Sony Gets a Wireless Reader, Too

As for the hardware devices, Sony's new Reader Daily Edition is obviously aimed at Amazon's Kindle and Kindle DX. It will be able to display 16 levels of grayscale and will be housed in an aluminum body with an integrated cover. Users will be able to read books, newspapers, and magazines in portrait and landscape orientation.

The wireless connectivity, courtesy of AT&T's 3G network, is the most exciting news here, though. Both Sony and B&N are following Amazon's lead, of course, but Amazon's success with the Kindle has also clearly shown that a lot of consumers now expect this kind of functionality at the high-end of the eReader market.

What's even more exciting, though, is that by the time the holiday season comes around this year, users will be able to choose between far more eReaders and eBook vendors than ever before, without having to compromise on the number of available books.

With its five-inch $199 Reader Pocket Edition, Sony will be able to offer the cheapest device on the market, while the seven-inch Reader Daily Edition at $399 is priced to fall between the cost of a Kindle ($299) and Kindle DX ($489).

Unlike other eReader vendors, iRex made the decision to focus almost exclusively on the B2B market early on and focused on this market instead of going directly after consumers. As Brons told us, part of the reason was that the price for first generation eReaders was simply to high for consumers, and in order to jumpstart the business, going after the B2B market was simply a strategic decision. IRex's eReaders, are, for example, often being used as Electronic Flight Bags by private pilots. Brons also stressed that there is a huge market for books for professionals, including manuals, guides, and similar texts.

Today, iRex is also looking into the textbook market and electronic newspapers, though for the time being, the company is still focusing more on the professional market than on the consumer market.

Taking Notes

We think iRex's top-of-the-line Digital Reader 1000 devices are especially interesting because they actually feature the ability to take notes directly on the screen (with a pen - no touchscreen yet, but the company is working on this). When we looked at the Kindle DX and its role in the textbook market, we noted that the absence of easy to use note-taking features made the Kindle less useful in a school setting than Amazon made it out to be.

One thing Hans Brons stressed during our interview was that iRex puts a premium on the brightness of its screens. Adding a touchscreen would mean adding an additional layer over the actual screen, which would reduce brightness.

Brons also told us that iRex has approached (and has been approached by) a number of newspaper companies that are looking to provide their readers with eReaders. iRex is not ready to announce any new deals in the U.S. just yet, though the company is working with a number of large European newspapers already, and the Washington Post and USA Today are also available through iRex.

Color

IRex made a bit of a splash a few weeks ago when it announced (PDF) that it was working on full color readers. Brons told us that iRex was getting ready to commercialize color readers, but that this was indeed a hard problem to solve as iRex doesn't want to sacrifice screen brightness for color, which isn't necessarily a feature that most users would need.

Services for Publishers, But no Store

Brons also told us that iRex is providing publishers with a full range services to get their books onto the iRex platform, though iRex itself is not looking into starting its own store.

We think there is a chance that iRex is missing some opportunities here, though. Publishers might be able to put their books up in an iRex powered store on their sites, but consumers don't go to publisher sites to buy a book. After all, who knows (and wants to know) whether their favorite book was published by a Random House imprint like Knopf or Crown, or by Penguin (itself a part of Pearson)?

Brons acknowledged that Amazon's size must have surely helped it to gather (force?) publishers around its eBook offering, and the integration between the store and the hardware device, bundled with the Kindle's wireless capabilities, surely helped the company to make eBooks and eReaders more palatable for consumers.

It is important to note, too, that the Kindle and Amazon's eBook store isn't currently available in Europe, where iRex has its headquarters and its strongest presence. If iRex could gather enough publishers around its platform and set up a large store, the company would definitely have the potential to challenge Amazon in this market when and if it decides to bring the Kindle to Europe.

Kindle DX and Texbooks

The new Kindle DX is geared towards the textbook market, but Forrester warns that universities will be slow to adopt the technology. The schools that Forrester talked to had no plans to encourage students to use the Kindle and the current pilot project only involves a small number of students (50 at Pace, for example). Of course, this is also a classic chicken and egg problem. Textbook publishers will look at the adoption of the Kindle in schools and are unlikely to invest heavily in this technology unless they see a growing market for their content, while students are unlikely to show interest in eReaders unless all of their textbooks are available in this format.

Looking into the Future: Price, Color, Video - and the End of the Chain Bookstore

Forrester also predicts that the eReader market will soon expand beyond books, especially once eInk technology becomes more mature and maybe even allows for color reproductions. Forrester's Sarah Rotman Epps expects that newspapers, magazines, comics, and business and personal documents will also soon become more important, especially as other vendors besides Amazon start to produce more compelling devices and user experiences.

