Switched On: Sony plays both ends against the Kindle

Ross Rubin (@rossrubin) contributes Switched On, a column about consumer technology.

Last week, Sony introduced Reader Daily Edition, the latest and most advanced Reader in its 2009 lineup, and attempted to recapture the excitement around the category that it had at the launch of the original Reader but then gave up to Amazon. By adding 3G connectivity to the Daily Edition, Sony's answered the biggest perceived feature gap between its products and Amazon's e-reader.

However, far from playing me-too, the Daily Edition tells quite a different distribution story than the Kindle, from purchasing devices to the content. The $400 Daily Edition (a term that warmly evokes printed books and newspapers without being corny) will join the $300 Touch Edition and the $200 Pocket Edition. Of these, the Pocket Edition has the most near-term potential for success due to its greater portability and low price, particularly in these grim economic times.

Speaking of which, Sony seems to have picked up more positive buzz about its library integration for free book lending than it has for adding wireless to the line. For all the struggles of subscription services, consumers don't have any problems with renting content as long as it's free.

If the Pocket Edition fills in the sub-$200 gap, the $400 Daily Edition (the name of which auspiciously hints that we may see a stronger tie-in with newspapers), occupies a gap between the $300 Kindle 2 and the $490 Kindle DX. Its widescreen display may provide a superior experience for reading, say, newspaper columns. And unlike the Kindle 2, the Daily Edition has both wireless access and a touch screen, although both the Touch and Daily editions dispense with the sidelighting that was in the PRS-700.

One open issue is how Sony will manage to answer Amazon's full subsidization of wireless access, which is justified by Amazon being the exclusive bookseller for the Kindle; although Sony has its own store, Readers also support other booksellers who offer electronic publications in the EPUB format. For now, the compromise is to limit wireless access exclusively to Sony's marketplace while requiring that other books be sideloaded. Openness to competitors is one thing; subsidizing them is another.

Sony, then, will field strong value at both the high and low end of the Reader line, but it is least competitive with Amazon's flagship, the Kindle 2. At $300, the same price as the Kindle 2, Sony's Touch Edition lacks wireless access. Therefore, more consumers willing to pay $300 (but no more than that) will likely opt for the Kindle 2. Those looking to trade up should find the Daily Edition a nice hardware upgrade while those looking to trade down won't have many options for dedicated e-readers that have ready-made bookstores.

Clearly, Amazon will not stand still with hardware development. Assuming Sony can get 3G (or at least Wi-Fi) onto its midrange models next year, it should have a consistently strong hardware lineup and better overall content story than Amazon does today. That will be a lineup that's booked solid.

Ross Rubin is director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.