Shanda’s “Bambook” e-Reader to Launch in Private Beta

The following is my latest post on Digital East Asia.

QQ Tech and various other sources have reported that Shanda Interactive Entertainment Ltd.((ADR) NASDAQ: SNDA) is about to launch a private beta of its e-book reader product, Bambook.

The product site has already gone live and the private beta will start on August 12. The beta testers will be limited to 3,500 users, who will enjoy a special price of RMB 998 (US$145). Any registered Shanda users can apply to participate in the beta.

Bambook has Wifi built-in and supports all three of the Chinese 3G networks through external expresscards which will have to be purchased separately.

According to QQ Tech the OS will be based on Google Inc.’s (NASDAQ: GOOG) Android, but it also says it’s based on the Palm WebOS — now part of Hewlett-Packard Company (NYSE: HPQ) — which sounds confusing to say the least. When looking through the product specs on the Bambook website, no mention is made of the OS.

Probably the most novel feature is an optional solar charging accessory, which makes the product always available on-the-go. Of course we’ll have to see more details of this accessory to see if it is practical in actual use.

If you clicked on the product site link, you’ll probably notice some subtle similarities in design to Apple’s website. I think the bookstore section reveals the Apple influence even more, as it looks iTunes inspired. The actual content offerings are based on Shanda’s strong online literature presence, which boasts “more than 3 million titles, and more than a million online writers adding 100 million words of original content daily”.

While Shanda is obviously comparing Bambook to, Inc.’s (NASDAQ: AMZN) Kindle in hardware design and features, the offerings are really quite different. Shanda’s online literature properties own rights to some big name authors, but my understanding is they are by and large driven by user-generated content, such as fan-fiction. A casual look at the bookstore suggests majority of the books are such works, which would be updated daily / weekly, so it’s very much a subscription type of consumption.

While there are some classics and some contemporary books by professional writers, the offering seems quite limited. For instance, I did a search for the 14 novels of Jin Yong, arguably the best-selling Chinese author ever, and I only found tons of fan-fiction (maybe they need a better search function). Kindle, on the other hand, is very much about New York Times bestsellers. I do think there’s a fundamental difference in the business model.

Which brings me to the issue of price. While QQ Tech contends the RMB 998 price-tag is much lower than competitors’ offerings, which easily go as high as RMB 4000 (US$ 580), I still think it’s too high. It’s about the same price as the Kindle and Barnes & Noble, Inc.’s (NYSE: BKS) Nook, which means if you look at it in purchasing-power-parity terms, it’s significantly more expensive than the Kindle. Fundamentally, I don’t see people spending RMB 998 to get a single function device with a black and white screen, and which is really only good for reading fan-fiction. Of course, pirated books would be a big use case – but even then, physical pirated books sell for RMB 10 (US$1.4) on the street, so the price gap is pretty substantial – a Kindle is about 15 times the cost of a paperback, while the Bambook would easily be in the 50-100x range. Which is why Shanda is probably doing such a small beta.


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