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Why an Apple Tablet Won't Challenge Kindle

Posted by: Stephen Wildstrom on May 07, 2009

“It doesn’t matter how good or bad the [Kindle] is, the fact is that people don’t read anymore. Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore.”—Apple CEO Steve Jobs to The New York Times, Jan. 15, 2008.

In the week that Amazon introduced the new, larger Kindle DX, there’s been a lot of talk about how a rumored Apple tablet is going to blow Kindle away. Now, I really hope Apple goes ahead and introduces a tablet that is a sort of oversized iPhone or iPod Touch. I can see lots of ways it would be a great device. But it is very unlikely to be a Kindle killer for both technical and business reasons.

One simple reason for Kindle's success is that Amazon understands book buyers. And the reason for Apple's likely failure, should it actually pursue the market, is that the company, as indicated by Jobs's comment, doesn't have a clue. What Amazon knows is that relatively few people buy more than the very occasional book. But the book-buying fraction of the public buys lots and lots of books. Book sales represent a classic case of an extreme Pareto, or power-law, distribution, where a tiny percentage of the public buys a vastly disproportionate share of the books.

Amazon gave out one startling piece of information in its DX presentation. It said that for those titles available in Kindle format, Kindles account for 35% of sales. We don't know the exact number of Kindles out there, but it is certainly well under a million. Their owners have to be buying books like crazy to produce numbers like that.

It took a long time for Apple to get the iTunes Store right, partly because of the recalcitrance of the music industry, partly because Apple had to learn the music business as it went. Amazon has a vast lead in its understanding of the book business, and if Jobs's thinking pervades the company on this subject, as it does on most topics, Apple is saddled with an attitude that is not conducive to selling books.

There are also solid technical reasons why an Apple tablet is unlikely to make a very good e-book reader. The essence of the Kindle is the E Ink display. This electrophoretic display is far from perfect. I'd like to see it a lot closer to black on white than its current dark gray on light gray. And making the technology work for color has so far proved elusive. But it has tremendous advantages for a reader. The fact that it looks like a printed page, not a backlit LCD display, makes it much easier on the eyes--given decent lighting--over long periods of reading. And because the display draws power only when turning pages, the Kindle can go for days, perhaps weeks if you turn the radio off, between battery charges.

To do the other things users will expect of an Apple tablet, especially displaying video and running games, will require an LCD or OLED (if it becomes practical in larger sizes) display. Apple will be doing well if it can get six to eight hours of active use from such a tablet. That's great for a game playing, Web browsing tablet, but terrible for an e-reader.

There's also been a lot of critcism of the Kindle as a single-purpose device, but I think that's really a strength, not a weakness. The advantage of single-purpose devices is they can be optimized to do that one thing really well. And again, this criticism misunderstands the passionate readers who are the heart of the Kindle market. To them, the Kindle is not one more device to carry, but several fewer books to travel with.

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Reader Comments


May 8, 2009 02:59 PM

Perhaps they will get along just fine?

I don't have a Kindle but I get Kindle pricing on the iPhone and presume the same would be the case on a iTablet device. Amazon was brilliant in launching the Kindle for iPhone App. I have already read 10 titles and paid for several on my iPhone. A bigger screened iPad would be great. Amazon I would presume is at 10-20 points over cost at best on the hardware so selling the book is what they care about. Great they offer a premium priced single purpose device for those who want it. I can't imagine they don't want to open the market up and sell ebooks all day long. Why not with 0 COGS.

I think you are creating a division where one does not exist. You actually come out and say that both companies have different priorities, so why are you creating the hype on a non existent competition? Jobs doesn't think there are Readers and Amazon likes the reading market. Good fit perhaps.


May 10, 2009 12:18 AM

Yo, mister tech guru. How about keeping up with the technology you pretend to keep up with and analyze?

Here's a free clue for you:

Teoh Yi Chie

May 11, 2009 06:36 AM

And Steve Jobs probably don't have enough information compared to what Amazon does for a living - sell books.

Jonny Z

May 19, 2009 11:28 PM

I don't think that Apple wants to sell books. They want to sell hardware, and here you me, if Apple releases a tablet they will sell a lot of it.

Steve hit the nail right on the head with his interpretation of Amazons e-book business plan. My only note is that I would not be surprised if Amazon is even taking a loss on Kindle sales, in much the same way as Sony takes a loss on sales of PS3s. The game is about selling content. Both Amazon and Sony had to create markets for their content thus PS3 and Kindle. It's in their best interest to keep the prices for these devices as low as possible so as to grow the market for content.

That said, if Apple were to release a device, with mass market appeal, that would serve as channel for Amazons e-books, it would be a match made in heaven for both parties.

Now if Apple releases a tablet, and given their market driving nature they surely will, calling it an e-book reader would be like calling a laptop a calender.

It's my opinion that there is a huge untapped market for a 10 inch tablet device that operates more like an over sized iPhone than a small notebook.

The way that I see it, such a device would have to support flash and have sufficient hardware specs to surf the web smoothly. It would have to be able to display all document formats, play media (.mp3, .m4a, .avi), and have better than average battery life. Additionally, the device would need the support of a loyal developer base.

I'm sure that most people would have a use for such a device.

As a student I spend on average 800 dollars per semester on textbooks and printing handouts/class notes. Digital textbooks are available for most classes for a fraction of the cost of a hard copy ($35 vs $150), but even small form factor notebooks are inconvenient to study from. A tablet would make a world of difference.

I'll never ditch my pen and clip board, but if Apple releases a tablet it will replace nearly 40 lbs of text and binders. And frankly, even if it costs $1000 it would pay for itself in a year. This is just what such a product would do for me, for another application check this link:

Just the last point. With google in negotiations to digitize millions of books, and provide online access to myriad academic journals, another door opens up for tablet devices.

The internet provides access to near limitless amounts of information. Some of it, like blogs and retail sites, is best accessed from a full-featured computer. For other information, the weather for example, a simple mobile device is more than adequate. But there is a great deal of information - email, news, periodicals, e-books, how-to guides, recipes, ect, - that would be best accessed from a device that does not yet exist.

Here's to hoping.

james braselton

July 28, 2009 04:44 PM


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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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