I was watching a video of Scoble interviewing Tim O’Reilly in which O’Reilly talks about the Kindle and his belief that it isn’t doing very well. O’Reilly ascribes that to the locked down software (i.e, novels) that ship with the Kindle.
Certainly early adopters don’t appreciate DRM’ed media, but it’s possible that there are other factors at work here. In my own analysis, the Kindle must do one of the following to be successful:
a. meet an unmet need – for example, travel comparison websites or online photo galleries
b. outperform an existing product by orders of magnitude – digital cameras comes to mind here; or
c. Be so cheap that the advantages of an existing product are completely nullified.
Those are the only USP’s that matter.