Kindle Review – Kindle Fire Review, Kindle 4 Review

It must be pretty galling for Sony that they cut the price of the Sony Reader Touch Edition to $199 and no one even noticed.

Seriously.

The $189 Kindle and the $199 Nook are the only eReaders anyone is writing about.

Do a Google News search and you’ll see a ridiculously high number of Kindle vs Nook vs iPad articles and absolutely zero mentions of the Sony Reader. People don’t even seem to realize that the Sony Reader has significant market share. In a way this is exactly what B&N is trying to avoid. If the eReader race turns into Apple vs Amazon people are going to forget the Nook even exists.

In fact, factor in the recent arrival of Apple and iBooks and the imminent arrival of Google Editions and it seems quite likely that Amazon vs Apple vs Google will take up all the attention and B&N and Sony will start slipping out of people’s minds. B&N do have the advantage of their brick and mortal stores (think someone at the Kindle forum came up with that term – it’s brilliant). However, brick and mortal stores can only save B&N for a bit.

If B&N’s Nook and Sony Reader slip out of people’s ‘eReader awareness zone’ they die

There aren’t that many people aware of eReaders to begin with. For a lot who are aware, eReader = Kindle. That leaves B&N’s Nook and the Sony Reader in the rather precarious position of being on the verge of slipping out of people’s minds.

B&N solved that problem temporarily by releasing the $149 Nook WiFi and cutting the Nook’s price down to $199. However, this is just a temporary respite. It took Amazon just a few hours to cut the Kindle’s price to $189 and re-establish it as the #1 eReader – not to mention steal all the free publicity.

Sony Reader is almost completely missing from eReader coverage

Out of something like 40 articles there was just one (by the WSJ) that had any mention of the Sony Reader Touch Edition. If it weren’t for that article wouldn’t even know the Touch Edition was now $199.

It’s as if the Earth opened up and swallowed the Sony Reader. At least the Press are behaving that way. It’s amazing to see the contrast – With the iPad the Press are dying to make the story about the iPad instead of talking about the Kindle vs Nook angle. With Sony Reader they’re pretending that it doesn’t even exist. It’s probably the #2 eReader and definitely in the Top 3 dedicated eReaders and the Press don’t even mention a huge price cut and its role in the current eReader price battle.

If you’re Sony you have got to be worried.

Nook had been almost forgotten in the Kindle vs iPad Buzz

The Press were so busy pretending a $499 multi-purpose device and a $259 dedicated eReader were in the exact same niche that they had forgotten to talk about the Nook. The very impressive Nook browser was hardly mentioned and their latest software update has been totally ignored – even though it adds some important features.

Notice how even now the cheaper Nook and $149 Nook WiFi are mostly being used to write ‘iPad will kill all eReaders’ stories that the Press are infatuated with.  

Nook have to figure out a way to carve out a place in people’s minds (and, if possible, their hearts). The Kindle has the luxury of being ‘the eReader’ and can afford to be humble about all the features it’s adding.

Can eReader companies do ‘dog and pony’ shows? Do they need to?

eReader companies face a very interesting dilemma -

• They could run a Dog and Pony show and add sexy features and create a device people want to touch and caress. This would get them ‘mass market’ appeal and especially help with the segment of the population that is very affected by such things.
• However, we don’t really know if such people read a lot of books. In fact, we know that most readers just want a device to read books on. They don’t really care about their device playing games and movies or turning into a toaster oven and making them breakfast.

You have the mass market of hundreds of millions of people who could conceivably start reading books overnight. You have the dedicated group of 20 to 30 million readers who read a lot of books and drive 80% of the $23.8 billion of book sales.

This is where the Press are making a big mistake. They are looking at number of people and what most people want as opposed to what the really important book readers want.

Amazon’s matching of the Nook’s price has nothing to do with the mass market or with the iPad. Why didn’t they do it earlier if it was about the iPad? Why is the Kindle DX still at $489?

Amazon just want to make sure that the bread and butter readers of the book industry, the ones that account for 70 to 80% of the $23.8 billion a year in book sales revenue, choose and stay with Amazon.

Differing Standards

Apple gets a lot of praise because they ‘focus on the most profitable customers’. Getting whipped by Windows is OK because Apple has the ‘most profitable’ customers (not to mention the most aesthetically refined and discriminating in the good sense). They make a lot more profits than other PC companies (of course Microsoft isn’t included).

Sure.

But that’s exactly what Amazon is doing. They’re telling the do-everything device makers they can have the supposedly super-valuable huge market of people who don’t really read. Amazon are going to have the 20% that generate 70% of revenue. They are going to have the second tier of regular readers who generate another 20% of revenue through Kindle apps on various platforms. Do-everything device makers can gladly have the remaining hundreds of millions of people who generate 10% of book sales.

Everyone wins – Do-everything device makers can talk about how they get 1 book download a month and how once a year it’s a paid download. Amazon happily keep quiet about all the Kindle owners who buy lots of books every month.

Amazon’s business model isn’t based on social proof and popularity so they don’t have to market using numbers and ‘all the cool kids are buying it’ shennanigans.

The second tier of readers is what B&N are after

B&N arrived too late to get the top 20%. Amazon had already wrapped up a lot of them. Sony had some of the rest.

That means it has to go for the second tier of customers – those that generate 20% of book sales revenue. Look at all the features B&N are promoting and this becomes clear – very low prices, a million public domain books, library ebooks, lending, Android, a second LCD screen. These are all features that appeal to this second tier of customers – those who don’t buy as many books (for multiple reasons), those who read enough to want a dedicated reading device and at the same time a LCD screen and Android seduce them with their possibilities.

We basically get a very simple break-up -

1. Top 20% of readers who generate 70% of revenue – Kindle with a brutal focus on reading.  
2. Next tier of readers who generate 20% of revenue – B&N with a device that is dedicated to reading and also a bit mainstream. Focus on ’cheap’ highlighted by the million public domain books and support for library books and the really low price.
3. Remaining readers and non-readers who generate 10% of revenue – Multi-purpose devices. When you read a book a year you obviously want a reader that specializes in something else entirely.

There is obviously some overlap. Apple is getting greedy and trying to get people in the top 20% to buy the notion the iPad is an eReader. Amazon has a refurbished Kindle 2 (US) for $139 to get some of the value seekers. B&N obviously has a fair number of the top 20%.

For the most part though – this is exactly how the eReader market is shaping up.

Sony Reader had started focusing on the second tier of readers after it lost out to the Kindle. Now B&N’s Nook is eating its lunch.

Luckily for Sony they have a new generation of Sony Readers lined up to release within a month or so and might be able to get back the #2 eReader spot (perceived spot, they probably still have the actual #2 spot). Then, when they do a major price cut, people will actually pay attention.

Filed under: sony reader