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New Sony Reader: Great tech but far from $100 price and mass consumer acceptance
October 3, 2007 | 9:41 am
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By David Rothman
Will the new Sony Reader PRS-505 at last turn e-book gizmos into more than niche products?
My answer right now is a big, fat No. The main joy-killer, beyond the limited number of books in the BBeB format and the ease-of-use question, is price.
Despite the Reader’s glories, such as the brighter Vizplex screen, most people will find $300 just too much to pay. I know. This is a complex one. Even with Sony’s $50 credit card offer, Robert Nagle discovered this his lit-oriented friends weren’t biting—a topic he may be exploring in a future TeleBlog post. So we’re not talking price alone. But it is a factor. Notice how quickly the $99 readers from TigerDirect sold out during a Fourth of July special? When will that be the permanent price without the paperwork associated with a credit-card-related offer?
E-reader market said to be too small for analysts to track
In today’s Washington Post, Mike Musgrove observes that “so far, people still prefer actual books, finding them easier to use and cheaper than Sony’s $300 device.” Musgrove is far from a Sony basher. He’s just a realist about the price and issues such as the book selection, which, although in the tens of thousands, is still a speck of what you’d find at p-bookstores. Tim Bajarin, a well-known computer industry analyst cited in the Post, like the Reader but shares the price and book-selection concerns. “Sony’s Reader device,” Musgrove writes, “exists in a market so small that analysts don’t even track it.”
So how will Sony respond? According to the Musgrove, Steve Haber, senior vice president of Sony’s digital imaging and audio division, says the Reader is “a great deal” even now. But Haber says less expensive versions of the Reader may appear “as time goes by.” May? That’s key, and I’d hope that that Haber avoided “will” only because he didn’t want price-sensitive buyers to put off purchase of the Reader.
As for book selection, Sony’s new deal with Borders could help on the selection front, but it’still going to be a tough go for both companies with Amazon owning Mobipocket.
Rx for Sony: A production ramp-up to drive down prices—or maybe different e-paper tech?
Now here’s a price-related question involving both the competitive angle and the mass-acceptance one. What if Sony really pressed the pedal to the floor and truly ramped up production of the Sony Reader? Just how low could the consumer cost drop from the current $300, furthering widening the gap between the Reader and more expensive rivals such as Bookeen’s forthcoming $350 Cybook Gen3 and Amazon’s own Kindle, which might sell in the $400s or $500s if the rumors pan out? Could Sony tie up E Ink production at Prime View International, also a Bookeen and Amazon supplier, before the others caught up?
And, to think in really radical terms, suppose Sony were able to try Nemoptic‘s e-paper technology, which takes advantage of the economies of manufacturing infrastructure set up for LCDs? Or does Sony’s relationship with E Ink make that out of the question? Remember, too, the sharp, super-cheap display used in the OLPC laptops. Just how wedded is Sony to E Ink the brand name? How low will price of E Ink-based drop compared to others? E Ink may well be competitive. I’m just raising the question.
That still leaves open the topic of ease of use, one of the issues that might have kept Robert’s friends away from the Sony despite the $50 credit card offer. Will the new auto-sync process—allowing technophobic consumers to start the PC-to-Reader file transfer just by plugging their gizmos into a USB port—help sales more than seasoned e-bookers might think? Make the Reader iPoddish enough for the masses? I’d love for auto-sync to be the little wrinkle that turns the Reader and similar products into gizmos truly fit for the mainstream. But with the $300 price for the Sony and the limits of the related bookstore efforts, even if they’re up to 20,000-30,000 books, I’m just not counting on it.
Meanwhile here’s a reminder to Sony to embrace the .epub format as quickly as possible and work to address the accompanying DRM interoperability issues—so that e-book standards truly happen at the consumer level. Otherwise, with or without Borders’ help, Sony may well lose the content battle to Amazon. Better for Sony to focus on what it does best: hardware—and ideally without a traditional Sony price premium. One positive of the new reader is that Sony isn’t going for a top price within its product category. But $300 is still steep for what consumers expect.
Detail: As usual, my favorite DRM solution is none. But as I’ve observed here before, it’s built into Sony’s DNA.
A little contradiction: Notice I said “said to be small for analysts to track”? Despite the statement in the Post, it isn’t as if the anlaysts are ignoring e-reader devices completely. But, yes, they’re off the beaten path for most of them.
