Will Amazon update the Kindle DX?

The Amazon Kindle DX: an iPad-sized eInk screen.

Looks like Amazon is going to have a number of new Kindle models, including next-generation versions of the Kindle Fire in both 7 and 10 inch versions, and also an updated Kindle Touch that incorporates screen illumination (for parity with the new Nook version that came out a few months ago). Amazon is even rumored to be working on a Kindle phone. But the Kindle DX (with a 10 inch screen) is still stuck in its previous-generation, overpriced ghetto. You can buy a DX today but you’re getting the older version of the eInk screen, not the new one with faster refresh times and better contrast on the latest eInk Kindles. And you’re paying a monstrously inflated price reminiscent of the first-generation Kindle hardware. The DX doesn’t even have the same software as it’s smaller brethren, including the advanced PDF support. For these reasons the DX is basically a dinosaur that has been unchanged for almost 3 years. One of the reasons I held out for so long in buying a Kindle of my own is because I kept hoping for a DX refresh, but they still haven’t even discounted the aging hardware.

I would still buy the old DX if they dropped the price in half. And if they came out with a new version, I’d find it compelling at the same price point it is now – imagine how amazing a Kindle DX Touch would be? It would be smaller, lighter, thinner than an iPad 3 and would have 100 times the battery life. It would be a much more natural platform for reading digital newspapers and magazines. And we can dream even bigger: what if the DX had a more advanced touch screen to allow note-taking with a stylus? Suddenly it would be more compelling than an iPad for hundreds of thousands of students. In fact given the cheaper hardware and longer battery life, a note-taking DX would be a real game-changer.

The end of Facebook? not if it goes Prime

Is Facebook toast? I’m not asking because of it’s IPO, which despite whining from the tech pundits was perfectly calibrated. I’m asking because it’s basic business model is still such a clunker:

Facebook currently derives 82 percent of its revenue from advertising. Most of that is the desultory ticky-tacky kind that litters the right side of people’s Facebook profiles. Some is the kind of sponsorship that promises users further social relationships with companies: a kind of marketing that General Motors just announced it would no longer buy.

Facebook’s answer to its critics is: pay no attention to the carping. Sure, grunt-like advertising produces the overwhelming portion of our $4 billion in revenues; and, yes, on a per-user basis, these revenues are in pretty constant decline, but this stuff is really not what we have in mind. Just wait.

It’s quite a juxtaposition of realities. On the one hand, Facebook is mired in the same relentless downward pressure of falling per-user revenues as the rest of Web-based media. The company makes a pitiful and shrinking $5 per customer per year, which puts it somewhat ahead of the Huffington Post and somewhat behind the New York Times’ digital business. (Here’s the heartbreaking truth about the difference between new media and old: even in the New York Times’ declining traditional business, a subscriber is still worth more than $1,000 a year.) Facebook’s business only grows on the unsustainable basis that it can add new customers at a faster rate than the value of individual customers declines. It is peddling as fast as it can. And the present scenario gets much worse as its users increasingly interact with the social service on mobile devices, because it is vastly harder, on a small screen, to sell ads and profitably monetize users.

The basic problem is that Facebook’s major innovation is to facilitate social interactions, but unless you charge people 1 penny per like you can’t actually monetize those interactions (and any attempts to do so would act like a brake).

But there is an obvious way to monetize Facebook that I am surprised few are talking about. Consider the numbers: Facebook is valued at $100 billion, has about a billion users, so each user is “worth” $100. But Facebook only makes $5/user annually in revenue from ads. So, why not offer users a paid option? If Facebook followed Amazon’s example and offered a “Prime” service, they could charge users $75/year (or $8/month ongoing). In return, that user could get a pile of perks:

  • no ads anywhere, of course
  • free digital gifts and an expanded menu of “pokes” (bring back the sheep!)
  • a “premium” version of the Facebook app with built-in Skype functionality
  • more search filters and automated searches for friends (akin to LinkedIn’s subscriptions)
    the ability to track who views your profile

this is just a basic and obvious list but I am sure there are other perks that could be offered. For example, given that Craig’s List hampers innovation in the classifieds space, Facebook can and should leverage the social graph and offer it’s own (as well as compete with Angie’s List, or buy them outright). Facebook Prime users could be rewarded with better access or free listings.

