Internet May 7, 2009, 12:01AM EST

Amazon's Widescreen Kindle DX: Winners and Losers

As e-book rivals look on and early adopters wonder if they'll get discounts, advertisers who hoped the device would serve ads are left out

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Amazon (AMZN) Chief Executive Jeff Bezos makes no bones in singling out a group likely to lose out as a result of the introduction of the company's new e-book reader: ink sellers. The Kindle DX, unveiled in New York on May 6, features a 9.7-inch screen designed to make it easier to read electronic versions of newspapers, magazines, and educational textbooks.

With a bigger screen than previous iterations, this Kindle is also intended for reading PDFs and other documents frequently printed on paper. If users are reading electronic versions of documents, they may not need to print as many. That in turn may curb demand for the toner cartridges Bezos laughingly referred to in remarks to journalists as "evil companions."

But purveyors of high-priced printer ink may not be the only ones on the losing side of the new Kindle. At least for now, advertisers appear to have been cut out of the Kindle picture. Early in May, when rumors began circulating that a new Kindle was on its way, the advertising industry speculated that it might contain space for digitized marketing messages. Publishers such as The New York Times (NYT) or The Huffington Post news-and-blog site, the thinking went, might be able to channel ads based on a reader's geographic location or characteristics that could be gleaned from their use of the Kindle DX, says Garner (IT) analyst Mike McGuire.

No mention of advertisers was made at the product's launch. "Is there an opportunity for advertising? It wasn't brought up," McGuire says. That likely means it won't happen in the foreseeable future. An Amazon spokesman confirms that no method for serving ads on the device is currently in place.

no deal for existing owners

And what of the owners of smaller, previously introduced Kindle devices? Do they get any discount on the new Kindle, which after all was unveiled less than three months after the most recent iteration, the Kindle 2? "I'm sure some of those people would want the option of having a device that's bigger and has extra capabilities," says Michael Norris, analyst at media researcher Simba Information. According to Jay Marine, Amazon's director of product management, "There's no special deal that we're offering today" to existing Kindle owners, such as a store credit or trade-in offer.

In September 2007, Apple (AAPL) lowered the price on its iPhone by $200 just three months after its launch. At first, Apple refused to offer discounts to existing owners, but later relented, offering them a $100 credit to use in Apple stores.

Some analysts speculated that Amazon initially wanted to wait before introducing the Kindle DX but stepped up its timetable amid rumblings that other companies are due to release their own e-book readers. In recent months, companies such as Plastic Logic and Hearst have talked up their own e-reader plans. "There is a first-mover advantage, and Amazon is feeling the heat of competitors advancing," says Forrester Research (FORR) analyst Sarah Rotman Epps.