They're indexing the popularity of e-readers in different MSAs by looking at how many are for sale on secondary markets, as a % of what's for sale on the secondary markets in that city. This seems like a really poor proxy for how popular e-readers are in those locations.
There are several things they're not correcting for:
* The more someone uses their e-reader, the less likely it is to end up on a secondary market - either because you're using it, or you still intend to use it, or you broke it. (This is what happened to my last Kindle - I used it heavily, but eventually something in my bag rammed into the screen and broke it to a point it was unsaleable.)
* Some cities may have a larger volume of items per-capita on a secondary market because people have more to sell. E.g. if you have a larger house with a garage, you probably have more items to potentially resell than someone with a tiny apartment.
* Cities with a lower proportion of smartphone / tablet users might buy more kindles. That doesn't mean they're consuming fewer ebooks.
In economics -- hell, in any empirical field -- it's absurdly hard to draw qualitative conclusions. If you see these often, like in Priceonomics's blog posts, then you should have doubts.
I get Priceonomics is a YC company so we should cheer for them or something, but they're quickly picking up a reputation for making qualitative jumps using elementary work. You don't want to be in that position when you're in the business of analyzing data.
The Kindle is a wonderful device that is already very good and doesn't improve enough to justify upgrading all the time like Apple devices. And it's very cheap, which makes selling old ones not very appealing.
I own a Kindle 3 (with a keyboard) and couldn't live without it. Even if I eventually buy a newer one I will keep that one to leave at home for example, or give to my kids. But sell it? Never.
This post is quite disappointing, as are most from Priceonomics. They are apparently trying to mimic the blogging strategy of OKCupid, but they're doing it very poorly.
If anything, I'd observe from the data that college towns resell their Kindles a lot more because the students are receptive to new/hip tech, collect their data point, and plenty of them move on by reselling via Craigslist, which extracts more value over eBay/Amazon, with some opportunity cost of time (to fulfill the order by meeting in person and what not).
I might be wrong, but Amazon already sells cheaper refurbished Kindles where as Apple does not do the same for iPads.
They do: http://store.apple.com/us/browse/home/specialdeals/ipad
This might make people hold onto them instead of constantly upgrading to the latest version.
So, is someone who paid $250+ for a Kindle just two years ago really going to sell it for $50 or so, when the new models aren't much different?
I plug it in when I want to put a bunch of books on it, I have a light in the case, I only want to read books. No reason for me to upgrade.
I'll upgrade when it breaks or another family member wants one.
I've had an older Kindle for a while now. It's an uncanny relationship. With most of my electronic devices, I can tell you the exact specs, when I got it, and how antiquated it is. My Kindle is different; it feels like a book to me, not a complex device.
Brilliant work on Amazon's part.
That said, that new Nook Simple Touch with the "backlight" could be a gamechanger, at least for me.
...except that Kindles and Nooks aren't trying to compete with the iPad, being completely different types of devices for completely different primary purposes.
While they may not compete directly, if people already have iPads for other reasons, it seems they'd be less likely to buy a kindle.
Another (silly) one: e-readers vs holidays taken in hot places. Maybe people don't buy e-readers in California because they're already somewhere sunny, so they don't take beach holidays? ;)
I'd say ereaders are generally owned by people who enjoy reading.
Ex: Overall literacy rates:
"In 2011, the National Institute for Literacy estimated that 47 percent of adults in Detroit, Michigan are "functionally illiterate," meaning they have trouble with reading, speaking, writing and computational skills."
So Detroit is not likely to be a hotspot for ereader sales.
Also data from Amazon:
(books, magazines and newspapers purchased per capita)
1. Cambridge, Mass.
2. Alexandria, Va.
3. Berkeley, Calif.
4. Ann Arbor, Mich.
5. Boulder, Colo.
7. Salt Lake City
8. Gainesville, Fla.
10. Arlington, Va.
11. Knoxville, Tenn.
12. Orlando, Fla.
14. Washington, D.C.
15. Bellevue, Wash.
16. Columbia, S.C.
17. St. Louis, Mo.
19. Portland, Ore.
In that light, a device that lets me read books instantly is something of a minor miracle, and one of the best gadgets I have ever purchased.
The city I'm working in now doesnt even have a B&N so I am finding new love for my Kindle.
I'm also curious if, since the stats are based on devices being for re-sale if the cities near the top have batter local economies and more people are selling old devices to upgrade to newer ones where in an area with more economic uncertainty folks might be holding on to their current electronics longer and not upgrading as often.
In the interest of full disclosure, we have three Kobo e-readers in the family (Borders liquidation sale $50 each).
Anyway, seems to me that if we really cared about literacy, we'd want a random sample of peeps asked how many books they read last month, not what hardware/software they have on which books might potentially be read!
I own a kindle, but rarely use it b/c between my iPad and iPhone (with the respective kindle apps and other e-Reader apps) there is rarely a reason to carry along the Kindle.
One exception might be if I were going on a long trek in the wildnerness where the extra battery life of e-ink and the kindle offered a significant advantage (along with an absence of network connectivity which would diminis the advantages of the IOS devices).
I will probably buy a new kindle one of these days to try out the latest. My current one is the first generation device which is a bit less ergonomic.
I think my primary motivation for putting down dead tree books is that the e-books I've bought and haven't read are invisible. They don't sit on my bookshelves openly shaming me for not reading them :-O
In Lem's Solaris they have paper books even on space station. (Love Tarkovsky's movie.)
But anyway, just to clarify, I mention that these apps exist because it could completely throw off the numbers as to how many "Kindles" (or "Nooks") there are in a given city. What if SF has tons of people reading Kindle books on their iPads? These devices can't be considered pure competitors to the Kindle (or the Nook), and their numbers are way, way too big to simply disgregard.
Maybe that's largely a personal opinion or maybe most people would agree with me, but either way my point is - yeah, it's not "too bad", and is perfectly fine, but it doesn't mean it's not significantly worse.