And then there’s the coupon space – Facebook has all the data it needs to outdo Groupon or LivingSocial. If Facebook acquired the latter in fact it would have a headstart, and again Facebook Prime users would benefit with specialer-than-special offers or early access to deals.

People have already compared Zuckerberg to the next Bezos, but unlike Amazon’s profligate revenue streams, Facebook remains stubbornly focused on one thing. It’s time to diversify and leverage that social data in ways that people actually use. And let the users pay for it!

my @AmazonKindle Touch: well worth the wait

I’ve wanted a Kindle since version 2.0, and it’s hard to imagine that these devices were several hundred dollars. At long last, I’ve joined the club, with this little beauty:

my Kindle Touch WiFi

With a retail price of $99 it literally is almost a no-brainer now. Especially since buying a hardware Kindle gets you access to the Kindle Lending Library (assuming you are an Amazon Prime customer) which lets you read one book a month for free. I’m working my way through The Hunger Games now.

In addition, public libraries have ebook lending programs that work just like regular borrowing (though like physical books, you have to put a hold on the popular ones and wait a while). And of course there is Project Gutenberg and the vast public domain. I’m not averse to buying books but the same rules in my mind apply to buying a ebook as apply to buying a physical one: unless it’s a must-read, I can wait to borrow it from my library. The fact that the library lending model extends to ebooks’ domain is just pure unadulterated awesome. But if there’s something I really want to read, I can wait a month and get it via Amazon’s program, so that’s an advantage over the physical realm.

Of course, with the recent news that the Department of Justice is going after Apple and the big-name publishers for price-fixing collusion on ebooks, the price of ebooks will likely drop significantly at Amazon. The first book of The Hunger Games trilogy is already marked down to $5 (though the sequels are higher). The omnibus collection of the Game of Thrones books still says “price set by the publisher” at $29.99 which is less than $8/book, and I wouldn’t be surprised if that drops in the next week to $25 as well.

It’s a good time to own a Kindle. I have the same feeling of loyalty towards the Amazon ecosystem as most Apple stalwarts do theirs.

Kindle for the Web

J complains that the Mac version of Kindle is not exactly stable:

The Kindle for Mac application is crap. Not in the sense of “limited functionality and poor UI” (although those are true, too), but in a more serious “corrupts user identity every time it does its (weekly?) auto-update”. I had originally thought the problem was with the version available in the Mac App Store (which, thanks to Apple, is much, much older), but no, the direct download from Amazon does it as well.

I’m guessing that Amazon is starting to wean itself from Apple given that there’s the issue of in-app purchasing hanging over their heads. I’m not really sure if there wll even BE a Kindle version in the App Store in two months, esp if Apple sticks to the June 30th deadline for in-app compliance.

Even if Amazon and Apple divorce, iOS/OSX users will eventually be able to use the web-based version of Kindle though. I haven’t used it yet, it’s still in beta, but it should be available soon. At such point I would expect Amazon to dump a lot of dev resources into the web version as well to keep people from jumping ship to ibooks.

The aPad – Amazon’s imminent android tablet and iPad killer

Look, it’s basically obvious – Amazon’s new Android Appstore is the precursor to Amazon launching a full-fledged Android tablet of its own. And, true to the character of the kindle, it’s going to be cheaper than other tablets, won’t be packed with features like gyroscopes and cameras, and will probably use a Mirasol color display that is just as readable outdoors as e-Ink and can support video.

This inevitable Amazon tablet, which I am dubbing the “aPad”, will allow complete vertical content management just like Apple does with iTunes, since Amazon also sells movies, music and now apps – but Amazon has a bigger customer base, and also has that one-click patent everyone loved to hate. Also, the appstore even lets you test-drive apps from right in the web browser.

No wonder Apple is scared sh#$&less and is suing Amazon over the name and trying to boot Kindle from iOS.

I cannot wait.

UPDATE: On facebook, a dear friend (and Apple zealot, in a good way 🙂 comments:

…just like the android phones killed the iPhone! …wait..

