors can.

Investing money in making the ap work on every single cellphone platform they can and in as many language as possible  is a much better bet.  Without significant changes to the Kindle device, its DOA in the developing countries.

 

3.  Amazon is NOT a manufacturing company

Amazon is not a manufacturer. The Kindle is one of only two items that has the Amazon logo on it (the other one is the shipping boxes, which should tell you something) They are a distributor.

UPS doesn’t make trucks.  Comcast doesn’t make televisions.   Publishers don’t make reading glasses. Why would Amazon continue to make the Kindle?  THEY WON’T.

Why tie up money and effort in the design for the actual device?  In the short term, the Kindle device served as a transitional product.  It jump started the market for ebooks and gave it a big dramatic introduction. It brought the ereader to the front of people’s consciousness and gave them a real object to hold in their hand to take it out of the theoretical and into the practical.

Amazon didn’t invent the ebook and now that the Kindle device has served its purpose, it will make way for the newer, better model: the Kindle App. The App returns Amazon to its core business and eliminates dealing with the manufacturing end all together, which in turn frees up money and focus for making the app better, faster, more accessible.

I would not be terribly surprised if they started offering a cobranded version
of computers and phone sthey shipped that CAME with the ap on it… just like
Microsoft. Buy your phone or computer through Amazon, it comes with the Kindle app preinstalled… and arrives in one of those branded boxes.

 

 

Nora O'Neill

Nora O'Neill

Nora O'Neill

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2 Comments

  1. Good article Nora.

    I do not have a kindle and the phone I have has the simple alpha-numeric pad so to send a text message is still a somewhat tedious process for me. I have held a Kindle (my daughter has one) and looked at some other similar devices in stores. Not for me but the Kindle does do the trick for a lot of people. Very readable but as you said, “No backlight” and I would have to set a pillow on the floor by the side of my bed to catch it when I fall asleep while reading.

    My wife has a phone with a keyboard on it and I have used it to text. I suppose I could get used to it but the keys are so small, I’m used to what I have, so I put off switching. I’ve used friend’s Iphones a few times to access my emails and find that they are handy but heck if I would want one of them or a similar item to be my primary internet access. Nor would I want to read a book on a phone screen.

    That is about it. I’m not a “high-techie must have the newest ‘toy’ at all times” and I’m more of a grumpy “Why can’t they leave it the way it was” kind of guy when Adobe or Java wants me to spend my time getting an update.

    The line you wrote, “Why would you buy a device that does less than your basic phone?” did not address the issue of readability. Question is will ‘phones’ ever have a screen that makes reading a pleasure?

    I find most phones I’ve seen have screens that are impossible to read in certain light and, as an aside, say a prayer before picking it up if you drop it but that dropping it goes for e-readers too.

    Perhaps they will come out with e-readers with readable screens that have phones built into them. Then and only then I MIGHT invest after the price drops from the initial introduction. (I’m grumpy AND cheap)

    Once again, Good posting. It will be interesting to see what happens. We have come quite a way from the days horses gave way to the auto, houses were converted from gas to electricity and the telephone was introduced.

    • Some very high end phones have a projector in them so you can project what’s on screen onto a flat surface. It’s currently VERY expensive and finicky about how visible it is in anything but a dark room.

      You can also buy a projection device that will allow you to project a keyboard onto a flat surface and it’ll pick up your motions. The device itself is finicky and about the size of a cellphone itself. It’s around $150-$200 by itself, depending on the model.

      Give those two items a few years and you’ll probably be able to put your phone down on any available flat surface and project a big version of the screen in front, keyboard projected to back. (or side) It’s just a matter of the quality improving, tech getting smaller, and the cost falling. but it’s on the horizon.

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