Amazon launches $489 large-screen Kindle

Amazon amzn will begin selling a jumbo-screen Kindle electronic reader this summer. But the book is still open on whether the students and newspaper readers that Amazon is targeting will embrace the Kindle DX's $489 price tag — or whether the device will help fortify the ailing media business.

The DX has a 9.7-inch display, vs. the 6-inch screen of Amazon's Kindle 2 model. The larger screen makes reading electronic versions of newspapers, magazines, textbooks, even sheet music, more palatable than on the $359 Kindle 2.

The DX is better for reading personal and professional documents that have charts, tables and graphs, Amazon CEO Jeff Bezos said in an interview after the unveiling of the device here.

Is the price worth it? "At $489, that's a lot for a consumer to bear," says Ross Rubin, director of industry analysis at researcher NPD Group. Avi Greengart, mobile devices research director at Current Analysis, agrees: "Broadening the product line is usually a very good thing. But in this case, they're broadening the line up rather than down. And the line started at a very high price."

Bezos concedes that Kindles are "very expensive to manufacture." But he says, "They are not expensive to own." His reasoning: Kindle owners don't pay any fees associated with the cellular Whispernet service that lets them search for and fetch purchased books and periodicals from the wireless Kindle Store in less than a minute.

Still, Amazon and its partners are experimenting with cellphone-like pricing models. The New York Times, Boston Globe and The Washington Post are planning pilot programs this summer to offer the Kindle DX at a reduced cost to customers willing to commit to long-term subscriptions. These will be customers who live in areas where same-day home delivery isn't available. Bezos says to stay tuned for details.

Much has been made of the role electronic readers such as Kindle (or coming rivals) might play in helping newspapers and magazines.

Edward Atorino, media analyst at The Benchmark Co.,says Kindle DX "won't move the needle for companies with multimillion-dollar revenues. It'll take a long time to mean something."

Scott Anthony, president of Innosight, an innovation consulting company, says no "individual platform can be the savior for the (newspaper) industry. But it presents possibilities for those who think in new and different ways."

Adds Zachary Seward, assistant editor of the Nieman Journalism Lab at Harvard: "There's about $2 million in revenue now coming to The New York Times and Amazon together from subscriptions on the Kindle. ... But there's a ceiling. The age of current Kindle users is about the same as for newspaper readers."

Going to college

The new Kindle may get a lift from campuses. Arizona State University, Case Western Reserve, Pace, Princeton, Reed and the Darden School of Business at the University of Virginia will launch trials to make Kindles available this fall to students.

Amazon also struck deals with textbook publishers Cengage Learning, Pearson and Wiley, which plan to sell textbooks through the Kindle Store. Could DX be a game changer for textbooks? "It could," says Rik Kranenburg, president of McGraw-Hill's Higher Education group. "What's good about it is raising the profile of e-books. We're trying to figure out what works."

Electronic versions of best sellers sold through the Kindle cost less than $10. Subscriptions to magazines and newspapers costs $1.25 to $14.99 per month. Bezos says e-textbooks will almost certainly cost less than their physical counterparts. "Physical textbooks get resold as used textbooks five or six times after the initial sale," he says. "The publisher has to capture all that value on that first sale. There's a real opportunity here to have a very good business for textbook publishers, and at the same time lower the prices of textbooks for students." And students won't break their backs lugging books.

Though larger and heavier (18.9 ounces vs. 10.2 ounces) than Kindle 2, the DX is about a third of an inch thick. In most respects, the devices are similar. Both are white and share a tablet-shaped design. Both use gray-scale E Ink technology. Both let you look up dictionary definitions and make annotations. On Kindle 2, various buttons flank the screen; the buttons are only on one side on the new model. And the DX can hold up to 3,500 books, vs. 1,500 on Kindle 2.

The DX has an iPhone-like accelerometer that changes the orientation of the screen when you rotate the device. It can read pages in the Adobe PDF format; you need to convert those documents to read them on Kindle 2. Amazon says the battery life (up to two weeks with wireless turned off) is the same on Kindle 2 and the DX.

Bezos says Kindles with color displays and video remain elusive long-term goals. "We'd love to do it. I've seen (color) in the lab, and it is still years away. ... With electronic paper displays, the refresh rate is not acceptable for video."

Bezos remained tightlipped on Kindle hardware sales. But he says of books that have a Kindle version, 35% of sales are of the Kindle edition. That, Bezos says, leaves him "totally astonished."

Contributing: David Lieberman