They are "probably" right about the saving money thing if you account for long term; many publishers haven't put textbooks on Kindle, but that will probably change come Fall if Amazon holds up their end of the bargain. The problem, of course, is it will take between two to three years before a college student has actually "saved" money. By that time, it's very likely that the screen on the Kindle has broken, or there's something much better on the market.
Realistically, college kids don't have $500 dollars to put down on something that won't actually save them money for two to three years, and parents aren't going to see this of much of an investment because it's just too new. As far as textbook e-readers go, the rumored $200 touchscreen Android netbook seems like a better solution, because in addition to reading books, you can get applications. If I was going to blow $500 for a e-reader, I would hold out for the rumored Apple tablet, which is expected to be just a little more (and, I'm willing to bet, will be capable of running the Kindle application like the iPhone and iPod Touch).
Sure, it's nice that the Kindle can now read PDF's; and that rotating screen is a pretty nifty feature that is sure to make all your friends say "cool," but that's not enough to get me to pay over $100 more. I was actually expecting a price drop, not a price hike--I guess they just assume that if you enjoy reading then your not one of those poor saps out of work, because your smart enough to keep your job during the economic crisis?
What does the Kindle need to win me over (in five easy steps)?
First, drop the price. $200 is more realistic. I read that it cost about $190 for Amazon to make a Kindle, but the hardware isn't where their profit is--it's the books. They are making a pretty penny selling things that cost basically no money to produce, sell or ship.
Second, give it a touchscreen! You want college kids to use this like they would a textbook? Students highlight textbooks! Sure you can use the highlight/bookmark feature, but that's hardly interactive or easy to do.
Third, make the experimental features REAL! A functional Web browser shouldn't be "experimental." It should be a real, fully operational feature that sits on the home screen...not tucked away in a less visited place. The same can be said of the MP3 feature, which is really quite lousy--you can't even browse songs, for crying out loud! You'd get a better MP3 player off some street vendor.
Fourth, give it a light. I'll be honest, I tend to use my iPod Touch more than my Kindle when I'm reading in bed. How hard is it to put a little back light on it? The iPod Touch is so much more piratical for night time reading.
Fifth, again, get the price down. If they can't do this by dropping the price then find other ways. Like users get $200 if they subscribed to the NY Times or WSJ for a year or two; or initiate a Kindle loyalty program that let's Kindle first and second generation users turn in their old Kindles for an upgrade at a reduced price.
I love the idea behind Kindle--I love my first generation Kindle. I just hate the price.