The Carly test: Once again, I’m going to ask Sony for a review unit and so I can try it on Carly, and maybe my sister and brother-in-law. Sony never responded to my request for a review unit of the older PRS-500, despite the TeleBlog’s tens of thousands of readers each month. Hey, guys. My mind’s wide open. I’d like to see how far autosync goes in addressing the usability issue.
Related—from yesterday’s TeleBlog: New Sony Reader buyable today with improved screen, and .epub still looks on the way. Also see Sony press kit and Reader coverage in MobileRead.
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Comments:
A few observations:
1) The price is mostly defined by the screen right now, and that isn’t going down quickly just yet.
2) The sales of PRS-500 were apparently “better than expected”, and that’s with the initial price $50 more than PRS-505. BTW, remember the initial price of iPod?
3) .epub support is being provided by Adobe, Sony can’t do much more than urge them a bit.
4) E-Ink has one advantage over Nemoptic: it’s here and it works. I haven’t heard of any actual commercial implementation of Nemoptic’s tech yet.
Igorsk re Reader: Appreciated your thoughtful comments. My response:
1) Totally agree re importance of the screen price (probably more than $100 of the $300). That’s why I’m wondering what would happen if Sony drove the price down though large-enough production commitments. Still might not be possible because of the limits of tech. But I’ll raise the issue along with the possibility of alternatives to E Ink.
2. While the iPod sold for plenty, the dogs wanted to eat the dog food. E-books are a harder sell than music. Do you have any Sony sales figures?
3. Yes, .epub will come from Adobe. But isn’t it possible Adobe would put the project on the fast track—in a major way—if Sony paid enough.
4. In regard to Nemoptic, I’m talking about Sony looking ahead. As I’ve asked, Just how wedded is Sony to E Ink over the next several years? I don’t know if Nemoptic would be the solution. I’m just asking the question.
Thanks, and keep those comments coming! It’s great to get all kinds of views on the Sony.
David
I agree, David, that price is a huge issue. A couple of months ago, you ran a statistic on how many books the average American reads. First, a lot read zero books. But even readers average something like five a year. You really have to go a long way down the distribution curve to find people who can amortize the cost of a $300 device down to affordable levels. Suppose, for example, I value the benefit of eReading at an additional $5 per book and the average eBook I buy is $1 less than the price of a pBook. That equates to a value of $6 per book. If I read 5 books a year, that means I would amortize a $300 reader over ten years. I fear that’s too long (and that many readers don’t put that high a benefit on eReading (maybe because they haven’t had the exposure)). In contrast, people with iPods probably buy more than 5 books a year. If I read 100 books a year, I’ve still got to come up with a combined value and savings of $3 per book to amortize the reader over one year ($1.50 a book to amortize over a perhaps more reasonable $2 per year).
This is tough economics–and people who read 100 books per year are fairly rare.
Solution–lower prices and the recognition that dedicated eBook readers aren’t the ENTRY solution to eBooks. For many, tablet computers, PDAs, smart-phones, or other devices will serve as gateways. After all, you have to read an eBook to understand its benefits.
Rob Preece
Publisher, http://www.BooksForABuck.com
Rob on Sony: On-target analysis! And for those who don’t know, Rob isn’t just playing economist. He has a background in that discipline! – David
I don’t know about this amortizing the cost of the Reader. There are two things still holding me back:
1) The DRM. I need to know I can crack it and pour the text into a new format if the Reader goes away (at this point, I think only a competing product could do that; Sony now seems serious)
2) The too-high price of ebooks.
You’ve also left an important point out of the mix: the *weight* of books. I’m lugging around William Gibson’s latest. Geez, how I’d love it to be just a *file* in a Sony Reader! Sony might do well to play up that point in ads:
Would you rather carry this? (show a pile of books on a scale)
Or this? (show Reader on a scale) — and point out all those books could be in the Reader.
What’s up with school textbooks? Why haven’t they been “Reader-ized”?
Hi Mike,
I agree about the weight of a pile of books. For me, this is a key advantage of eBooks. Given the choice, I’d rather get an eBook than a paper book because I don’t want my house, suitcase, or laptop bag cluttered with a stack of paper–or one of those monsters by Stephenson or George RR Martin. In my analysis, I gave this advantage a dollar value. How much is it worth not to carry around extra paper? A buck a book? Ten bucks a book? It’ll differ by person, of course. I assumed $5–but your milage may vary.
Agree that DRM and the risk that your library may one day evaporate is a huge issue. I’ve elsewhere given my thougths on what a workable DRM solution might look like (based on public key encryption).
Rob Preece
Publisher, http://www.BooksForABuck.com