Now, let me assert and concede that the iPhone is probably the finest phone in existence. And frankly I don’t think that there will ever be a iPhone killer. It should be noted however that the definition of “killer” is rather loose – Android is indeed eating the iPhone’s lunch with respect to market share, for example. But user experience? I’ve never used Android, so I can’t comment, but we are an iPod Touch 4, iPhone 4, and iPad 1 family. I personally use a blackberry because I am a keyboard guy, and the bberry approaches Thinkpad transcendence in that regard. At any rate, I know and use iOS and no one is going to beat iPhone on that field, not for a long time.

But a tablet is a different matter. iPad certainly opened the door, but the iPad is still a flawed device in a fundamental way: it’s not even remotely “post-PC” as Apple pretends it to be. Without a PC the iPad is unusable. Without iTunes the iPad is closed. Only a technology company with equal vertical integration of a content ecosystem, like Amazon, can match the iPad. Here’s your basic task: decide you want to watch a certain movie, get it on your tablet, and watch it on the train during your commute. How can you do that on Android right now? Only Amazon and Apple can make that happen.

But where Amazon has the advantage is that it sells un-DRMed MP3s for music, permits video downloads as separate files, and (this is where the Andoid advantage comes in, which is irrelevant on a phone platform) supports industry standards for content. So you have the best of all worlds.

Don’t get me wrong – the iPad won’t die after being killed. But for the average family, the aPad will simply be a better value – half the cost, half the weight, and none of the hassles. For surfing the web, parity; for watching TV and video, advantage.

I think Apple’s true genius device is the iPod Touch. No one has anything like it. and the iPhone is king. But the iPad is a niche product, like netbooks were – and Apple has left a huge opening for Amazon to exploit by making it such a closed ecosystem.

iPad vs Kindle – no contest

The quintessential question – buy an iPad or a Kindle? – is rather glibly answered by Mark Jaquith here: buy both.

Well, that’s what you’d expect an iPad owner to say, because they are the sort that can afford to blow $500 on an oversized iPod (the new 4th generation version of which is, as even Jobs himself conceded, basically iPhone 4 without the flawed phone or exorbitant monthly expenses).

But Jaquith also makes a pretty solid case on the philosophical merits for one of the devices over the other. It’s implicit, but pretty much impossible to deny which device is superior, from this:

With the Kindle, you’re becoming absorbed in a story for an hour or more at a time. You can read in bed, right before you go to sleep, without worrying that it will rile you up. To the contrary, the Kindle relaxes you. You might even take it outside to the pool or to the hammock. Flight attendants will chastise the iPhone-using passenger next to you as the plane descends for landing; but you, the gentle Kindle user, she’ll merely touch on the shoulder and tell you with a smile to make sure your seatbelt is securely fastened.

The iPad wakes you up. BAM! Here’s the news, with pictures and video. TWEET! Here’s the torrential banality of Twitter to distract you from something (or everything) important. TWEET! Here’s the same exclamation used again because you’re paying the insanely addictive Angry Birds game. ZAP! Here’s you firing off an e-mail over your morning coffee.

I’ve never found myself struggling which to pick, much in the same way that nobody is ever torn between having tea and going sky diving. They are different devices, for different purposes. And that’s a good thing in the case of the Kindle. There is something almost drug-like about having a device that can do anything. It’s hard to turn off that ability. With the Kindle, you won’t be thinking about increasing your Fruit Ninja high score, or frantically checking and re-checking your e-mail. You’ll be in the only state that is appropriate when reading a book: completely lost in it.

And the iPad? It lets you live your soul crushing, hyper connected, vanity searching, e-mail enslaved life in any room of the house, instead of being planted in a desk chair in a darkened basement. And it has two other things going for it: it’s easy to set it down and rejoin the world, and sometimes you’ll lose it in a stack of mail for a day and be forced to do something edifying instead.

I just bought an iPod Touch 4th Gen because my kids took my 3rd Gen away from me. I intend to use it entirely for two things: Skype and Facetime with my iPhone-4-totin’ wife. For everything else, I have my blackberry – and if I really want to play Angry Birds, I can ask my kids’ permission.