Reviewing the new developments in Kindle vs iBooks

Steve Jobs announced some important additions to iBooks at today’s Reality Distortion Conference -

  1. Ability to add notes to an iBook.
  2. Ability to just tap and add a bookmark. 
  3. iBooks gets PDF support. Click a PDF you get in your email and it opens up in iBooks. A separate bookshelf for PDFs.
  4. iBooks comes to the iPhone. It’s in iOS4 which is the default for iPhone 4 and also available free to previous generation iPhones.  
  5. Apparently iPhone 4′s new Retina Display makes books very pretty. It might even make them more readable.
  6. A book bought via iBooks will be downloadable to all your iDevices.
  7. iBooks will synchronize your place, notes, and bookmarks across iPad, iPhone, and iPod Touch.  

Most of these features are already present on Kindle for iPhone/iPad. The PDF support is one feature that the Kindle for iPhone/Kindle for iPad app doesn’t yet support.  Overall, these features are a big deal as they make iBooks a stronger competitor to Kindle for iPhone.

Reviewing impact on Kindle for iPhone vs iBooks

If you own an iWhatever you will probably consider these points -

  1. iBooks is the more publicized app and it matches the Apple aesthetic better. 
  2. iBooks has PDF support.  
  3. Kindle for iPhone has far more new books and better prices for non Agency Model books. 
  4. Kindle for iPhone syncs with PC, Mac, Blackberry, and the Kindle.
  5. Kindle for iPhone is a better reading experience than iBooks – better themes, better brightness control, better font.
  6. iBooks has fancy animated page turns and wooden bookshelves.
  7. iBooks has an in-app store - No having to go to the browser to buy books.

Kindle for iPhone is clearly better if your focus is on range and price of books and the reading experience. iBooks is better if you care a lot about animated page turns or need PDF support. 

Apple’s trump card is the power of the default and owning the App Store. Apple will just publicize iBooks a lot and win out.

Reviewing impact on iPhone vs Kindle

 Kindle is clearly a better reading device. There are only two substantial pieces of news as far as Kindle vs iPhone is concerned -

  1. Addition of PDF support. This makes the iPhone a tiny better than it was. 
  2. Apparently books in iBooks look much better with the iPhone 4′s new Retina Display. If this translates into better readability i.e. less eye strain and better screen contrast then it would make a better contrast Kindle 3 an absolute necessity.

Today’s news makes existing iPhones slightly better reading devices. It also suggests that the iPhone 4 might be a slightly dangerous competitor with its improved screen contrast – Trust Apple to give it a fancy name (Retina Display) – almost expected it to be called MagicalVision.  

Reviewing impact on iPad vs Kindle

The iPad doesn’t really get much – just PDF support. It probably makes PDF readers history. However, the Kindle already has PDF support. The syncing between iPad, iPhone, and iPod Touch isn’t a competitive advantage either – Kindle syncs across a lot more devices including all three of these.

If the next version of the iPad were to get the Retina Display it would be interesting to see how it looks and whether the difference in readability between eInk and LCD is reduced. At the moment the Kindle continues to be a significantly better reading device – unless you want a device that does multiple things.

Big Surprise - iBooks doing well with Agency Model Publishers

Jobs was fashionably vague about how iBooks is doing -

  1. In the first 65 days – 5 million books downloaded. About 2.5 per iPad. 
  2. No update from 2 million iPads sold. Guess he’s waiting to reach 3 million. 
  3. 5 of the 6 biggest publishers in the US tell Apple that the share of iBooks is up to about 22% – in 8 weeks. Assuming he means 22% of the ebook market for those 5 publishers. 

Compared to how close to their chests Amazon and B&N keep their sales figures this amount of disclosure seems positively scandalous.

What does it mean?

Perhaps as the Agency Model 5 raised their ebook prices their sales on other devices dipped. Lots of iBooks users were probably unaware of the whole $9.99 vs $14.99 controversy or didn’t care and their purchases meant that 22% of all sales of ebooks (for these 5 publishers) were from iBooks. It’s also worth noting that Random House is not on iBooks – meaning most users had no choice except for the Agency Model 5.

