Amazon’s Kindle: I’ll Wait For Apple

November 20, 2007

In the midst of this new tech bubble, old Web 1.0 business models are being revived: now we have Amazon’s Kindle: a dedicated hardware “eBook” reading device.

For a few years I worked for Gemstar eBook group, formed from the acquisitions of Silicon Valley startups Softbook Press and Rocket eBook back in the late nineties. The division was shut down around 2002.

The biggest difficulty with a dedicated eBook device is a classic “chicken and egg” problem. Customers aren’t that into buying a new device if it doesn’t have tons of content, while publishers aren’t interested in freeing up their content until there’s an installed base of users. DRM exacerbates the problem. Publishers, afraid of pirated content, want everything for sale, believing that “free reading material” would decimate content sales (it would), while customers become annoyed when they can’t leverage all the “free reading material” they already own or find on the Internet – after all, eBooks are “just” text files.

Gemstar tried to please the publishers first, resulting in a device that seemed “crippled” to the consumer. Amazon’s Kindle strategy looks largely the same.

One way around this “chicken and egg problem” is for eBooks to become just a feature of a device that already has a huge installed base – and that’s where Apple comes in.

Someday, I’m convinced we’ll do the majority of our reading on thin, tablet like devices. “It” is basically a portable touch screen as seen on Star Trek or the constantly refreshing newspaper of Minority Report. It’s a portable computer – a “multimedia device” that holds all our music, videos, and accesses the web – but just happens to be very easy to read on.

Apple is already 90% there with the iPhone and iPod Touch. We may soon see a super-light MacBook with a thin multitouch monitor, or an iPod Touch in a larger form factor (Rex Hammock has a good mockup). Either device would obliterate any need to purchase a dedicated hardware eBook reader.

Also consider how Apple has already developed a digital content distribution system for selling music and video through iTunes. All Apple has to do is flip a switch to sell PDFs or rich text files through the iTunes Store (with DRM if the publishers demand it). Subscriptions to magazines or newspapers could be sold just as podcasts and television shows are currently.

The entire “eBook” business model would be yet another selling point feature of the newest iPod or portable Macs. Publishers would sign up to distribute reading material for sale via Apple, knowing the huge appeal of the iPod and fear of being left behind.

I’m looking forward to playing with a Kindle in the flesh, but am not likely to buy the device. Even the best hardware can be sunk by well-meaning, but flawed business models. While Amazon may not consider Apple’s iPod or MacBook the Kindle’s competition today, all signs indicate that this will be the case from the customer’s point of view, in the near future.

Comments

  1. Stefanie says:

    I’m excited about Kindle. I’m trying to resist, but I highly doubt I’ll make it through the weekend without breaking down and buying one. Of course, I’m the furthest thing from an Apple fan. I don’t care to own an iPod, and I refuse to install ITunes on any of my computers. Why? I don’t know, there’s just something I’ve always felt to be unpleasant about them.

  2. JC says:

    The biggest problem I see with a device like the Kindle is the lack of a large target audience.

    For starters, many, many people don’t read. Period. More than half the population, I’d guess. So a device that is 99% dedicated to just reading is not going to appeal to them at all. Then there’s the portion of the population that reads mostly newspapers, blogs, magazines, and the occasional book. Again, this device has little appeal, as it forces you to pay for RSS feeds and subscriptions to papers that you can get for free on the web already (amazingly stupid). Not to mention that most mobile phones these days are plenty good enough for casual news and RSS reading.

    Then there’s that small portion of the population that just loves to read books. That would seem to be the target market for the Kindle, but the problem there is that people who are avid book lovers are avid BOOK lovers. They like the physical feel of paper and pages almost as much as they hate most things technological.

    Combining books and technology would seem like a good idea in theory, but it won’t appeal to many users at all. Which makes all the comparisons to the iPod even more silly. Everyone listens to music. Everyone wants to carry tons and tons of albums at once. Few people want to carry their entire libraries of books everywhere.

    The only group of people I can see benefitting from this kind of technology is students. Carrying a Kindle as opposed to 10 textbooks would be awesome (and would offer a huge health benefit, considering how bad those large textbooks are on the back). If I were Amazon, I’d be signing up Universities and getting textbook publishers on board right now. Then maybe as kids get used to reading this way they’ll eventually end up being adults who read this way.

