Not long ago, people were speculating that the Kindle had sold just 10,000-40,000 units and was doomed to fail. Now thanks to TechCrunch’s ‘official leak’ figure of 240,000 you’d think the Kindle hating would stop – alas, no. (Btw – atleast 20 other big sites, including slashdot, ars technica, etc., have picked up and written about the 240,000 kindles sold figure in the last few days – an important lesson in how powerful it is to fulfill the human need for some sort of stability i.e. raw solid figures to hold on to in the face of uncertainity).
I’m going to dissect a typical anti-Kindle article – in this case one from Conde Nast’s Portfolio.com (which obviously adheres to a higher journalistic standard than the typical ‘it’s got DRM and it’s not designed by apple’ anti-kindle review by someone who’s never touched a kindle).
Anyways, here are my rebuttals to each and every reason asserted for Kindle having no prospects (the full article can be found at Amazon Kindle Prospects – Portfolio.com by Liz Gunnison) -
- Assertion: Reading is not a growing industry. My Take: Quite Frankly, this is nonsense. Publishers might not be seeing the type of growth they’d like – however neither are music companies, or a host of other industries. Its because the nature of the markets is changing. Also, despite the supposed death of reading profits are going up. And reading in general is growing much more than book sales with the rise of wikipedia, websites, news sites, blogs and other forms of online reading.
- 2007: The Association of American Publishers (AAP) has today released its annual estimate of total book sales in the United States. The report, which uses data from the Bureau of the Census as well as sales data from eighty-one publishers inclusive of all major book publishing media market holders, estimates that U.S. publishers had net sales of $25 billion in 2007; a 3.2 percent increase from 2006 with a compound growth rate of 2.5 percent per year since 2002.
- Assertion: The 240,000 units sold represent a good portion of the total market for the device out there. My Take: In your own article you’ve listed a figure of 68 million people as the number of people who read part of 10-49 books a year, and who have a motive to buy an electronic book reader. You’re basically contradicting yourself.
- Assertion: Using a 2007 AP-Ipsos survey and a 2005 Gallup survey to come up with a figure of ’68 million’ people who have a motive to buy a Kindle since they read part of 10-49 books in a year. My Take: I agree – you’re basically saying that there’s potentially a huge market. The big sticking point you’ve put down is the $359 price. However, ebooks are much cheaper. Once Kindle starts offering textbooks the price savings just from a few years of textbook purchases will be enough to make up for the amount. And Amazon has already cut the price by $40 once – another price cut or a couple and we’re looking at a much easier purchase decision.
- Assertion: Of those ’68 million’ only 12 million will qualify as having the means and the motive to buy a Kindle. My Take: That’s an obvious flaw as they’ve taken two completely different sets of statistics i.e. a survey for relatively voracious readers, and a survey for household incomes, and made the assumption that income distribution for these smewhat voracious readers is the same as for the general population.
- Assertion: Kindle is not going to make a reader out of a non reader. My Take: There are two faulty assumptions here – you’re assuming that the market for the Kindle is limited to readers and that its scope is limited to reading. At www.booksummit.com, one of the members talked about how at a friend’s place she used the kindle to find an online recipe and then referred to it while cooking. That’s just one example of the multiple things you can do. As people will play with it more there’s a host of uses they’ll figure out. Did I mention there’s a google maps functionality built in?
- Assertion: Going down from the already faulty 12 million figure to 2million/1 million based on a bunch of superfluous assertions such as ‘people would rather read on their computers than on a Kindle’. My Take: Let me guess – you’ve never touched a Kindle. You have no idea what the electronic Ink screen looks like, and that it is much better than computer monitors for reading.
I’ll make three main assertions of my own (the reasons I think the growth of the Kindle is very, very sustainable and will continue) -
- The big mistake everyone is making is assuming that the Kindle’s market is limited to ‘people who read books’. The scope of the Kindle, especially with its always on internet connection, is – ‘people who read’. The Kindle addresses its core function i.e. being an electronic reader, very well. There is a pretty huge market for an electronic reader that does its job well, especially if you realize that an electronic reader covers books, blogs, the internet, and a lot of other forms of reading.
- The killer apps are yet to come – a full blown browser, free access to blogs, a social network functionality within the kindle, cheap(er) textbooks, full blown google maps, small games (sudoku, crosswords, tetris), things that will come up if Amazon would only open up the platform. Or if Amazon implements them in-house.
- The whole price issue is a non issue – If TechCrunch figures are correct, then 240,000 people have already ponied up $359 or $400 for the Kindle. A lot more people can afford a $359 device than you realize. Also, when it comes to gifts, I’ve personally given my sisters and mom gifts like a blackberry, and ipods, and watches that are all close to or more than that price point. In 2 out of those 3 cases I’d rather give them a Kindle since those two are book lovers. Any parent thinking of gifting their kid a device and having to choose between an ipod and a Kindle – which do you think would help your kid’s intellectual development and intelligence more?
Overall, I think a lot of people are going through the whole ‘denial’ phase. I’ve never owned an ipod myself and i still think it’s hugely overrated. There’re still millions and millions of people buying, gifting ipods still. I think people really need to dissociate from their own personal perspective and look at the Kindle without bias. Then they’d stop using guesstimates based on 2007 AP surveys to rationalize their personal opinions.
And for my parting blow – We have only considered the US so far. There are already people in the UK and Canada who, even without WhisperNet, have bought the Kindle. Considering the whole world makes the market much, much bigger – an effect not to be taken lightly, as Google’s earnings breakdown would highlight.
