Kindle Review – Kindle 2 Review, Books

An article written by Flurry  has morphed into hundreds of articles about how the iPhone is killing eReaders.

Here are the actual facts in the article -

Facts related to Books 

1. The number of books released in the App Store surged from 10% of Apps in July 2009 to 20% of Apps in October 2009. This is not sales. This is how many books were made available as apps.
2. Number of Books released was higher than number of Games released (in September and October).
3. In August Flurry had, based on their research, claimed that there were 3 million eBook readers on the iPhone. We’ll consider it as a fact (lets assume their research was right).

Facts related to Nintendo

Just one – Nintendo’s profits fell 50% in Q3, 2009 and Flurry write that Nintendo cited the iPhone as one of the reasons. Here’s the actual text - 

… since Apple launched the App Store in July 2008, game developers have flocked to the iPhone, creating an alternative for consumers to the leading handheld gaming platform, Nintendo DS.

In Nintendo’s October 29 earnings call, the company cited iPhone competition against its DS as one of the reasons profits fell by more than half last quarter, from 133 billion yen a year prior to 64 billion yen, or $709 million.

Everything else in the article is just assumption.

• There are ZERO sales figures for book apps.
• There are zero numbers from publishers or authors.
• There is also close to zero analysis and little insight.

Assumption 1: iPhone Games hurt Nintendo.

iPhone might not have disrupted Nintendo’s handheld position

Flurry is assuming that the iPhone, and not the general malaise in games (or any other reason such as the PlayStation 3 Price Cut), is the main reason Nintendo’s profits fell.

Here’s what Nintendo’s Iwata had to say -

1.  “The Wii has stalled,” Iwata said. “Games of high demand could not be continuously released and the good mood has chilled.”

2. The mood of the market got colder than expected.

3. As for Nintendo’s other hit hardware, Nikkan Sports reports that Iwata downplayed suggestions that the DS was losing ground to Apple’s increasingly ubiquitous iPhone. “Our presence in the marketplace is growing,” he succinctly stated.

As opposed to Flurry’s reports that the iPhone is one of the main reasons Nintendo’s profits fell, Nintendo itself thinks it’s the Wii’s sales stalling that are the main reason.

Nintendo will be releasing a new DS with a 4.2″ screen and are pondering a Kindle like free 3G whispernet for it.

We can’t say for sure that it was the iPhone that hurt Nintendo. All signs (including Nintendo’s official stance) seem to indicate the main culprit was Wii Sales stalling.

Assumption 2: iPhone, which may or may not have disrupted Nintendo, will disrupt Books

It’s worth noting that the first thing Flurry did was to start off with the intent to find which sector of media and entertainment the iPhone might next impact. Their post clearly states it.

They literally were going through their data trying to find something that would support their assumption that iPhone is going to disrupt something else.

Books was the easiest one to claim because of a seemingly significant fact i.e. number of books being released for the iPhone is very high.

Let’s put it another way -

It takes a few weeks to a few months to write a game.

It takes a few hours to take an ebook text, run it through the process to create a stock eBook App for the iPhone.

There are millions of books available to convert into Apps. Not to mention the possibility of compilations. Plus public domain books that are free.

We are expected to think it is significant that more eBook Apps are released than games?

Assumptions about Books on iPhone

1. More book apps than game apps being released is significant.
2. Sharp Rise in number of books added means sales are increasing. (It’s an implicit assumption). 
3. Sharp rise in number of books available indicates Apple is positioned to take market share away from Kindle and eReaders.   

Lets leave the make-believe world and enter the real world.

Are Books actually selling a lot? At what prices?

Here are the number of reading apps and books in the Top 100 and their prices -

1. At number 33,  A Masterpiece Collection for $1.
2. At number 52, Nick Chase: A Detective Story for $1. It’s not even a book – it’s a game that plays like an interactive film noir graphic novel.
3. For comparison, there are 46 games in the Top 100 Paid Apps.

So Books are taking over the App Store except they are not selling. 

What about Free Apps?

1. At number 47, a Dictionary App.   
2. At number 77, 21 thousand famous quotes.
3. For comparison, there are 48 games in the Top 100 Free Apps.

Not even free books are doing well. Nor are free eReaders apps like Kindle for iPhone (when compared with general apps).

What does the Books Section of the App Store tell us?

Here are the bestselling paid apps -

1. Masterpiece Collection for $1 – Public Domain Books.  
2. iPhone Tips & Tricks – $2.
3. Self Help Classics – $1. 
4. Audiobooks App – $1.
5. Classics ( Public Domain Books) – $3.
6. Free Books App – $2.
7. Holy Bible KJV – $1.
8. NIV BibleReader – $9.
9. Love Dare 40 Dares – $1.
10. NIV Bible – $6.
11. AudioBook Player – $1.
12. Great Books ( Public Domain Books.) – $2.

Except for Bibles there’s nothing for over $3.

 The best-selling actual books or book related apps in the Top 100 are -

1. Twilight Books – New Moon at 24, Eclipse at 32, Twilight at 37 ($11 each). Breaking Dawn at 43 for $20.
2. DigiNovel 26 for $13.
3. 90 second fitness solution Vook for $5 at 42.
4. Law of Attraction Cards for $4.
5. Four Agreements Cards for $4.
6. The Boy Scout Handbook for $10.
7. Crush It by Gary Vaynerchuk Vook for $12.

Everything else is $1 or $2 and public domain or trivia.

Only 10 out of the Top 100 best-selling book related apps are anything resembling a $10 book.  

What does the App Store data actually say about Books on the iPhone?

It seems to suggest -

1. Book Apps definitely are not the best-selling paid apps or the best-selling free apps. Just 2 out of the Top 100 in each case.
2. Even within the Books Category,  only 10 of the Top 100 Book Apps are actual books priced $5 or higher.
3. People only seem to want free or very cheap.
4. 2 of the Top 3 Free Apps (Kindle for iPhone, Stanza) are owned by Amazon. Even if that’s a big channel for ebooks Amazon owns most of it.

Which leaves us with just two possibilities that could conceivably support Flurry’s hypothesis that Books on the iPhone will steal market share from eReaders -

1. The eReader apps i.e. Kindle, Stanza, B&N eReader, etc. are selling lots of ebooks. Note that these free apps don’t make the Top 100 Free Apps overall. 
2. The tens of thousands of Book Apps for actual $5 to $10 books are all selling well, just not well enough to show up anywhere on the charts.

Flurry haven’t posted any numbers on actual book sales.

Who cares if tens of thousands of book apps are released every month? We only care if they sell.