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| Innovating The Next Big Thing | September 6, 2010 |  |
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Technology Pundits: Barnes & Noble's Kindle Rival
Apr 10, 2009 – By Rob Enderle I've used both the first and second generation Amazon Kindle products but, while improved, the second generation Kindle still could be better. In addition, Barnes & Noble has one big advantage over Amazon, they actually have stores, and the result could be a more popular product that actually would have an even bigger impact than the Kindle did. Amazon is no Apple and while the Kindle is to what came before it much like the iPod was, without that Apple bounce, it isn't nearly as formidable. Kindle Problems Problems with the Kindle come down to three general areas. Presentation, lack of brick and mortar retail presence, and cost. Presentation includes design, initial pitch, and sustained marketing. Apple does all three very well; Amazon misses a little on the first and is out of the boat on the second two. Amazon seems to believe that "if you build it they will come" and that is rarely the case. In design the product, in its revised form is improved and clean, but not overly impressive. It reminds me a lot of the early iPods in color and finish but the market has largely moved on to darker colors and richer finishes. It still doesn't have a built in light which should be a given for any battery run reader and killer features like text to speech and email receipt of materials aren't as easy to use or as widely used as they should be. In the first, the biggest audience for the feature, people who are hearing impaired, find it nearly impossible to turn the text to speech feature on. The combination of these mistakes is likely crimping sales in excess of 20%. People like to touch products before they buy them yet the Kindle is not available in stores. This is a serious oversight on Amazon's part and likely has an even greater adverse impact on potential sales. Granted at its price point this is far from an impulse buy under most situations but it almost knocks it entirely out of the gift category because often this is how people discover new products they might want to either gift or ask for. This likely has a drag on potential sales in excess of 30%. Price for products at volume in this class of offering go vertical below $200 and device price, with cover, is closer to twice that. A lot of the cost for the device is in the bundled wireless service and that is something you wouldn't necessarily want to lose. Below $200 the available market for this device would likely increase in excess of 3x based on past product pricing decisions. Barnes & Noble Clearly Barnes & Noble doesn't have a reputation for marketing hardware either but they could build a more attractive offering easily enough and they probably get that a book light in a battery run product would be both easy to add and a critical feature. If they used Steve Jobs as an example they could showcase their offering better than Amazon did and would sample it out more aggressively to the key influencers covering this space. They could build buzz by say, leaking the product (which this may be an example of). They have stores, a lot of them and could clearly feature them in those stores. But, unlike the Kindle, they could build in a bar code scanner so if people were shopping in the store and wanted a book on their eBook they could use it to scan the code on the book in the store and it would arrive electronically. For those that didn't want to mess with the wireless approach the cashier could install the new book for them as part of the purchase price. But you might be able to use a lower cost (WiMax) wireless service and drop the cost, and thus the price, of the device substantially. Or negotiate a carrier price per download and build the cost into the books rather than the base device. You could also allow the books to increase in price to offset the purchase price of the device, or increase the capability of the device making the wireless connection more valuable and create a subsidy that way. Finally these things would be great as email and calendar management products and you could likely tie them back to a $20 monthly charge, much like the well regarded Peek device uses, to get those functions, once again cutting the cost, and price, of the device. Wrapping Up Barnes & Noble could steal this market if they produce the correct balance of device, service, and customer experience. This market is still young we are simply waiting for the first vendor to iPod it. The Kindle is close, but as Creative Labs can attest, close often isn't good enough. Courtesy Technology Pundits. » Send this article to a friend... » Comments? Tell us what you think... » More Analyst Insights articles... 
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