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amazon-kindle-2-ebook-readerWhat happens when an obsession with the latest, greatest gadgets meets an effective marketing campaign?

A tech dilemma, that’s what. Step into my world:

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Let me state for the record that I was a gadget guy long before being a marketing guy. The list of technology I’ve owned reads like a stroll through a geek museum

- Commodore 64
- Atari 2600
- Okidata laser printers
- HiFi VCRs
- Fujitsu cell phones
- MP3 players made by … Intel.

Put it this way, while living in Seattle during the dotcom boom, I almost bought a Palm Pilot via Kozmo.com.

Sometimes it’s great to be the first guy on the block to have the latest technology. I got an HD DVR cable box on the first day it came out, and couldn’t live without my Nike+ iPod chip (which I can use on any of the four MP3 players I own).

Sometimes, you pay the price. Case in point, my HD-DVD player, which I purchased 3 months before they declared the format dead.

So as a tech geek, I always have a running list in my head of cool new gadgets that I’d like to own or upgrade. It might be one of those $70 rabbit wine bottle openers, or wondering if a new 20″ glossy monitor would defeat the purpose of having a minimalist laptop setup in my small apartment. So if you’re like me, you add it to your mental checklist, and as you go about your day to day life, you do a little research.

As I’ve grown older and wiser with my technology purchases, I’ve begun to wonder how much marketing has an effect on what I buy.

Right now, two compelling gadgets receiving lots of buzz have cropped up on my radar:

1) The Amazon Kindle 2 eBook reader
2) A new breed of mini laptops known as Netbooks.

Both come in at an identical price point: $350. What’s interesting is that a $350 eBook reader seems extremely overpriced, while a $350 computer appears to be a tremendous value. This week we’ll focus on the Kindle.

oprah-effect

According to Wikipedia, the Kindle launched in November 2007 at a price point of $399, with 88,000 books available. It sold out in only five and a half hours and the device remained out of stock until late April 2008.

By August, some analysts estimated that Amazon, who does not release sales figures, would sell 378,000 units in 2008. But they didn’t count on one thing: The Oprah effect.

On October 25, the Queen of Daytime called the device “my favorite new thing in the world,” handed one out to each audience member, and punctuated her ringing endorsement with a $50 off coupon code. Analysts later revised their numbers, estimating that Amazon had sold 500,000 Kindle units, and could have sold more over the holidays had they not run out of stock, predicting a $1.4 billion market by 2010.

Anyone that is skeptical about the Oprah effect can take a look at a chart on Google trends to see the spike in internet traffic.

Tracking Kindle mentions on Google after Oprah mention

To start the hype machine all over again, Jeff Bezos premiered the follow-up version, the Kindle 2, on February 9. Like any good electronic device, it was thinner, lighter, and faster.

Let’s take a look at the marketing angles Amazon is attacking with:
1)    Design
In looking at the Amazon Kindle 2, it’s obvious that Amazon’s Lab126 design team has its roots at Apple. It’s white body, aluminum back, rounded edges, minimalist design, and thickness of just 1/3 of an inch, make it the lovechild of a polycarbonate Macbook with an iPod touch. And one look at Amazon’s opening video, with it’s soothing music and mellow announcer, should have Apple’s TV commercial’s creative team screaming for their lawyers.

http://i.gizmodo.com/5149704/does-the-kindle-2-pass-the-applebraun-design-test

2)    Content
Remember the 88,000 books at launch I mentioned? That’s now up to 230,000 and increasing every day. Amazon’s massive distribution power gives users the faith that they’re not buying into a dying technology.

3)    Premium placement
Let’s see… what would I do if I wanted to get my product or service in front of 50 million people every month – 75 million during the holidays? Well, I’d put it front and center on Amazon.com’s home page. By the way, according to Compete.com, that number is double the amount of traffic as Walmart.com.

Amazon vs. Walmart Traffic

4)    Video Guided Tour
They do a great job of walking you through all the features, showing a woman relaxing on the beach with her new eBook. Hey, who doesn’t like going to the beach.

5)    Testimonial Videos
Next up is the classic marketing tactic of testimonials – showing how much other people love it makes you wonder, hey, why don’t I have one of those too?

6)    Star Power
In addition to Oprah, what other company can roll out video testimonials from Nobel Laureate and Pulitzer Prize winner Toni Morrison, bestselling authors like James Patterson and Michael Lewis, powerhouse brand names like Martha Stewart, and even tech evangelist Guy Kawasaki.

guy-kawasaki-kindle1

The sell is very effective and starting to win me over, although I find it interesting that the testimonials feature 7 women, mostly in the their 40s and 50s, and 5 men, about the same age. They definitely don’t seem to be aiming toward the twenty-something hyperinfluencer / blogger / Facebook demographic.

The only geek angle is Kawasaki, who talks about not needing to sync and dock the device. He talks about instant on. He talks about not needing to pack 4 magazines and 5 newspapers on a plane. Then they do a high tech, slo-mo video showing that there’s no damage if you drop it. Pretty cool. They use new buzz words like Whispernet, and throw around stats on EVDO, storage, battery life, and supported document formats. They’re whipping up a marketing frenzy.

So I guess I’ll just pull out my credit card, and …

WAIT!!!  WAIT!!!

I need to ask myself a question. When the heck am I going to use this thing!?!

- My New York City commute consists of a 5 minute walk, a 10 minute subway ride, and another 5 minute walk. I can’t even get through 3 pages of a newspaper, let alone a novel. And I usually don’t retain any information anyway since I’m simultaneously listening to a podcast.

- I’m at a computer for 9 hours a day and my laptop is at arm’s reach at night, so I certainly don’t need it for blogs or newspaper access, especially since those items cost money on the Kindle and don’t come in color.

- When I reach for casual reading material, it’s usually in the form of a magazine, not a book. There’s still something to be said for the award-winning design of Wired or the glossy photos of Runners’ World.

- With the economy hitting the publishing industry so hard, magazines can boast… hey! we’re also just 1/3 of an inch thick! Packing 2-3 issues on my cross country flights to San Francisco isn’t so bad anymore.

- And the beach? Even with SPF 30, you’re not going to find me laying in the sun for any extended period of time. And I notice they didn’t have a “sand in the keyboard” or “whoops, there’s high tide” test on video.

- And right now my iPhone is pulling at my pant leg saying, What about me! What about me!

And the most telling fact?

This item has made my Gadget Lust list, despite the fact that I have never seen one in person.  Now that’s marketing.

So am I writing off the Amazon Kindle 2? No way. I have no doubt the shift to digital will continue at a breakneck pace, and electronic content will continue to flourish. I am confident that the Kindle will do extremely well.

But for now, I’m going to hold off for a bit, add it to my electronic wishlist, sit back, and enjoy some more of the marketing show.

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Remember to tune in next week to see if a new netbook can beat the marketing hype and become the next object of my Gadget Lust. How do you make sure of that? Subscribe to my podcast, or my blog. Or both. Do it now!

You can also follow me at twitter.com/hopkinsonreport.


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