Analysis: Larger Kindle Reader Coming

Going Beyond Books

Amazon's Kindle eBook reader has, sorry for the pun, caught fire with readers. The Wall Street Journal now reports that Amazon is expected to release a new, larger version before the end of 2009. OK, great, you say, but the current size is actually an attraction so what's the big deal?
 
Well the big deal is this: the current 6" display is a bit too small to make newspapers and magazines viable. Yes, you can get the New York Times or the Wall Street Journal or Atlantic Monthly on your Kindle. And it works pretty well. But to be able to scan the variety of material in a newspaper or magazine a larger screen is desirable (more articles listed per page, more layout flexibility).
 
And those larger screens, of the electrophoretic variety Kindle uses, are about to roll off production lines in larger sizes. We expect the Kindle 3 to have a 10" diagonal display or thereabouts. A 10" display would:
 
. Have about 3X the screen size in sq. in. as the current product -- that's a lot more words/headlines and a better word/image balance
 
. Allow Amazon to make a device that is about 8.5 x 6.5" in size -- only slightly larger than the current 8" x 5.3"
 
Other companies are working on other ways to have large screens and small size. EInk, HP Labs and Arizona State have a flexible screen. Samsung has shown a rollable screen.
 
And there are multiple players working on screens for the market shown by Kindle and Sony with its similar eBook reader. Plastic Logic, iRex and Liquivista have various ways of building thin, low power, low cost displays. Some of these technologies can go beyond grayscale to color.
 
We believe around 6 million readers will ship in 2010, based on various hints that around 1 million Kindles and Sony Readers were shipped last year. That just over a 100% compund growth rate which is hardly unheard of. Getting there will depend partly on technological advances and partly on price. When the units go below $200, Katie bar the door. For that to happen, production must ramp up, and that is happening now. Production must ramp up because a lower price could easily be sustained with the added revenue from book and magazine sales. There's just no reason to cut price now when displays are supply constrained.