Why?

Because Android just got an update that gives new meaning to ‘Taking Advantage of the Power of the Default’.

Platforms and the Power of the Default

A platform can set the defaults, i.e. the apps users are first pointed to, the apps that are downloaded by default, the apps that show up on the first page and on the most visited pages.

That gives a platform a huge advantage whenever it decides to release an app of its own. Apple took some advantage of the power of the default when it released iBooks - It did a few things, though not many, to make sure iBooks was the first reading app that users were exposed to.

Android Market’s Books section shows Apple was extremely generous to rival ebook apps

Apple gave iBooks a bit of an edge but Apple was rather civil to rival ebook apps - until the recent push to impose a 30% tax. Note: Apple hasn’t come out and said eBook reading apps will be taxed. However, we can all agree that Apple hasn’t promised to exclude eBook apps from the tax either. That suggests it might be waiting for the right moment.

Apple seems like an angel compared to what a rival platform, Android, is doing. The Android Market is taking the power of the default to a whole new level.

Android Market added a new section titled ‘Books’  – It goes side by side with Android Apps. The big thing is that ‘Android Books’ only has books from Google eBooks. It’s basically the equivalent of setting up a sub-platform on a platform, claiming it’s the ‘Books Market’, and then only showing books from the Platform provider. It’s hilariously unfair.

To be absolutely clear of how big of a contrast this is -

1. Apple provides one app in its App Store that you can optionally download. Apple’s ‘Books’ section of the App Store has everyone highlighted. There are tens of thousands of books and ebook reading apps.
2. In the Android Market, there is now a new Books market that has books only from the platform provider. Everyone looking for books will first go to the Android Books Market, and there they will find nothing except Google eBooks.

Not sure how Google thinks it can get away with this.

Android Books maximizes the power of the Default

Will users search within the Android app store and find the ‘Books and Reference Apps’ section and look at the 12 paid apps and 12 free apps that are highlighted? Or will they look at the prominently featured ‘Android Books’ section of the Android Market and just go there most of the time?

It’s almost impossible to search for book apps in the Android Market if you don’t already know what you’re looking for. Now, on top of that invisibility for reading apps, you have visibility for the ‘Android Books’ store on every single page of the Android Market – It just so happens that the ‘Android Books’ store consists solely of books from the platform provider.

Android is showing us how you can really use the power of the default to get an unfair advantage.

1. Android Market has an apps section and a books section. Everyone equates the books section with where you go to get books.
2. The Book Apps section of Android Market, and the eReader Apps in it, are given low visibility. The low visibility for book apps and the poor search feature in the Android Market make it hard to get to book apps - it’s as if they don’t exist.
3. The Books section of the Android Market, which is prominently featured, only has books from the platform provider.

For users that don’t know there are options, or users who don’t want to take the time to search through the already hard-to-search Android App Market, the only thing that exists is the default.

How can a Nook App or a Kindle App compete when the default Books Store only has books from Google?

It should be painfully clear that Platforms want ebook profits for themselves

Here’s the current status quo -

1. Apple was very decent, but now there’s a chance it will extends its 30% tax to ebook apps. Apple could come out and say ‘No tax for ebook apps’, but it hasn’t – It seems quite likely that all content sales will get taxed eventually.
2. Android Platform has lost its mind. It’s created an Android Books section that only features its own offerings. Combine that with the low visibility for book apps on Android and it means that most reading apps and book apps might as well be invisible.

eBook apps now face huge barriers and uncertainty on two of the big mobile platforms. That only leaves Blackberry and Nokia/Windows 7. If either or both of those start becoming more successful there’s a chance they will start behaving like Apple and Android.

The free ride is over.

The ‘Kindle App for iPhone is the Best Business Decision of the Decade’ illusion is now painfully apparent as an illusion.

All the companies putting a ton of effort into enriching other companies’ platforms are getting what they deserved for being so gullible. Whether it’s an ‘open’ platform like Android, or a ‘closed’ one like Apple we now know two things -

1. Platforms always want a cut. Any company that makes a lot of profit from a platform should be aware that sooner or later the platform will want a 30% cut on revenue – which translates into most of the profit.
2. Platforms always give their own offerings an advantage. A ‘closed’ and ‘evil’ company like Apple does this by featuring its eReader app more prominently. An ‘open’ and ‘good’ company like Android does this by creating an entire Android Books Store that has nothing except its own offerings.

Platforms control everything and whether they use a visible ’30% tax’ or an invisible ‘power of the default’ strategy it should be clear that the Platform always wins.

Let’s take a quick look at the various styles available. This isn’t a post about which case is best/sturdiest/most reliable - It only looks at the different styles of cases available.

