Smartphones & eBook Readers: Price = Penetration

Nokia is now making its N900 Linux (not Symbian) based "mobile computer" available for pre-order across the globe. Although there are early mixed reviews of the device, which I have not used, most are generally positive. What then is the outlook for this smartphone by another name? In the US at least it's bleak -- very bleak.

Why do I say that? Mainly because the company is charging $649 (452 EUR). What the heck is Nokia thinking? The company apparently hasn't learned the lesson of the N97. Nokia's "flagship" smartphone, launched without carrier support in the US in June, and was priced at more than $700. It has been a spectacular failure to date. 

Now the company appears poised to duplicate that failure with the N900, chiefly because of the pricing. 

By contrast, Taiwan-based ASUS is set to launch the world's cheapest eReader and shake up the market. The new device features a unique "book-like" design that can be closed and has a foldable spine:

 Picture 8

There are now probably about 10 readers in the market or coming very soon. The ASUS Eee Reader reportedly will be out by the end of the year. Amazon's Kindle 2 (as opposed to the DX) is $299. Sony has already beaten that price by $100 with its recently announced eReader pocket edition ($199). And the Eee Reader will apparently come in at or below £100 (approx. $163). 

Despite the affection many of its owners have for it, the Kindle is not the iPhone and it won't have the ability to resist these cheaper rivals. Meanwhile Apple is going to come out with a tablet of some kind either late this year or early next. That device will be expensive by comparison but it will be positioned as more than an eReader (media tablet) and so may find an audience despite its price tag. One can assume that iPhone apps will work on it. 

But price will largely drive eReader adoption and the sub-$200 price point is the one that will generate mainstream appeal. The "winning device" will be connected, cost $200, offer a color touch screen and offer full Internet browsing. And as these connected readers proliferate the world of the "mobile Internet" becomes more interesting and complex.