  1. Does this mean another 22% of sales for these Publishers were through Kindle for iPad? Amazon aren’t exactly going to help us out with that question. 
  2. B&N eReader for iPad was released just a few days ago so its figures wouldn’t really help.
  3. Is the figure high because Kindle owners have stopped buying books from these Publishers? Is it because iBooks users are buying lots of books?

2.5 books per iPad doesn’t seem very high – especially if it includes free books.

It’s hard to say exactly what’s going on – 22% is a healthy number. However, it’s disingenuous of the Agency Model 5 to not reveal what happened to ebook sales in other channels – Did they dip? Did they go up? What about sales through Kindle Store – what happened there?

iBooks on the iPhone and iPod Touch means a huge potential customer base

The two key words are huge and potential -

  1. There are 100 million iDevices and most of these are iPhones and iPod Touches (98 million or so). 
  2. The iBooks store will have access to the 150 million credit cards that iTunes has access to. 
  3. These users might be interested in reading books.
  4. Some portion might be coerced into reading 1 or 2 books a year.
  5. A smaller portion might end up reading a book a month on their iPhones.

The hugeness of the number (98 million) and the fact that there are 150 million credit cards in iTunes are very significant. It remains to be seen whether that translates into a lot of ebook sales.

Reviewing the new Stanza for iPad App

Much like Spad at the Kindle forum this is primarily a note of thanks for releasing Stanza. It’s not going to replace the Kindle and probably not even Kindle for iPad – However, it’s a beautiful app with so many options and so much customizability that you have to try it out.

Initially the probability of a Stanza for iPad app seemed dim – big companies usually just kill their acquisitions (Dodgeball, Lala, and so many others come to mind). To make things worse one of the Stanza guys left Amazon – a strong sign that Amazon might be ditching Stanza.

Suddenly, out of the blue, we have a new release of Stanza with iPad Support. Kudos to Amazon for keeping a great product alive. Let’s dive in.

Stanza for iPad – First Impressions

The first few moments with Stanza on the iPad are a bit overwhelming -

  1. There are far more options than you could imagine.
  2. 47 fonts to choose from including 2 that are barely readable and one that is made entirely of symbols.
  3. There are 22 font sizes. This is one of the few cases where an abundance of options makes sense.  
  4. Some of the options like being able to choose a background image are almost too much.
  5. The option to change screen brightness with a vertical swipe is really good.
  6. At the end of the entire exercise of choosing from a million options – ended up with something that was entirely unsuitable for reading.
  7. Don’t like the way the Search works. The results list is tiny and clicking one makes the others disappear.
  8. There’s Facebook, Twitter, and Email sharing included.
  9. The list of places to get books from doesn’t include Kindle Store. In fact, while the design for searching and buying books is pretty good you have no option of buying books from the Kindle Store, the B&N store, or Sony’s Reader Store.
  10. Most of the paid book stores listed have ridiculously high prices. No way to justify having them and not the top 2 (Kindle, B&N).
  11. In the Free Books Stores list – No idea why they give Random House’s 5 book free library, Harlequin, and Feedbooks priority over Project Gutenberg and Munsey’s.

This might seem harsh – However, at some level Stanza is almost more of a customization app than a reading app. If you’re very particular about what color the text ought to be and what font it should be using and how wide the margins are then Stanza is a godsent for you.

Stanza for iPad – In-depth analysis

After deciding to give up on all the customization options and go with a basic theme the reading was quite good. Stanza’s strengths and weaknesses began to make themselves clear -

  1. If you’re inclined to tinker with settings and options Stanza is a dream. 
  2. In addition to the 47 fonts and 22 font sizes mentioned above there are 19 themes, and the option to change background color, text color, and link color. 
  3. You can change the background image and its opacity. 
  4. You can choose between 4 alignment options. There is hyphenation in pretty much any European language. 
  5. You can specify what page turn effect you want, the page turn duration, change font sizes by pinching and spreading your fingers, and also choose what the left screen tap and right sreen tap do.

