I don't know if that will affect the eBook group. That division is now housed entirely in the U.S., has been profitable, and has begun its international campaign. I hope Sony will see the wisdom in continuing it. To surrender the field to Amazon would be a defeat Sony could not afford.
And yet: Could it all be for nothing?
There are three recent signs -- as well as a total wild card -- that point to possible dramatic changes in the eBook-reading hardware landscape.
The first is Samsung hitting the pedal hard on OLED screen manufacturing. There have been exciting rumblings that Samsung intends to put these incredible OLED screens in notebook computers. Samsung recently displayed a folding OLED prototype screen.
OLED screens are a huge deal. This is what I previously wrote:
This past weekend, I was in J&R. I made it a point to go see that OLED TV Sony's Howard Stringer has bragged and bragged about.
It's no brag!
You have to see it for yourself. Color, contrast, brightness, and viewing angle just shame every other television on sale.
That's a side view. The screen really is shockingly-thin. (Of course, that's a bit of a gimmick, isn't it? If you add the electronics that are separated into the base to make it wall-hanging, there goes the thinness, right?) Now, what happens when Sony finally nails the production run of OLED screens? Would a six-inch one finds its way into a future model of Sony Reader? It'd probably be expensive as all hell, but that'd be only for the first model (targeted to businesses and publishing professionals). Prices would eventually drop.
Let me say one more thing about that Sony OLED TV that pertains expressly to eBooks: it would make eBooks on par with high-quality full-color printing that's now available. In fact, it'd be higher quality than what we see in weeklies such as Time and Newsweek. We're talking high-quality full-color Japanese magazine printing (which, if you haven't seen that, you should!).
The second development has been Hewlett-Packard demonstrating color eInk screens.
Truly, the first device that can do color eBooks will change things forever.
And that just might doom all existing dedicated eBook readers!
For here's the third piece of this puzzle: Amtek Rumored to Show Slate Netbook at CES 2009
The specs are familiar to netbook fans — Intel Atom N270, 512MB RAM (upgradable to 2GB), 80GB HDD, 10.2” XGA TFT(1024*600) — albeit with less RAM and hard drive space than we’re used to seeing these days. The touchscreen may make up for that, if it brings the awesome.
Those specs just kick the hell out of all current eBook reading devices. And it has a color and touch screen.
Throw Adobe Digital Editions on that and it's immediately ePub Heaven.
And, of course, it's not only an eBook reader. It's a full-fledged portable computer in which eBooks are only one application.
Let's say it comes at a premium price of US$700.00. That's twice the price of a Sony PRS-505 and $300 more than the new touchscreen PRS-700.
Suddenly the entire eBook reading equation is changed. It's no longer, "I need this small device that's made for eBooks."
It becomes, "I can get this small computer and also have eBooks."
I've argued since I first saw it that the Sony Reader is the absolute ideal size for a portable device:
The Oh. My. God. Moment came in picking it up. This is a masterpiece of design and engineering. It is what a totable computer should be. This is what the Nokia 770 and all UMPCs should be like. Just this exact size and thickness. This is science-fiction come to life. It is worth your time to get to any store that has it just to hold it.
I still believe that.
This puts Sony in a tight corner.
1) It can find itself -- as Amazon will -- with eBook hardware sales going to zero by the end of 2009
2) It can go All Hands On Deck, cross company boundaries, and quickly change course from a dedicated eBook device to the best damned portable computer available.
And what's the Wild Card in all this?
Pixel Qi, which brags it has revolutionary screens that will basically run on electrons by osmosis instead of the greedy sip-sip-sip of current technology.
Someone is going to put these pieces together:
1) Sony Reader-sized touchscreen computer
2) Revolutionary screen
3) Included Adobe Digital Editions software
Will it be Apple? Hewlett-Packard? Asus? MSI? Amtek? Or Sony?
It will take just one company to start the ball rolling. Just as it did with Asus and the original EeePC. The pile-on quickly followed, with every manufacturer leap-frogging one another, culminating in the Samsung NC10 which gets a startling battery run-time compared to all the rest.
Amazon wouldn't really care if its abominable Kindle sales went to zero. It could release a Kindle Reader app and still make money from selling eBooks (although I'd quickly expect those $10 prices to go bye-bye). Amazon would doubly clean up because it also owns MobiPocket, which already runs on conventional computers.
The dying dinosaurs of print wouldn't really care because they're selling standardized software now -- ePub files. They don't care what reads them -- Sony Reader, desktop Adobe Digital Editions, or Stanza on an iPhone -- they would still make sales.
This leaves Sony very vulnerable. It also threatens with extinction all the other dedicated eBook devices out there, such as the ECTACO jetBook and the BeBook.
Next year really is going to be the year everything changes for eBooks.