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February 04 2011

Ereading Update: Ebooks, tablets, and app confusion

During the recent announcement of Amazon's 4th quarter results, Jeff Bezos highlighted that Kindle books have now overtaken paperback books as the most popular format on Amazon.com. While Bezos had previously predicted that ebooks would become the most popular format by the 2nd quarter of 2011, he admitted, "this milestone has come even sooner than we expected."

So not only are ebooks the most popular format, but the growth of ebook adoption is even faster than Amazon predicted, a strong sign that ebooks are now mainstream. Or, to put more simply, ebooks are the preferred format for readers. So now what? How does this shift impact authors, agents, publishers, and bookstores?

With such a clear tipping point, it is important to recall that this is just now happening, so it is going to take some time before everyone accepts this shift and realizes what it means for their business. While many in the industry could see this shift approaching and started the process of adaptation, I think the shift has come much earlier than most anticipated.

Tablet market remains hectic and very competitive

I can't recall a more competitive market than what we are currently witnessing for tablet computers. While Apple continues to sell iPads like hotcakes, competition is beginning to eat into the market. According to Strategy Analytics, the iPad lost ground in Q4 of 2010. The iPad took 75% of the shipments, which is quite a decrease from the earlier 96% share.

Samsung is reporting that they've shipped some 2 million Galaxy Tabs in the two months they came onto the market in November of last year. Unfortunately they are experiencing an above average level of returns. The researchers at Strategy Analytics have found that the customer return rate for the Galaxy Tab is 15%, compared iPad's return rate of 2%.

Again, the battle of the tablets will be won by the company that delivers the best software experience. Unfortunately for Apple, this is where their closed garden approach to software may ultimately diminish their share of the tablet market. I'd be very surprised if an open solution didn't gain the most favor for owners.

Software may offer a competitive advantage in the long term, but vendors are currently focused on hardware. Below I take a look at two new devices.

The LG G-Slate

slate.jpgThe G-Slate will launch using Android 3 Honeycomb, and it will be the first tablet to launch on T-Mobile's 4G network. The G-Slate will have an 8.9-inch screen, a dual-core 1 GHz Nvidia Tegra 2 CPU, 32 GB of internal memory, two cameras (5 megapixels on the back and 2 megapixels on the front), LED flash and HD (1080p) video as well as stereoscopic 3D recording capability.

The T-Mobile G-Slate will be among the first 4G tablets to fully benefit from the tablet-optimized Android 3.0 platform, which was designed from the ground up for devices with larger screen sizes.

Brainchild launches the Kineo Android tablet for schools

kineoHands.jpgAimed at the education market, Brainchild's Android-based Kineo features an 800MHz dual-core processor, 256MB of RAM and 2GB of storage, as well as WiFi connectivity, an SD card slot and an HDMI output for streaming data through HD television screens.

In a way, the Kineo represents the first signs of the second level of integration of tablets into society. Considered more utility than a resource, these specialized tablets focus on solving a singular problem.

Other news

Things started to get messy when Apple blocked the Sony ereader application because it would have gone around Apple's proprietary purchase system. Sony responded by conceding to Apple's demands and adopting Apple's in-app system. Apple responded by clarifying that apps must only provide equal access (an option) to the Apple in-app purchasing system.

Interpretations of these requirements differs. So far, there are many applications currently in use on iPads — like the Kindle app — that take iPad users to a website for them to complete purchases. Apple has not indicated if they will crack down on these applications. Amazon has yet to comment on the prospect of having to include an Apple purchasing option. Currently it is estimated that 40% of iPad ebooks are bought directly from Amazon. Another 12% are bought from Barnes and Noble Nook bookstore. What's at stake is the automatic 30% cut that Apple takes on all iBookstore purchases.

While I've mentioned this before it bears repeating: Apple must concede that they will not own ebook distribution like they do for digital music downloads. What's confusing is that Apple is a hardware company. Yes, they stumbled onto the iTunes monopoly, but iTunes was only a utility to get people to buy more iPods. So with an already commanding lead in tablet sales, why jeopardize that lead by forcing users to stay within their walled garden? We live in a highly networked world and consumers no longer accept inferior service delivery. They merely route around the failure and get what they need from the next suitable replacement. Time will only tell whether customers care more about Apple's "it just works" strategy or freedom of choice.




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January 07 2011

Ereading Update: Record device sales and a look at CES tablets

According to some sources, the early arrival of winter made the 2010 holiday season the biggest ever for online electronic retailers. With comScore reporting that more than $32 billion was sold during the holiday shopping period, and overall sales were up 12 percent over the previous year. Now I'm confident that this year's numbers would have exceeded those of 2009, even without thousands of people being snow-bound in their homes, but I'm sure Internet retailers aren't complaining.