In many ways Stanza is the anti-Apple App – Apple cuts down the number of options and makes everything simple and restricts users to what Apple thinks is the best design. Stanza provides so many options that you couldn’t possibly accuse it of limiting users’ freedoms – at the same time it doesn’t really provide an ‘it just works’ app.

Kindle for iPhone and iBooks are very good from the perspective of making decisions for users. B&N adds custom themes and make things a bit confusing and Stanza provides so many options you might never be able to figure it out.

The two critical problems with Stanza are an overabundance of choice and a lack of access to the top ebook stores.

Stanza for iPad – How does it measure up?

We had looked at B&N’s eReader app for the iPad and also compared it with Kindle for iPad. At that time Kindle for iPad was clearly the best reading app on the iPad.

  1. Stanza comes across as a very powerful and flexible reading app that is also overwhelming and scary – even for some tech savvy users.
  2. Barnes & Noble seems comparatively simple – However, the theme customization still makes things complex and the default themes are not very good (except for 1 exception).
  3. iBooks seems to have the perfect balance - a good default theme with a decent number of settings. It is however a little too focused on looking good as opposed to being a good reading app.
  4. Kindle for iPad is the best option if you just want a reading app that’s great out of the box and works. It’s very simple - people who want to fiddle with options and settings will be disappointed and people who just want to jump into reading will love it.

We could think of it as 4 groups of users - with each reading app particularly suited to one of them.

  1. If you love Apple’s design aesthetic and don’t care much about pricing or range of books iBooks is the choice for you. It’s also pretty straightforward. Pretty much every Apple fan should get this app – it’s built specifically for you.
  2. If you want a reading app that has a great out of the box theme and font and is exceedingly simple to use Kindle for iPad is the app for you. If you like a lot of settings give it a miss. This is the best app for 80% of users – especially if you want simplicity or want the best range of new books at the best prices. Obviously this is also the app of choice for Kindle owners.
  3. Barnes & Noble is great if you own a Nook or want a mix of settings and good defaults. It provides enough flexibility that you can tinker without getting overwhelmed. It also has a pretty decent range of books.
  4. Stanza is the transformers reading app – it transforms into a million different forms. If you love options and settings and almost love them more than reading this is perfect for you. It’s also great for people who’d rather get ebooks from free book sites and the smaller ebook stores than Amazon, B&N, and Sony.

It’s hard to rationalize waiting so eagerly for Stanza and then be disappointed – After all Stanza for iPad has all the goodness that made Stanza for iPhone my choice for best reading app on the iPhone.

Why did Stanza for iPad go from #1 to middle of the pack?

Think there are a few main reasons Stanza is no longer my reading app of choice -

  1. Stanza is the best reading app for the iPhone on the iPad. It’s a very different sized device and Stanza’s team haven’t really taken that into account.  
  2. Stanza hasn’t figured out the 150 options out of their 300 options that should be removed. In fact, they could remove 75% of their options and they’d end up much better off.  
  3. Kindle for iPad and iBooks do things that take advantage of the iPad – With iBooks it’s the two pages at a time view and with Kindle for iPad it’s the way the whole app uses the extra space and focuses on a design that brings the book to the forefront. Stanza doesn’t.
  4. Kindle for iPad put all its effort into choosing one great font (Caecilia) and making three great themes and laying out things very well. iBooks put all its effort into making the app look great and animating page turns and making fancy bookshelves. Stanza, on the other hand, put all its effort into providing the user with a ton of choice – However, it missed out on providing users the option to do next to nothing and still get a very solid, very readable app.
  5. There’s not enough evolution. It’s still a great app with lots of options – However, it’s debatable whether it’s better than its previous version. In fact, it might even be a little bit worse.

Stanza is by no means a bad app – it’s just that it has lost its grasp on #1. Kindle for iPad is 1st. Stanza and B&N are a joint 2nd. iBooks is 4th unless your DNA has a strand of Apple running through it – in which case iBooks is #1 for you.

Survey says 33% of iPad owners frequently read ebooks

Well, sort of. It is a survey after all.

