Now, will this be the much anticipated Kindle 3?  No idea.  The timing seems right in a lot of ways, but this could just as easily be a minor cosmetic update in the interests of giving Amazon(NASDAQ:AMZN) a further edge in the eBook market.  Either way, August should be a good month for fans of the device as we can be fairly sure to see something new.  Personally, all I really care about is the new screen.  That Graphite DX model is very nice to read on.

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The unexpected feature that is, at present, merely a well-substantiated rumor, is that the new Kindle will finally be offering up the option of WiFi connectivity either in parallel with or exclusive of the existing 3G connection.  This opens up at least the possibility of having multiple pricing options depending on user requirements, since there is some evidence that plans have been made for a 3G-free model.  It also adds in a much-needed interface option for those who enjoy the Kindle device but do not have regular 3G access in their homes.  Coverage is growing all over the place, but it’s simply not quite everywhere just yet.  Even for those among us who do have the coverage, the speed boost offered by such an option will be a more than welcome advantage when it comes to web browsing and downloading.  This is to say nothing about the potential effect on price that going without 3G coverage might entail.  August is likely to be a fun month.

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Although sales of readers are expected to double this year, from the 4 million sold in 2009, that is still a mere fraction of the book-buying market. A lower-priced reader is one way to tap a larger chunk of the market. The ticket price of readers has been a barrier to wider consumer distribution.

According to Freescale officials, the new chip eliminates features that aren’t used in e readers while adding the ability to better control the unique E ink display technology. Currently the displays are controlled by separate chips. Freescale’s faster processor is controlled by a single chip, and will reduce page turning time from two seconds to less than a half second.

Apple’s iPad, set for release later this month, uses the company’s own chip and will not benefit from Freescale’s improved technology. With price tag as high as $699, news of price cutting by its competitors couldn’t come at a worse time. Price conscious consumers, already suffering from sticker shock on the iPad, may wait for lower priced Sony or Amazon readers. And the six-month release hits just in time for Christmas gift giving.

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Advertising

Amazon has applied for two patents: On-Demand Generating E-Book Content With Advertising and Incorporating Advertising In On-Demand Generated Content.  Essentially, the patents are for adding content-generated ads to Kindle products, in a manner similar to Google’s AdSense program.

The patents specify a number of hypothetical advertising practices that seem like many readers’ worst fears.  One example:  “If a restaurant is described on page 12… [then] page 11 or page 13, may include advertisements about restaurants, wine, food, etc., which are related to restaurants and dining.”   In addition to full page ads, the patents also describe adding ads to the margins of a book and fitting in extra ads if the book has larger margins.

It’s interesting to imagine what long-term goals of Amazon this may reveal.  Since the Kindle and the books read on it are already purchased up front, I can’t imagine very many consumers would be happy about ads.  It seems unlikely that ads will be added anytime soon, as Amazon is already getting bad press for this and wouldn’t want to lose its customer base.

One possibility, actually mentioned in the first patent, is for Amazon to create some sort of two tiered bookstore in the future.  In addition to the current, ad-free books, Amazon could start offering discounted, or even free books that rely on advertising revenue.  Another thing to consider is the use in newspapers and periodicals.  Papers are already primarily ad-supported anyway; Amazon could be hoping to license their ad service as news makes the transition away from traditional print media.  Any paper being published to an eReader format could mostly shop between Amazon,  Google, and others to choose an advertising provider.

Another possibility is that these patents are defensive move meant to keep Google with their successful ad-based revenue model out of digital books while Amazon itself has no immediate intention of putting ads into books.

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Jeff Bezos With Kindle DX (by TimYang.Net)

Amazon Chief Executive, Jeff Bezos, has made clear the company’s intention to bring the Kindle’s eBook store to more devices.  Apparently, Amazon views the Kindle and the bookstore as two separate ventures, and is not afraid to let competitors access the same library that the Kindle does.

Currently, the only non-kindle device with access to the book store is the iPhone, through the Kindle for iPhone app.  I would guess that some of the new devices getting Kindle support would have to be the iPhone’s competitors, most likely Palm, Blackberry, or Windows Mobile.

But the most strategic platform to cover would have to be Android.  If Amazon hopes to compete with Google’s upcoming bookstore, it would make sense to first push their own books onto Google’s mobile OS.

Unfortunately, it doesn’t seem like Amazon has any current plans to share their eBook format with everybody.  I’m guessing this will at some point be a necessity, however, as eReaders and competing bookstores become more prominent.  Sure, extra support for mobile devices will help the Amazon bookstore, but it won’t affect the buying habits of a Sony eReader user.  Eventually, Amazon will need to open their bookstore to all eReaders unless it wants to lose business to someone like Google.

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Kindle DX WiFi

Kindle DX was taken apart by RapidRepair.com recently. Kindle Zen took a closer look at these photos and suggested that Kindle DX’s PCB is wired for WiFi chipset and antennae. It’s quite possible that Amazon would sell WiFi Kindles in countries where it will not be able to reach an agreement with wireless operators. In the past Jesse Vincent speculated about possibility of 9.7″ Kindle based on Kindle source code and was right.