Filed under: kindle | Tagged: kindle, kindle rants
for any avid reader, the price point is a non-issue. i read between 100-150 books a year, and have for the last 20 years, so prior to buying a kindle i was spending three or four times the cost of the device *every year* for books anyway.
ive had my kindle for 8 months now, and its more than paid for itself in the money ive saved from the reduced cost of the ebooks over the shelf price… so far it looks like ill spend roughly the same amount this year as i usually do on books, when i *include* the cost of the kindle in the costs… so essentially, my kindle was free. and next year, itll be *better* than free, as i will *continue* to save as time goes on.
add in the benefit of not having to do my annual “clear out the bookshelves, sort the books, box them up, and haul them into the attic to join the other thousands of books threatening to collapse my house at any moment” thing, and its even nicer
for me, the kindle is up there with my tivo and gps: one of those technologies i absolutely cannot do without…
The above comment is dead on. I read about 2 or 3 books a week for recreation and more for technical. Not carryinf more than one book in my carry on is worth a lot.
Now if the dang thing would read PDF files without the conversation (it messes up formatting sometimes) it would be perfect.
Anyway, saving from 2-5 dollars a book and buying half my books on the Kindle means I save roughly $130 to $325 a year . And I am tending to the higher prices on the Kindle (hard backs more of a pain than paperbacks). So a 2 year payout at the most?
[...] Liz Gunnison eventually whittles down the number of American’s who would be interested in buying a Kindle to about 500,000 – 2,000,000 people. You can read her article here, there’s a lot of misinformation and half-truth’s scattered around the article which makes Gunnisons analysis seem kinda factual, however, a post at thekindle offers a good rebuttal of the entire article. [...]
I have had my Kindle for about 2 months now (I waited for the price drop), and wonder why I waited so long.
In addition to books, I have also put the pdf conversions of amateur radio equipment manuals, some audio books, converted HTML pages that link to mobile web sites, and converted journals and e-magazines, along with four Bibles, on my device.
Having these resources, even if some of them aren’t perfect due to conversion formatting, at my fingertips is liberating and time-saving.
As I use this device I continue to find new ways to use it, and anticipate that this will continue.
@Tim B.
“for any avid reader, the price point is a non-issue. ”
This depends on what your definition of a ‘avid reader’ is.
While I take your point that the the Kindle could pay for itself if someone is buying scores of new books at retail prices every year, most of the really avid book readers I know (100+ books a year) make extensive use of public libraries.
The libraries where I live do make plenty of books available as e-books, but none work on the Kindle (yet?).
Once we hit a tipping point of installed base of e-readers (of which the Kindle is currently the best, imho), we will start to see pirated books (the NY Times recently ran an article about the pirating and dissemination of college text books). The publishing industry presumably knows this is coming, and it will be interesting to see if it can learn from the mistakes of the music industry in how to adapt to this inevitable occurrence. Many early adopters of the Kindle will be the ones who will be the most eager consumers of pirated content, just as the early adopters of MP3 players were. (One of the reasons that people are able to afford expensive iPods is that the cost of the related content — music — approaches zero for a large number of users.)
This is especially true as the Kindle makes inroads into what should be natural market — college students buying required textbooks — for whom a ‘book culture’ might mean something totally different than it does for older ‘avid readers’.
As @Jerry says above, “As I use this device I continue to find new ways to use it, and anticipate that this will continue.” I presume many othes will as well!
re: libraries… i dunno, all of the peeps in my little circle of readerly friends buy their books, either at retail, or at used book stores… personally, i only buy at retail… and i dont think ANY of us use the library… why? its a pain in the ass. the selection is poor; when you read 100+ books a year, in 20 years youre going to pretty well have devoured all the really good books in your genre of choice and so are usually buying books as soon as theyre published. i dont know what the libraries are like in your neck of the world, but my experience has been that new books are rarely immediately available, and even when they are, i have to get on a waiting list behind a bunch of other people, and by the time im able to get the book, the spine is broken, the pages are dogeared and fingerprint-smeared, and everyone i know has already read the book some time ago. if im lucky, they havent been talking about it and spoiling it for me
public libraries are great for folks without the means to buy books… but they cant hold a candle to having a private library of your own where every book is in good condition, and absolutely guaranteed to be on the shelf when you want it.
even so, i see your point, i forget that people do use libraries (or more accurately, i forget that libraries even *exist*), and for those folks maybe the kindle doesnt make as much sense… but that will change as the early adopters eat all the R&D costs and the units get cheaper and cheaper…
I agree with most of your points, but I think you’re dismissing the price point issue too easily. $360 is still a lot to pay for a device that lets you read books (Yes, I know it does more, but let’s be honest. Reading books is — for now at least — its main purpose.).
I’m very happy with my Kindle and it is quickly becoming one of my couldn’t-live-without gadgets, but the device itself and the Kindle format have their negatives and I can see why people wouldn’t want to be early adopters with it at the current price point.
Heck, $360 is a lot of money to shell out for anything. A book-reading device is really the last thing I’d buy at this price.
Also, this is no hate for the Kindle at all. I’d like to get one (whenever it will be available in europe), but not for more than $100. After all, everything it does I can do on a used 1990′s laptop. There are even mobile phones that could do that if amazon would support them.
On pirated books and libraries…
Well, both of my kids out read the public library years ago. They still go weekly but since we are in a small city, it doesn’t keep up with them. On technical stuff, libraries seem to run 2 years behind which is unacceptable in my field.
Pirated books already exist. You can probably down load anything you want from a torrent. Everything from current best sellers to classics is out there. I understand the quality if iffy and you have to convert but they are available now.
Great post. I don’t get where all the nay-saying is coming from. I guess professional “opinion-makers” have to say *something,* and they feel it’s cooler (and safer) to be pessimistic.