Change Wave did a survey that asked 153 iPad owners what they most often utilized their iPads for. Each respondent was allowed to choose up to 5 uses. The results were -

  1. Surfing the Internet – 83%.
  2. Checking Email – 71%.
  3. Apps from Apple App Stores (whatever that means) – 56%.
  4. Watching Videos – 48%.
  5. Reading eBooks – 33%.
  6. Playing Games – 29%.
  7. Reading Magazines/Newspapers – 28%.
  8. Listening to Music – 18%.

It’s impressive that ebooks beat out games (almost to the point that it makes you wonder about the accuracy of the survey).

It’s also worth noting that for all the hype of the iPad being an eReader and Apple trying its best to force the iPad into the eReader niche only 33% of users listed reading books as one of the main things they do. They had up to 5 slots and only 33% of them chose reading ebooks.

The numbers add up to 356%. Not sure exactly how those 5 choices were tallied up – Guessing they just counted a vote for ebooks if it was listed in any of the 5 slots.

33% of 1 million? 33% of a couple million?

The Press not only wrongly categorize the iPad as an eReader they also compare iPad sales figures against eReader sales figures.

If this survey is correct (and it’s positive about the iPad so the Press will assume it is) then it means only 33% of iPad owners are actually reading books on it.

Let’s say 2 million iPads have been sold so far. And that 5 million sell this year.

That would mean 660,000 people reading books on their iPad so far and 1.66 million iPads that are used for reading books by the end of the year. That brings up 3 questions -

  1. If only 33% of iPad owners read books – That’s 1.66 million by end of 2010. How significant is that? Obviously not as significant as pretending every iPad owner reads ebooks.  
  2. Do people who read on the iPad buy and read books as often as Kindle owners (and owners of other dedicated eReaders)? If not, what is the difference?  
  3. Are these people who weren’t reading and now are reading because they can get ebooks on the iPad? Are these people who would have bought a dedicated eReader - If so, are they reading less or more?

The figure of 33%, if correct, gives us a starting point for guessing lost eReader sales.

Guesstimating lost eReader sales

Assuming 2 million iPads have been sold so far we get 660K people who read ebooks on the iPad.

  • Let’s say half of them did not consider an eReader. That leaves 330K.
  • Let’s say 50% of the remaining  would have ended up buying an iPhone or iPod touch or some other multi-purpose device. Simply because being able to do multiple things appealed to them. 
  • We’re left with 165K lost sales.

It’s fashionable (as in this survey) to refer to ‘so many iPad sales in just a couple of weeks’. However, we had -

  • January 27th to April 3rd. When people were delaying their purchases. 
  • April 3rd to May 21st. When iPads were actually available.

That’s over 3 months and 3 weeks. Let’s say 3.75 months. So eReaders lost 165K units of sales in 3.75 months. That’s 44,000 lost ereader sales a month.

What eReader sales might we lose over the course of 2010?

So far we’ve had 165,000 lost sales at the rate of roughly 44,000 sales lost a month.

Over the next 7 months in the best case scenario sales losses occur at the same rate – which equates to an additional 308,000 lost. That means a total loss of 473,000 sales. A significant loss but not a huge one.

In the worst case scenario the rate of lost sales keeps going up and we’re losing an average of 100,000 sales a month. That would mean 865,000 eReader sales lost to the iPad in 2010. Pretty significant – However, it still wouldn’t kill eReaders. In fact, they’d probably sell more than they did last year (assuming 5 million in 2009).

That 865,000 sales lost number is pretty much the upper limit. It’s assuming 100,000 sales lost a month from here on out.

In the worst case the iPad will eat up 20% of eReader sales

It’s obviously a very different figure for ‘lost eReader sales’ if you compare number of iPads sold against number of eReaders sold. However, as this survey shows, only 33% of people read ebooks on their iPad. So it’s pretty unrealistic to count the other 67% of iPads as ‘lost eReader sales’.

In the realistic worst case scenario we lose 865,000 eReader sales to the iPad which would be less than 20% of eReader sales for 2010.

If you want to play games with numbers you could claim that all 33% of iPads that are used for reading books are lost eReader sales (even though they’d probably have been iPhone and iPod sales if the iPad wasn’t around). If we do go with that and we have 5 million iPad sales, then we get 1.66 million iPads sold that were lost eReader sales.

