Netronix is working with Texas Instruments in order to bring out new eBook readers sometime in 2010. These eBook readers will be running on Android and will do more than just read eBooks. These are, of course, going to be rivaling the Kindle for market share.

Specifications are not available at the moment because the devices are still under development but the chairman of the company, Arthur Lu, that it will have the unique ability to interoperate between Android smartphones and embedded devices. He did not elaborate on it but it looks like this is Netronix’s bid to make their offering different from the rest of the crowd. The ultimate goal is of course to offer something unique and different that will help to sell the product. And they have another something lined up along those lines.

The device will not only have interoperability with other Android devices but it will also have 3G and 3.5G data connection capabilities. This will be done via WWAN, which is only just catching up across the world. These 3G models are expected to land sometime in the middle of next year.

According to Lu, they are looking to transform this reader device into a platform for personal communications. So what he is looking for is the convenience of an eInk screen by but the data support of a MID. Sounds to me like asking for too much.

Kindle works so well because it is focused on reading books and reading books only. While trying to do so many things, the device is likely to end up confusing customers. And may even frustrate them.

Amazon Kindle DX

While browsing the announcements about Kindle 2 international launch I’ve stumbled upon a post on electricpig.co.uk in which James Holland claims that Amazon UK spokesman Ben Howes telling that “we (Amazon) expect to add a Kindle DX family member with international roaming sometime next year.”

This is interesting piece of news, although you can hardly call it surprising since there is obviously demand for such a device, “sometime next year” is a rather wide period of time (I’m sure that Amazon will release something and Kindle DX seems logical), also there is little that is preventing Amazon from releasing such a device:

• Hardware and software changes are rather trivial and low cost.
• Amazon managed to untangle the horrible mess called international copyright law and publishing rights and implement geographical restrictions for books based on country and still come up with decent number of books for most of the 169 countries to which Kindle 2 will start shipping on October 19.
• They’ve managed to set up wireless connectivity in 100+ countries by taking advantage of AT&T roaming agreements. While data prices are substantial and infer usage restrictions (international download surcharge, no web-browsing, etc) but it works for Kindle 2 and it will work for Kindle DX
• Amazon had distribution and logistics set up and figured out long before Kindle 1 was released.

So you would ask why not release it now? There are several possible reasons and most likely all of them play a role to a different degree each:

• If Amazon does two releases that are several months apart, they would generate hype twice and benefit from two spikes in sales. If they were to release both devices together I doubt there would have been twice as much hype. I think that Amazon is carefully timing their releases and price drops to maintain maximum possible customer attention to their product in the long run. After all Amazon was selling products made by other companies (some of them quite hyped, like iPod Touch), they know sales volume and how much does it spike after a piece of news and at what pace it then drops. And it would make total sense for them to use this knowledge to their advantage.
• It’s easier and cheaper to test new technology (3G GSM modem integration) on one device and then apply your experience to integrating this technology into another device. It’s also easier to retool one production line than two. If you consider the fact that Kindle DX was sold out for almost a month this summer it makes sense that Amazon would like to avoid disruptions in production if they can.
• Perhaps international Kindle DX will include additional features like better PDF support, touchscreen or some other innovations. These take time to develop. Taking a pause would also let Amazon see how Sony touchscreen eReaders would fare and make a decision on whether to go down that road or not.
• If you look in the upper left corner of BlogKindle.com you will see that Amazon already sells 6 Kindle devices, all with different price points. Adding another one might confuse customers too much and disrupt the buying process. So Amazon would likely phase out US version of Kindle 2, merging it with refurbished Kindle 2. Then they would have 6 months before they would need to worry about reselling refurbished international Kindles.

If I were to guess when would Amazon roll out international Kindle DX I would say: “not for another 4 months” since this seems to be the pace they’ve set this year and considering that Amazon just did their “holiday season release” and it would make little sense to dump something on the unsuspecting customers amid holidays.

Let’s wait and see…

According to nielsen wire, average Kindle user earns Sprint $2/month. Given 12 cents/MB price this yeilds 16.6MB on average downloaded by Kindle user per month. This includes book purchases, periodicals, blogs and web-browsing. It’s hard to speculate as to how much each of these activities contributes to the total number… My guess would be that web-browsing and blogs are negligeble at this point. As to books vs. periodicals, I’d guess that average Kindle user subscribes to 1 periodical and the rest are book purchases.

