msnbc.com staff and news service reports
updated 5/6/2009 7:27:37 PM ET 2009-05-06T23:27:37

Amazon.com Inc. hopes a bigger version of its Kindle electronic reading device can be a hit, even if it's more expensive, and the company is aiming it in part at college students who are eager to save money on their textbooks.

Since the Kindle debuted in late 2007, it has jazzed many users and technophiles, but electronic readers from Amazon and rivals such as Sony Corp. are still in an early stage. Amazon has not disclosed Kindle sales figures, and the publishing industry has said e-books account for less than 1 percent of book sales.

Now, by offering the larger, $489 version of the Kindle DX and the smaller $359 Kindle 2, Amazon will try to open more avenues for digital versions of books — and other kinds of content. The New York Times, The Boston Globe and The Washington Post plan pilot programs in which they will offer the new Kindle at a discount to some readers who sign up for subscriptions to read the news on the device, the way cell phone providers subsidize phones.

In an interview, Amazon founder and Chief Executive Jeff Bezos said that because the newest Kindle has a 9.7-inch screen, it will be better suited than the 6-inch regular Kindle at showing "complex layouts" in everything from cookbooks to travel guides.

"Things like those that have a lot of layout, structure, look really good on a big screen," he said on the sidelines of a press event Wednesday at Pace University in New York.

The Kindle already had features that could aid textbook reading, like the ability to highlight and bookmark passages. Users could tap the Kindle's typewriter-layout keyboard to look up words and annotate text. But besides a larger screen, the new version also offers more data storage — room for 3,500 books instead of 1,500 on the Kindle 2.

Three textbook publishers — Pearson PLC, Cengage Learning and John Wiley & Sons Inc. — have agreed to sell books on the device. Collectively, they publish 60 percent of all higher-education textbooks, Bezos said.

At least six universities have agreed to run Kindle pilots in the fall — Pace, Arizona State University, Case Western Reserve University, Princeton University, Reed College and the Darden School of Business at the University of Virginia. The schools will work with publishers to make sure books assigned for courses are available in the Kindle format, and some colleges might subsidize the devices for their students.

Case Western President Barbara Snyder said the school will equip 40 students with the new Kindles to study their effects on how they read, take notes, work in teams and retain knowledge. Snyder said she was not sure who would be paying for the Kindles, but that the students would not be.

She believes the device may enable students to get textbook content more cheaply.

Indeed, for students, the biggest advantage could be the lower cost of electronic textbooks. Reading material on the Kindle is consistently less expensive than printed versions, with new releases of mass-market books typically costing $10, for example.

A 2005 Government Accountability Office report said the average cost is $900 per year for students at four-year public colleges, though the textbook industry argues the figure is closer to $625. Typically the prices are high because publishers are trying to capture as many sales as possible in the first year of release, before students can buy used versions.

The Kindle's size and weight — 18.9 ounces, which is almost twice as heavy as the Kindle 2 but lighter than most laptop computers and paper textbooks_ could also be appealing to students on the go.

Amazon won't be the first to venture into the digital textbook realm.

CourseSmart, a Belmont, Calif.-based company started by several textbook publishers, is already trying to cut down textbook prices by selling digital copies to students, who can download or view them online.

An August study by Make Textbooks Affordable, a joint project of a number of student advocacy groups, was critical of CourseSmart's digital textbooks, however, saying that they were still too costly and that most of the ones they surveyed expired after 180 days.

Bezos believes electronic versions will eventually dominate, though. "It just makes so much sense," he said.

Whether portable, electronic versions of newspapers make sense will remain to be seen. But publishers that have struggled to get people to pay for digital versions of news stories in Web browsers are exploring the Kindle and similar devices.

"Ultimately, this is about providing our readers with what they want and need," said New York Times Co. Chairman Arthur Sulzberger Jr., who joined Bezos on stage for the event.

Josh Martin, a Yankee Group analyst, is skeptical of that.

"It's not as if the mass market is saying, 'I'm desperate for a newspaper.'... That seems to be the problem they're trying to solve, but that's not the issue. The issue is timeliness of delivery of the news, relevance to the user," he said.

Martin believes that, especially in the case of newspaper readers, the benefits of the Kindle DX don't justify its high price.

When the Kindle 2 was unveiled, NPD Group analyst Ross Rubin predicted that for e-book readers to reach broader audiences, the price would have to come down — something he didn't expect to happen until must-haves like textbooks became available for the devices. Since the Kindle DX actually costs quite a bit more than the Kindle 2, "it makes sense to explore ... other forms of distribution, such as subsidization by newspapers," Rubin said.

Bezos said another potential improvement in the Kindle — a color screen — is being explored but "many years away from commercial readiness."

"The electronic paper display we're using now, that was in the lab for 13 years," he said.

Amazon shares rose 9 cents to close Wednesday at $81.99.

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