If 5 million eReaders were supposed to be sold this year then a loss of 1.66 million is 33%. A huge number but it’s still not a big enough number to kill the eReader. Also, with this we’re assuming that just 3.34 million eReaders sell this year. That’s unlikely – Amazon alone might sell that many Kindles.

Basically, the iPad is doing exactly what you’d logically think it would – stealing chunks of various markets (iPod, Mac, Netbook, Laptop, Kindle, etc.) and combining those to get big numbers – at least so far.

What’s the benchmark for the iPad to be considered a huge success?

If you’re thinking ‘revolutionary and magical’ and a new paradigm of computing then it’s probably tens of millions of units. That would mean hitting 5 million or more in its first year.

If Apple persists in going with the eReader route then it can keep claiming it has huge comparative numbers even though only 33% of them actually read ebooks. This is probably what Apple is going to do. Pick markets like Tablet PCs and eReaders that are small and try to show that the iPad dominates them. It’s hoping that the buzz gets lots of people into buying the iPad.

That in turn would let Apple hit economies of scale and sell the iPad at a more compelling price point.

The 33% number is really surprising. Guess the Apple reality distortion field had affected me too because it seemed like 75% of the people who bought an iPad talked about reading lots of books on it.

Is it a surprise that Publishers are claiming strong iBooks sales?

After Apple announced that 1.5 million ebooks had been sold in the first month on 1 million iPads you’d think it wasn’t a very significant sales channel for ebooks.

However, Publishers beg to differ.  

Publishers claim iPad is the #2 ebook seller and then sales double, triple

Notice the interesting and impossible details revealed (when you piece them together in a logical way).

First, we get –  

For most companies surveyed iBooks sales comprised 12 to 15% of all ebook sales before the new models landed, quickly equaling or surpassing Sony as their number two ebookseller. 

Alright - It seems Publishers are saying that even before the release of the iPad 3G iBooks accounted for 15% of ebook sales.

Really? One App (not even the best one) on a device that does so much more than just read is selling more ebooks than Sony Reader Store?

Next, we get -

One publisher saw a three-fold increase over last weekend alone; another said sales were up more than 400% in that period.

At another company, sales for the week ending last Sunday, iBooks sales of their top titles nearly doubled.

So iBooks went from 15% to 2, 3 or 4 times (30% to 60%) in sales.

All this when we have had just 1.5 million iBooks book downloads and some of those must have been public domain free titles.

It doesn’t make any sense – or does it

Let’s be generous and say that 1 million out of the 1.5 million iBooks downloads were paid books.

That means those 1 million books downloaded accounted for 20% or more of all ebook sales in that month.

Quite frankly that’s ludicrous. Except you start thinking -

  1. Penguin doesn’t have its new titles at Amazon any more. 
  2. Lots of the new titles from Agency Model Publishers are at $14.99 and probably not selling well. 
  3. Random House aren’t selling on iBooks.
  4. Only 30,000 titles are available so perhaps users are buying more of the obvious choices.
  5. Perhaps it’s the initial rush.

It still doesn’t make a lot of sense.

Either the boycott of Agency Model Publishers is working very well or Publishers are straight out lying.

It would be nice to know how sales last month compare with sales in December 2009 and with sales before the Agency Model came into play.

Got to love how the data was collected -

Publishers Marketplace spoke to a number of US publishers on condition of anonymity with “responses from multiple houses”

Let’s be as vague as possible so we can deflect all questions and deny any responsibility later.

Pretending to be an eReader is better for the iPad

It’s pretty annoying to always have the iPad compared with Kindle and Nook and to hear all sorts of strange things -

iPad is the best-selling tablet – selling more than the Kindle tablet.

iPad is going to become the #1 eReader.

Kindle was the best tablet before the iPad came out.

There are two main ideas that are being propagated -

  1. The iPad is an eReader and it takes on eReaders like the Kindle and Nook and Sony Reader. 
  2. The iPad is a Tablet and eReaders are tablets too.

It all makes sense when you dig deeper.

