Blog Post

IRex Exec Won’t Rule Out Carrier Subsidies For New E-Reader

To hear Kevin Hamilton, the North American CEO for IREX Technologies, his company is talking to just about everybody about every possible scenario for the new iRex Digital Reader 800SG. Still, I was surprised during an interview from Germany (where he was attending the Frankfurt Book Fair) when he told me not to rule out carrier subsidies to support sales of the $399 device despite reports that U.S. 3G partner Verizon had said no to something like its support of netbooks: “I wouldn’t rule that out. Those discussions have been had.”

It’s not just Verizon (NYSE: VZ). Like Amazon’s new international Kindle, iRex, which is already in Europe with other models, wants its 3G device to be usable globally. It will be U.S. -centric when it launches in the next few weeks, but it has an integrated *Qualcomm* Gobi chip that Hamilton says technically can be used in any market anywhere in the world pending roaming agreements: “We’re talking currently with virtually every other network carrier in the world and there’s every business model under the sun that’s being discussed. It’s amazing the diversity of approaches that we’re seeing from Europe to Asia to South America.” Amazon (NSDQ: AMZN) is relying on AT&T (NYSE: T) to manage its global roaming.

What’s the most interesting so far? “Creative subsidy models are probably the most compelling. Other operators are coming up with different subsidy models. What might be different is they might subsidize it without a data plan. With the netbook, you have to subscribe for 24 months for a $40-a-month data plan. I think there’s a model that might be embraced by other operators, which says we know we’re going to get the data traffic and the device can’t be used without our network so let’s just use it on that basis.

The iRex strategy of being the anti-Kindle fits right in with Verizon’s new “IDon’t-Droid Does” campaign (although the i-prefix is a bit problematic). Will iRex have an app on the Droid? Some of its agreements for subscriptions already include the ability to move content to smartphones. Hamilton laughed when asked about that: “We’re talking about a lot of stuff right now. Verizon’s quite anxious to be involved with this, They’ve been quite aggressive in what they want to do with us.”