I wouldn’t hold my breath any time soon about WiFi in US version of Kindle because that would be a completely new device and Amazon has already released two during last three months. This caused some anger among Kindle 2 users who felt that their devices almost immediately became outdated when Kindle DX was released.

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Kindle Air

Taken from www.kindleair.com. According to registrar data this interesting domain just popped into existence on May 20th, 2009.

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from rcS.d/S05video_primary_init:

_PANEL_SIZE_6_0_INCH=6
_PANEL_SIZE_9_7_INCH=9

Does this mean that folks in lab126 are playing around with larger screens for next generation Kindle 3? Could be… There are some rumours circulating the web about next generation Amazon Kindle possibly being available this fall (holiday season 2009).

I promise to collect more rumors about Kindle 3, verify them, crosscheck and post a summary here soon enough.

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240,000 Kindles have been shipped since November 2007, according to TechCrunch, that’s what their source claims. We know that Amazon always stays coy about sales as part of its company policy so we may never get any conformation from Amazon about this.

TechCrunch says that their source is close to Amazon with direct knowledge of the numbers, possibly the same source that claimed Kindle v2 is on it’s way this fall — we’ve yet to see any evidence of that prediction.

TechCrunch goes on to say;

Doing a little back of the envelope math, that brings total sales of the device so far to between $86 million and $96 million (the price of the device was reduced to $360 from $400 last May). Then add the amounts spent on digital books, newspapers, and blogs purchased to read on the device, and you get a business that has easily brought in above $100 million so far. (Each $25 worth of digital reading material purchased per Kindle, add $6 million in total revenues).

From these numbers is appears that Kindle is already a profitable operation and has been so from the beginning, however, what we don’t know is whether after research and development costs have been factored in if the Kindle project overall is in profitability.

Wall Street has also came out with some new estimates;

Scott Devitt, an analyst at Stifel, Nicolaus & Co., predicts that Amazon is on track to sell 500,000 to 750,000 more Kindles over the next four quarters (including this one). He estimates that Kindle owners will buy an additional $120 to $150 worth of books and other content for each device, bringing the total revenues over that time period to somewhere between $225 million and $355 million. Based on that, he values the Kindle as a $1 billion business for Amazon.

So by this time next year there could possible be over a million Kindle’s sold by Amazon. In May, Citi analyst Mark Mahaney was estimating that total sales of Kindle’s this year would only reach 189,000. The image below shows what he thought would happen. Turns out that his numbers were way off, that’s analysts for you! Its time for him to significantly revise his estimate.

240,000 Kindle’s shipped, would you call it a success? It certainly has proved the nay-sayers wrong, it’s proved Wall Street wrong as-well.

If the numbers are to be believed, then its a wonderful start for the Kindle, the revenue from hardware sales alone is an estimated $100 million. When you begin to add on book sales, Amazon looks like its earning some major money for its shareholders.

Source: TechCrunch

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From CrunchGear;

An insider let slip that two new Amazon Kindle models will hit stores this holiday season, with the first coming as early as October.

The first is an updated version with the same sized screen, a smaller form factor, and an improved interface. The source told us that Amazon has “skipped three or four generations,” comparing the old Kindle to the 1st gen iPod and the new version to something like the sexy iPod Mini.

The rendering to the right is NOT what the new Kindle will look like – we hope – it’s CrunchGears own rendering. However, according to the article, Amazon will be making the new Kindles available in a variety of colours to make the device more appealing to a younger audience, so buying a pink Kindle is not out of the question – yet.

Reportedly, the first model will be a smaller incarnation of the existing Kindle with the same sized screen and an “improved interface”. The source goes on to say that the newer smaller Kindle will have “skipped three or four generations” it will be interesting to see exactly what this means, a new eInk display perhaps or a new operating system? The second new version will be shaped like a 8.5 – 11 inch sheet of paper and will be noticeably larger than the current model, it will hit shelves early next year.

There is no word on the pricing structure, or indeed if it means that the existing Kindle will be reduced in price – we hope so.

We would advise that you take this news with a pinch of salt because Jeff Bezos said this at “D: All Things Digital Conference” back in May;

“There will be a second version, a third version, a tenth version. … but a second version is not that near.”

Was Jeff deceiving us? I don’t think he was, however I think the most likely reality is that Amazon is refreshing the product line – just like the Apple did with the iPod. First we had the iPod, then along came the iPod Nano, iPod Shuffle and iPod Touch, most likely that is what is going on. Amazon is offering different flavours of the Kindle depending on your reading habits, a “Kindle Nano” if you occasional reader, a “Classic Kindle” if your a major bookworm etc…

This rumour has thrown a gigantic spanner in the works if you were thinking of purchasing a Kindle any time soon.

Source: CrunchGear

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