Another thing to consider are software updates. In little over 3 months since Kindle 2 was released there were 3 software updates totaling 12 megabytes in size. Cost to Amazon – $1.44. This is 24% of $6 wireless charges for this time period. Each update contains several packages – one for each previous version of the software. This makes it possible for users to skip updates and jump from version 2.0 to 2.0.3 directly, but it also bloats future updates. If these numbers are right updates will become a serious problem for Amazon in the future. We’ll see…

Recently MediaShift blog mentioned some interesting numbers related to Kindle wireless data pricing:

> Avg. file size = 1.2MB
> Bandwidth cost = 12 cents MB
> Selling price = $13.99 month
> Monthly bandwidth cost = $4.32

I tried really hard to track down the source of this information but all I could find was indirect hearsay statement confirming it:

According to a reliable source in the know, The New Yorker’s Kindle split is divided 33% New Yorker, 33% Amazon, and 33% wireless carrier.

At first 12 cents / MB may seem a little steep given that most mobile companies nowadays offer 5GB wireless broadband plans for $60/month (1.2 cent / MB). However bandwidth economics are a bit more complex. Sprint already has a 3G network and costs of operating it are fixed whether it’s utilized as 1% or 100% capacity. Therefore it’s in the best interest of the carrier to sell all of the bandwidth even if some of it is sold at a huge discount. Most individual users would use only a fraction of these 5GB and will subsidize users who use it all. With wholesale customers as Amazon there is no subsidies and Sprint would charge highest price Amazon would be willing to pay.

Assuming 12 cents/MB is correct here’s what we get:

• Average Kindle book is 0.7..2MB – Sprint gets paid 10..25 cents per download. Download doesn’t mean sale as customers can buy once and download multiple times.
• Average Kindle book sample – 0.2..0.6MB – it costs Amazon 2..7 pennies every time you download a book sample. This is comparable to click price in pay-per-click advertising and given that customers “target” themselves, conversion rate should be very high
• WSJ subscription – numbers are very similar to ones in MediaShift example – Amazon pays 4…5 USD per month for delivering the content.
• Personal document conversion – you pay Amazon 15 cents per megabyte, Amazon pays Sprint 12 cents. Consider that resulting document same size or smaller than then original because of data compression and you get a sustainable revenue model for Amazon even in the unlikely case of bandwidth price going up.
• Web browsing – free for users, same 12 cents per MB to Amazon. But how many customers really use it? I don’t. Whenever I need to browse the web on the go I turn to either iPhone or netbook if WiFi hotspot is nearby.

In 2002 1 megabyte of wireless data used to cost more than a dollar. If this trend continues, wireless data costs will stop being a significant factor in Kindle economics 3-4 years down the road.

However with current prices it’s quite possible that Amazon may get unhappy about Savory hack that allows users to download large PDF files and convert them on the fly directly on Kindle.

You may of heard that over the weekend Apple unveiled it’s new iPhone 3G device, there has been a lot of buzz surrounding the device, mostly because of the software, the actual hardware is not that impressive and mostly includes improvements that the original iPhone should have shipped with in the first place. The iPhone 3G comes in at a impressive $199 to buy, however you will be paying more in the long term compared to the classic iPhone with higher network subscription charges.

Now how does the new iPhone effect us Kindlers? well… Apple has done something remarkable with the software – they have opened it up! which is impressive considering we are talking about Apple here. All this has allowed third party developers to create e-book apps for the iPhone 3G and has turned the iPhone into a e-book reader.

There are already a couple of iPhone e-book reading apps out already, the iPhone Bookshelf is one which supports multiple formats.

Another promising e-book app is Stanza. Stanza is an app which lets you read e-book which are stored on your iPhone and e-books online, make sure you check out the demo at the bottom of the page. Stanza can also read files in the ePub format, which many other apps are able to work with, perhaps the Kindle will eventually support ePub aswell one day.

The only annoying thing about reading an e-book on the iPhone is that each e-book comes as its own individual app, with its own icon on the iPhone home screen, Apple could have done a better job of categorising e-books or even better creating their own e-book reading App.

There is still some speculation on whether  Apple will create a dedicated e-book reading device, but for now we know e-books are on a Apple device through third party apps, if you couple this with rumours that Apple is in touch with major publishers this would support the theory that Apple is working on its own e-book reader, or at least a e-book store.

Will the touch screen make it easier to read an e-book? I don’t know since I don’t own a iPhone or iPod Touch, but I suspect that it might be a bit easier to read with the iPhone, swiping the screen to turn the page seems a more natural gesture than pressing a button, however you will be using both hands, whereas with the Kindle you need only use one. With the Kindle accidentally turning the page can be quite frustrating, I cant see it happening on the iPhone.

You can watch our buddy Walt Mossberg review of the Apple iPhone 3G in the video below, he mentions the e-book reading capability of the device.

Can Apple with its new iPhone 2.0 software challenge Amazon?