All this week rumors have been flying about what Amazon would be announcing at a press conference at Pace University this morning. Now we know that the news is exciting indeed, with a new e-book reader with a 9.7" screen that will target newspaper readers and college textbook readers with electronic delivery of content. It is priced at an impressive $489 (the six-inch version sells for $359). You can pre-order now and expect delivery this summer.

Chris Chinnock
Senior Analyst and Editor
for Insight Media

For those who purchased our E-Paper Displays, Applications and the E-Book Reader Market report, you already know that these are two of the three top applications that will have the largest impact on the EBR market (and you had a head start in reacting to this trend!).

Called the Kindle DX, the unit features an e Ink electrophoretic monochrome screen with 16 shades of gray. Rotate the screen from landscape to portrait, and the image changes too. It will allow pdf files to be viewed instead of only the Kindle proprietary format, and annotations, notes and highlights will be allowed - a feature users have repeatedly requested. There is a text-to-speech option, too, and The Wall Street Journal says the new Kindle will have a more functional browser. It weighs 18.9 ounces, is 0.38" thin and has 3.3GB of internal memory. Content would continue to be delivered via an EVDO modem over Sprint’s wireless 3G cellular network.

On the newspaper side, The New York Times, The Boston Globe and The Washington Post announced the Kindle DX would be offered with a subscription to the daily edition of the paper. In fact, the program will be used to deliver The New York Times and The Boston Globe to locations where the paper edition is not currently available - and at a reduced price if you sign up for a long-term subscription. Currently, a monthly subscription to the NYT is $13.99, but that may drop to $9.99 with a contract. What is unclear, however, is how advertising will supplement subscription income and how this revenue will be split between Amazon and The New York Times. Most is likely to flow to Amazon, however.

With the move of content increasingly going on-line, newspaper subscriptions have been declining and the economy’s fall has devastated ad revenue. Therefore, finding new business models to help publishers has become critically important if they expect to survive.

We, and others have noted however, that the same content can be found on newspaper web sites for free, so will EBR subscribers continue to pay?

The Kindle DX can, of course, be used for reading books too. Amazon CEO Jeff Bezos noted at the press conference that, "Eighteen months ago, we launched Kindle, and at the time we had 90,000 books available for Kindle. (We had) 230,000 books just three months ago when we launched Kindle 2, and we’ve added another 45,000 books in just the last three months. We’re actually accelerating."

On the textbook front, Amazon announced that it has partnered with textbook manufacturers Pearson, Cengage Learning, and Wiley, who together represent more than 60 percent of the U.S. higher education textbook market. By this summer, textbooks from the following brands will be available on the Kindle Store: Addison-Wesley, Allyn & Bacon, Benjamin Cummings, Longman & Prentice Hall (Pearson), Wadsworth, Brooks/Cole, Course Technology, Delmar, Heinle, Schirmer, South-Western (Cengage), and Wiley Higher Education.

With this availability, six universities will offer select students the new DX model pre-loaded with textbooks for a number of disciplines. The trial will start this fall and will involve Pace University, Case Western Reserve, Reed College, Arizona State University, the Darden School at the University of Virginia, and Princeton University.

Case Western president Barbara Snyder said that the university would be seeing how study habits and the learning process change with the use of Kindles as textbook replacements.

Few would argue that there is a need to reduce the bulk of these textbooks and the high cost to students. And, if the right business model can be developed to support this, a win-win scenario could develop, which is why we have been bullish on this application.

One can argue that color is needed for textbooks and this is certainly true in some cases. But other subjects are likely to be just fine on black and white displays, while color products remain in development.

On the other hand, almost every college student has a notebook or netbook already, which can be used for textbook reading too - and with full color displays. They won’t last as long without a charge, but students are not far from a wall plug at any time either. But they can’t be used outside, whereas Kindles can.

According to Norbert Hildebrand, Insight Media’s forecast analyst on the EBR report, "Our optimistic sales forecast of EBR readers, where the primary use is an e-textbook and e-newspaper applications, is over 8M unit sales by 2013."

This is clearly an exciting market to watch.

Additional notes:
Apple has also long been rumored in development of a large touchscreen tablet that could also fill a similar role, though it would likely use an LCD and so would be less suited to dedicated book reading than the Kindle’s E Ink screen, whose lack of constant refresh is easier on eyes and consumes much less power.

Such e-reading devices are due in the next year from a range of companies, including the News Corporation, the magazine publisher Hearst and Plastic Logic

Another hitch is that some makers of reading devices, like Amazon, want to set their own subscription prices for publications and control the relationship with the subscriber - something media companies like Condé Nast object to. Plastic Logic and Hearst have said publicly that they will take a more open approach and let media companies deal directly with readers and set their own prices.

Then there is the looming presence of Apple, which seems likely to introduce a multipurpose tablet computer later this year, according to rumor and speculation by Apple observers. Such a device, with a screen that is said to be about three or four times as large as the iPhone’s, would have an LCD screen capable of showing rich color and video, and people could use it to browse the Web.