As I predicted, it was also a big holiday season for ereaders. Both Amazon and Barnes & Noble recently announced that their respective dedicated ereading devices were the best-selling items for each of the companies. Now stop and let that one sink in a moment. According to Amazon, they've sold more Kindles in the U.S. in 2010 then any other single product during that same time. Barnes & Noble also says their latest LCD-based Nookcolor tablet was the company's top-selling gift of the holiday season.

The holidays weren't that kind to Borders and small bookstores. The diminishment of either outlet will likely accelerate the adoption of ebooks as the primary publishing medium.

CES 2011

This week, all gadget lovers were focused on Las Vegas, as the 2011 International Consumer Electronics Show kicked off the year with a new round of device announcements. The dominant ereading trend was multiple-use tablets, with ASUS, Lenovo, and Motorola each announcing new tablets (HP was notably absent, though they do have a Feb. 9 WebOS event).

Here's a look at some of the new tablet offerings.

ASUS Eee Slate EP121

ASUS_Eee_Pad_EP101TC-540x389.jpgThe ASUS Eee Slate EP121 is one of the first Windows 7-based tablets to come to market. The tablet features a 12-inch (1280×800) multitouch display and will run a full version of Windows 7 Home Premium. The multitouch display comes with a built-in Wacom digitizer, which means a user can control the tablet with the included stylus or attach a Bluetooth-enabled keyboard. The EP121 is powered by a Core i5-470UM processor, includes 2 to 4GB of RAM, and a 32 or 64GB SSD. Amazon is accepting preorders ($999 for the 32GB model, $1,099 for 64GB).

ASUS also released three Android devices: the Eee Pad Slider, the Eee Pad Transformer, and the Eee Pad MeMO. The ASUS Eee Pad Slider includes a 10.1-inch IPS touchscreen and a slide-out QWERTY keyboard that will incline the tablet screen vertically. The ASUS Eee Pad Transformer includes a 10.1-inch capacitive touchscreen and optional docking station with full QWERTY keyboard. The ASUS Eee Pad MeMo is a 7.1-inch capacitive touchscreen based on Android 3.0.

Lenovo IdeaPad and LePad Slate

Lenovo-Lepad-1.jpgLenovo is the first device maker to bring a hybrid design approach to their tablet strategy. This week they announced the IdeaPad U1 hybrid with LePad slate, a two-in-one device that combines a high-definition slate featuring access to Android applications and a keyboard base that provides a full Windows 7 computing experience.

The device weighs less than two pounds and is half-an-inch thick. While the tablet currently uses Android 2.2, Lenovo says that when it ships in the U.S. it will run Android 3.0. Other features include a front-facing camera, WCDMA and EVDO connections, a 1280x800 10.1-inch display, a 32 GB HDD, and 1GB RAM.

Once docked with the IdeaPad U1 Hybrid, the slate converts into a Windows 7-based netbook. A 1.2GHz Intel Core i5-540UM processor will power the IdeaPad, and it will also include 2GB DDR3 RAM, a 320GB SATA hard drive, and 802.11 b/g/n and Bluetooth 2.1 networking.

Motorola XOOM

11x0105ub234g5.jpgVerizon Wireless teamed with Motorola Mobility to unveil the Motorola XOOM, supposedly the first device on Google's new Android 3.0 Honeycomb operating system. It features a dual core processor and a 10.1-inch widescreen HD display. The tablet will launch as a 3G/Wi-Fi-enabled device in Q1 2011 with an upgrade to 4G LTE in Q2. The XOOM will support 1080p HD video and HDMI output to display content on larger HD screens. It also features a front-facing 2-megapixel camera and a rear-facing 5-megapixel camera that captures video in 720p HD.

Other news

This week also saw the Wall Street Journal draw their focus onto the growing battle between the planned Google Digital Newsstand and Apple's iPad magazine offerings. The article raises one of the most controversial and unresolved issues in this new era of digital publishing: the relationship between the content producer (author) and his/her readers. Content producers want a more intimate and engaged relationship with their audience and readers want to get closer to their favorite content producers.

The future of publishing demands a cohesive relationship between producer and audience, which for the most part is currently non-existent. For example, authors that in the past have used traditional publishers have relatively little information about who bought their books. They may know some sparse demographic details, but there is no direct connection between author and reader.

In my opinion, look for this issue to become one of the biggest challenges for publishers of all types to address. Many top-selling authors are leaving the fold of traditional publishing to free themselves of the layers of intermediaries that separate them from their audience. How existing publishing houses respond to this issue will be a major factor in their long-term relevance.


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