image kindlenewsweek Kiplinger’s, the famous American finance magazine, is out with some investment advice in two unrelated articles reflecting the individual opinions of their writers. As loosely paraphrased:

Think about buying the stock of Warren Buffett‘s company, Berkshire Hathaway. But if you’re value conscious like the Oracle of Omaha, then stay away from the $300 Sony Reader and $359 Amazon Kindle, which "cost too much for what they deliver" despite positives such as high-resolution screens.

image "Of course," writes Jeff Bertloucci, a contributing writer, "a book made of paper needs to be recharged—oh wait—never. Plus, it would pass the drop-kick test. But our main gripe with digital-book delivery is the cost. These devices are too expensive given their limited advantages. A portable reader in the $100 to $150 ballpark would persuade us to overlook a lot of drawbacks."

In the eyes of the beholder

Well, Jeff, as with Berkshire stock ($3,857 per share for Class B at closing yesterday), value is in the eyes of the beholder—literally in a way. For a young stay-at-home type who lives near a well-stocked library and can read public domain books and Creative Commons works off a $75 PDA with tiny print, a Kindle might not make sense. But suppose you are in your sixties with bad eyesight, travel around, read constantly and don’t want to lug a dozen books. Then, if your budget allows and you’d enjoy reading E, it might be silly not to by a Kindle or a Sony Reader.

The e-book price angle

"Plus," Jeff Bertloucci writes, "the electronic books themselves could come down in price. Featured titles on Sony’s eBook Store range from about $5 to $19, and Amazon sells most digital bestsellers for $10. Given the significantly reduced publishing and distribution costs, all e-books should cost about $5. Maybe someday."

I’m sure many publishing insiders would challenge that analysis right now. But ironically, if the rival iPhone takes off as an e-reading advice and volume grows sufficiently, then it would be outrageous for e-books not to cost just $5.

Related thought to ponder: The total ownership costs of the iPhone are far higher than that of the Sony or Kindle, even allowing for several hundred dollars in book purchases. But the iPhone is vastly outselling the E Ink machines. Oh, the joys of the multiuse approach. Let’s hope publishers pay attention and piggyback along.

Related: Kiplnger/Price Grabber comparisons of PDA prices (including both new and used devices).

2 COMMENTS

  1. Bertloucci misses something in the value department, at least as far as my Sony Reader goes. The Sony Reader cost $300 plus I paid $70 for a 3-year no-questions-asked warranty, a total of $370.

    Accepting that the average paperback book costs $8, I would need to buy 47 of them to equal the Reader investment.

    Interestingly, I currently have on my Reader 144 books — books that I have never read before and by authors whom I had never read before — and all 144 were free to me (and none are the classics that Sony was offering). And that number doesn’t include those ebooks I obtained for free that I have already read and removed from the Reader (another 77 books). Even accepting that ebooks should cost only $5 each, I’m making a very respectable “profit” — at $5 each the 144 books comes to $720. So the math works this way: $720 – 370 = $350, nearly a 100% profit and still climbing. Even Warren Buffet would like a profit like that!

    Would I have spent the $720 on these books? No, I wouldn’t have because these books were written by authors with whom I was unfamiliar and when I buy books, I buy hardcover only, which means I am more cautious in my buying habits. But now that I have met these authors, I will buy (as I have already done) newer books by some of them in either ebook or hardcover format, thereby contributing to the overall US economy.

    Finally, truth be told, I find reading on my Sony Reader more enjoyable than reading a pbook. It is easier to hold, I can enlarge the type to make it easier to read, it is easier to carry wherever I go, it makes it easy to read multiple books simultaneously, and the list goes on. I love pbooks and continue to buy select titles for my permanent library, but nothing beats ebooks for those toss-away type books (i.e., those that I don’t want or need to keep as part of my permanent library).

  2. No, paper books don’t need to be recharged–exactly. But they take up space in your home or office, gather allergy-inducing dust, increase costs during moves, and can’t be taken with you while traveling.

    For people with infinitely large homes, already-paid cleaning staffs, and zero travel, these problems don’t matter much. Then it comes down to Rich’s point that reading on devices is easier and faster than reading on paper.

    I like the idea of a multifunction device. I’m sure the iPhone is great. But I’m not going to pay a hundred bucks a month for phone service, so that leaves me off their list. On the question of the iTouch vs. Kindle, I’m not sure–will be interested in reading David’s comments. I hope that both will be outrageously successful and that we’ll continue to have competition between distribution channels.

    Rob Preece
    Publisher, http://www.BooksForABuck.com

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