    In the short term, though, I see this being a complete flop. No target audience, proprietary DRM format (which no one is used to in the book world), too expensive ($399, and you still have to buy the books), and just plain UGLY. Trash the keyboard, make the screen larger, and give it a touch interface, and you may have something that’s at least appealing to gadget freaks. Otherwise, chalk up another device that ends up forgotten in a year’s time.

  3. webomatica says:

    JC – yep – the small target audience is another reason why eBooks make more sense as a “feature” in an existing device like the iPod. Imagine a future keynote where Jobs announces says “you can now read books on an iPod and buy books via iTunes”. 99% of the population doesn’t care, and they continue purchasing iPods to listen to music or watch videos etc. Apple doesn’t really care if tons of people buy the iPod just for reading books, but they corner yet another digital content revenue stream at very low development cost to them (since they already have hardware and software – how much more would it cost to sell what are essentially small text files).

    But yeah, the market gets even smaller as you point out when considering many die hard bibliophiles are total technophobes, and many early adopters who buy any new device would be more into other forms of entertainment than reading.

    The ultimate truth may be that there is not enough of a market for a dedicated eBook device, period, and it’s not even worth Apple’s efforts to get in on it. In that case, maybe publishers should just stick their books on websites, coat them with ads, and people can check ‘em out using Safari or some other browser :)

  4. DaveD says:

    I can’t see this device replacing textbooks, unless there’s a way to write in the margins.

  5. Hel says:

    I just don’t get the fuss about the Kindle. My husband and I have been reading ebooks for years and have accumulated quite a large library of them between us. We read on a type of device that has been around for years – a PDA. My husband has an old Sony Clie and I upgraded over year ago to Palm’s Tungsten E2 which I find even more comfortable to read from than my old Clie. I understand that a Tungsten E2 will set you back roughly US$200 (probably less on eBay). You can then download a free version of your ebook reader of choice (we prefer eReader (ereader.com) and managed to get the Pro version in a bundle – was worth it too), and from there you can pick up ebooks for pretty cheap. A new release often sells for around US$20 although we usually stick to the ones priced $7 at the most. There’s no way I’m paying for classics now either. Manybooks.net has been slowly working on converting book available via Gutenberg into as many ebook formats as possible.

    Apologies for the rant/plugging, but with all the discussion about the Kindle lately I’ve been astounded that nobody has pointed out that you can already read ebooks perfectly well without being forced to only buy from one store and pay through the nose. I love books as printed books as well, but the price of books in Australia has steadily climbed and the price of ebooks, even with conversion rates, is a significant saving for us. Not to mention that no trees died to feed our reading habit, I can read in bed without disturbing my husband, my PDA syncs to iCal, my shopping list and menus are on it, and best of all, it’s small enough that it goes everywhere with me. At any time on a bus, waiting for friends, having lunch, I can whip out my PDA and choose a book from my library. I believe there’s even software out there that can convert webpages into a format readable on a PDA complete with images, although I don’t recall the name at the moment.

    Ahem, apologies again for the rant and oh one last thing. Yes, I can add as many notes as I choose to my ebooks as well :)

  6. webomatica says:

    Hel you rant is acknowledged. And if you get tired of a PDA you could always turn a laptop 90 degrees :) . I will grant that for really long, novel length titles I don’t prefer to read on a backlit screen – but then I’ll just read a dead tree novel.

  7. Sweetpea says:

    I have been really interested in the kindle. It is a pretty cool device but has it’s setbacks. It would be great if you could put the books you already have, but haven’t had a chance to read on Kindle for no charge. you’ve already bought them, so why pay for something twice? Also as a graduating high school student, it would be AMAZING to have something as small as the kindle hold all of your text books! It would definately be a weight off my shoulders! lol. But as it stands right now, the kindle is WAY overpriced and has some things that could be added to make it better. I think that they are going in the right direction with this, but i’m gonna wait for now.

  8. Indeed, Kindle is a great product. People can make real money promoting it as well. Good work amazon affiliates.