We received this report just after we wrote about Google's expected entry into the eBook market this morning, but the report clearly vindicates Google's interest in this market. Forrester thinks that other players like Apple, RIM, Borders, and Barnes & Noble might try to enter this market either with hardware products or by offering distribution platforms. Epps, however, argues that while traditional chain booksellers will try to enter the eBook market, their real estate holdings will weigh them down and make it hard, or even impossible, for them to compete with Amazon.

Overall, we agree with Forrester's assessment of the eBook market. Obviously, we are still very early in the eBook and eReader cycle. It will be interesting to see if any new players will be able to establish themselves in the next year or so, or if we will see a convergence between dedicated eReaders and other mobile devices. Wattpad, one of the larger mobile eBook players, just released an interesting metrics report (PDF), and this company sees about 78% of its eBook usage within the U.S. from iPhone users. Consumers are clearly interested in eBooks, but they are also willing to try out new devices. Even though the Kindle has virtually locked up the market today (at least in the U.S.), the business is still small enough to allow other players to successfully enter the market and be able to conquer the mainstream market.

The size increase will go over well with people who need a big canvas - students using the Kindle to read textbooks are a big target audience for the DX. But I can't help but wonder if the newest Kindle is heading in the wrong direction. Portability, after all, is one of the device's most dazzling charms; Kindles 1 and 2 are about the size of a trade paperback, and smaller than most hardcovers.

More Noise to Signal

At the same time, Murdoch also dismissed Amazon's Kindle, because he doesn't want News Corp to cede its content rights "to the fine people who created the Kindle." During a Senate hearing about the future of the newspaper industry yesterday, the CEO of the Dallas Morning News announced that Amazon will take a 70% cut of the newspaper subscription revenues from the Kindle. Those numbers do, indeed, seem rather outrageous, though some might argue that the 30% the newspapers will get from Amazon is still more than the zero dollars they are getting from people who read the paper without the Kindle.

Interestingly, though, while Murdoch heralded the return of paid online newspaper subscription, News Corp also proudly announced that the Wall Street Journal's free iPhone application has been downloaded over 360,000 times. And that app, on a device fully controlled by Apple, gives users all of the WSJ content for free without the need for a subscription.

Senate Hearing

Yesterday's Senate hearing on the "Future of Journalism" made it clear that there are quite a few newspaper companies who would like to go back to charging for their content (while lobbying for tax breaks at the same time). Google's Marissa Mayer and Arianna Huffington managed to put some of the newspapers' hyperbole into some much needed context (Huffington's testimony starts at around 58min here). They argued that while the age of the printed newspaper may be coming to an end, journalism itself will blossom in the future, and that online publishers can indeed make money from their online content by smartly monetizing their traffic (and those who don't want their traffic to come from Google can just add a line to their robots.txt file anyway).

It's Not About the Future of Newspapers - It's about Journalism

We also think that it is important to move away from the question of how we can save the newspapers (easy answer: we can't). Instead, the more interesting question is how we can save good, in-depth, investigative journalism. There are clearly no easy answers for how to save the newspapers and still be able to finance good journalism, and we have doubts that charging for online access is a viable model. Users have clearly voted against this, and even if a paper wanted to charge, users could just head to another paper that decided to go with an advertising-based revenue model.

Textbooks

As we predicted earlier this week, Amazon is aiming this device at the educational market and has reached deals with three major textbook publishers: Pearson, Wiley, and Cengage Learning.

Newspapers

Amazon also announced that the New York Times, Boston Globe, and Washington Post have signed deals with Amazon and that these papers will begin trials with reduced prices for Kindle DX users who agree to long-term subscription commitments later this summer. It looks like these discounts will only be available to users who live in areas where printed versions of these papers are not readily available.

During today's event, the New York Times' chairman, Arthur Sulzberger Jr., argued that the new Kindle finally offers "the same satisfying experience as the reading of a printed newspaper." It remains to be seen, though, if newspaper readers are indeed clamoring for a device that simply copies the experience of reading a traditional, dead-tree newspaper. It is also important to note that Sulzberger called the new deal with Amazon an "experiment," and the success of this experiment will surely also depend on how much of a discount on the Kindle the papers are willing to give to their readers.

Not a Game-Changer

Judging from what we have seen so far, we don't think that the Kindle DX will be a major game-changer in the eTextbook market or for the newspaper business. Besides the bigger screen, there is nothing really new in the Kindle DX, though having a native PDF reader will surely be useful to a lot of users.

The newspapers' discount offer seems a bit timid, to say the least (though we still don't have all the details yet). And we still have serious doubts that the Kindle is the ideal device for reading textbooks (though we have to admit that some of our readers are more enthusiastic about a large-screen Kindle for eTextbooks than we are).