The real competitors the iPad is scared to be compared against

There are actually two categories that the iPad is much closer to than eReaders -

  1. Netbooks. 
  2. Mobile Phones.

Why Apple doesn’t want the iPad compared with Netbooks

The rhetoric of revolutionary and magical aside the iPad is extremely similar to netbooks. Yet if it were to take on the netbook there are only 2 possibilities -

  1. Apple sells 2 to 3 million iPads in 2010 and that pales when compared with the 20 to 30 million netbooks sold. It’d come in at #4 or #5 and that doesn’t sound very good.
  2. Apple sells 5 million iPads or a bit more in 2010 and still can’t impress when you consider the total number of netbooks sold. It’d still be #3 or #4.

So Apple does the smart (or perhaps cowardly) thing and shies away from netbook comparisons.

Why Apple doesn’t want the iPad compared with SmartPhones

Notice how the iPad is identical to the iPhone in almost everything except size and name and inability to be used as a phone. They have the same operating system, they look the same, and they have the same closed eco-system fed by app developers.

Yet if Apple let the iPad be compared with the iPhone they can’t win. There are 85 million iPhones and iPod touches. A few million iPads sold in 2010 wouldn’t even register in people’s minds.

Apple goes for easy markets – even if they aren’t accurate

Apple is scared to take on netbooks and it definitely does not want comparisons with the iPhone. It therefore picks two other niches to be in -

  1. Tablet PCs. This is somewhat fair since it is a tablet.  
  2. eReaders. This is totally inaccurate since it’s not a dedicated reading device.

Why being considered a ‘Tablet’ is good for the iPad

There is no Tablet that’s sold a significant number of units. In fact every Tablet has been an abysmal failure. That means Apple sells 1 million iPads after 3 months of hysteria and claims it’s the #1 Tablet.

There is such lack of competition in Tablet PCs that writers are forced to pretend that the Kindle is a Tablet.

iPad is a better tablet than the Kindle tablet sounds much better than – iPad is the best tablet because there aren’t really any other Tablets.

Putting the iPad into a non-existing category creates the illusion that the iPad was so good that in a month it became the #1 Tablet. It plays into the illusion of it being something magical.

Why pretending to be an eReader is good for the iPad

There are dual benefits -

  1. Apple can trick people interested in buying a dedicated eReader into buying an iPad. Since eReaders are an exploding and emerging market it’s especially easy to pass off any device as an eReader and well worth it.
  2. Amazon and B&N and Sony are all silent on numbers. This lets Apple claim it’s the #1 eReader in sales.

eReader companies are doing a particularly bad job of fighting this misconception.

The Paradox of Being Revolutionary and not competing with established markets

Let’s contrast the rhetoric -

iPad is revolutionary and magical.

iPad is going to transform personal computing.

iPad is defining the future of mobile media and computing devices.

With the reality -

  1. iPad isn’t comparing itself with the computers and PCs and laptops it’s claiming it’s going to replace.
  2. iPad isn’t even comparing itself with netbooks – which are a newer, rapidly growing market.
  3. iPad isn’t comparing itself with mobile phones.

It’s revolutionizing personal computing because it sold 1 million iPads – Yet Windows 7 has sold 100 million copies. Doesn’t sound like a revolution to me.

The iPad is so revolutionary that it’s comparing itself with Tablets – A category so devoid of competition that we couldn’t even name one. It’s so magical that it’s pretending to be an eReader and steal off some of that market.

It’s very smart reality distortion – However, it isn’t reality

We know why Steve Jobs is doing this. It’s better to start off in smaller, weaker markets and try to dominate them and then move on to bigger markets.

It might work. Perhaps enough people will buy the #1 Tablet Rhetoric and some people will even fall for the Most colorful eReader nonsense. And then Apple can get to 10 million iPads sold and keep growing and eventually get enough sales to pretend it’s revolutionized computing.

All that Apple has revolutionized is marketing and locking out competitors. It’s admirable that Apple and Steve Jobs can so thoroughly convince some people that the iPad is revolutionary. However, it doesn’t become revolutionary just because you talk a portion of people into believing its revolutionary.

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