Existing Kindle Case Styles

The Kindle Store offers the following -

1. The standard boring case from Amazon. It looks good and it’s leather but even if you love it you have to admit it’s more Clark Kent than Superman. There’s also the little matter of there not being a groove at the back for the strange string protector thing.
2. A Kindle sleeve from Belkin that people love. It’s interesting – not sure what the aim of the big block in the middle is but it’s alright. These are the most popular option after the default Kindle cover.
3. M-Edge executive jacket. It’s pretty unremarkable – It’s good and it looks alright and it’s well reviewed. It does do a good job of holding the Kindle very securely.
4. A Neoprene Kindle Sleeve from Belkin – One of the winners. A few very pretty patterns and the design is interesting too – They make the case curve in a bit at the middle to improve its grip on the Kindle.
5. M-Edge Go Kindle Jacket – This makes the standard Kindle case seem exciting.
6. Belkin Pleated Kindle Sleeve - Quite a unique design.
7. M-Edge Trip Kindle Jacket – Finally something from M-Edge that looks interesting. There are a variety of colors and the Navy and Navy Blue versions are perhaps the best.
8. M-Edge Latitude Kindle Jacket – M-Edge is on a roll as it manages another cover (sorry, Jacket) that doesn’t put you to sleep. There’s a little bit of roughness to it which actually looks quite good.
9. Belkin Knit Kindle Sleeve – Belkin keeps coming up with these interesting designs. This has a strip along the top like knitted gloves and mitts sometimes do – It looks quite appealing.
10. Marware Eco-Flip – One of the winners. While everyone is going horizontal MarWare goes Vertical – It lets you flip up your Kindle Case to open it. It also has some great twists – You can run your hand through a strip/slot at the back to get an iron grip and the Kindle itself is held in a straitjacket-like grip. The fact that it’s only available in black is disconcerting.
11. MarWare SportGrip Fitted Case – Not a fan of this. It is, however, quite a different design and the most compact. Available in a range of colors – some of which go surprisingly well with the Graphite Kindle.
12. Timbuk2 Quilted Kindle Envelope Sleeve – Don’t really have anything to say about this. It’s the 39th most popular case and it still has 69 reviews. How many Kindles is Amazon selling?
13. MarWare Eco-Vue - This is a case that opens horizontally. Not interesting at all.
14. Kate Spade Canvas Kindle Cover – This one is really good and really expensive. $85 for a case – why not go all-out and make it $139? The Jubilee Stripe Print version has red and pink stripes and looks great and is probably something a man should definitely not carry. The Hello case has Hello on the Front – thankfully it doesn’t have Kitty on the Back. If the price weren’t $85 the Jubilee Print version would be one of the winners – Perhaps it still is.
15. Built Reversible Neoprene Kindle Sleeve - Very intriguing. It’s a good concept - they mess up the execution and don’t have a version which has interesting patterns or pretty colors on both sides of the reversible sleeve.
16. Diane von Furstenberg Canvas Clutch - No, DvF couldn’t bear to call it a case. Darling, If I’m going to put my name on it – it better be a clutch. The Price is $85 and there are 4 designs – 1 is spectacular, 1 is good, and the remainging two are better suited for carry-on luggage.
17. M-Edge Convertible Kindle Sleeve – A useful sleeve/case hybrid where you can either keep your Kindle inside the sleeve or mount it on the outside of it.
18. Kate Spade Great Gatsby Canvas Cover – This one is very well done. One of the winners if you’re a woman. There’s also a Great Expectations version and an Importance of Being Earnest version - However, both fail to meet the expectations set by Mr. Gatsby. This is a ’designer’ case so it too has to be $85.
19. Am leaving out a few MEdge cases because they’re beginning to look like failed sheep cloning experiments. Must they build all their cases off of the same few, boring design elements?
20. Cole Haan Hand-Stained Pebble Grain Cover. This is quite a beautiful case – despite the try-hard name. Wish they wouldn’t put a Cole Haan on the outside of the case and let the quality speak for itself. Not one of the winners because a few of the other Cole Haans are exquisite.
21. M-Edge Leisure Kindle Jacket – Protects your Kindle from sand and moisture but not from dashes or boring designs.
22. A few of the Cole Haan cases. They’re all $100 to $130 and most of them are beautiful. We’ll discuss the two winners later. There isn’t really anything especially remarkable about the design but there doesn’t need to be – they are just every elegant and well done.
23. Kate Spade Patent Leather Kindle Cover in Fire Engine Red. This is just beautiful. Also available in snapdragon pink, and black. By the time the ‘naming expert’ got to black she was out of ideas. Martian Black … No… Moonlit Black … No no … let’s just go with black.
24. Cole Haan cases in Floral Print – These are beautiful. Definitely amongst the winners. You get your choice of brown or green - both are to die for. Nothing for the men though – unless you’re into gardening.
25. M-Edge Touring Sleeve – Interesting and looks quite good in Orange.

M-Edge has really taken a toll on my not-so-delicate sensibilities. It has a gift for throwing together colors that never should be allowed near each other. For every good looking M-Edge case there’s another that looks scary.

My 7 Favorite Kindle Case Styles

While you can find all 25 Kindle cases discussed above at Amazon’s Kindle Store these are the 7 styles that get my strong approval -

1. Cole Haan Floral Print Cases – If you can afford to spend $99 these are definitely the ones to look at first. 
2. Kate Spade Jubilee Stripe Case. If it weren’t $85 it’d be perfect. 
3. Neoprene Kindle Sleeve from Belkin. Both the Vine and Shadow Flower designs look great. Easily the best value for money.
4. Kate Spade Patent Leather Cover. Way too expensive at $125 but how can you argue when it looks that good.
5. Kate Spade Great Gatsby. Another ‘wish it were less than $85′ beauty. 
6. Belkin Knit Kindle Sleeve – It just has such a comfortable look to it. It’s also great value for money.
7. Marware Eco-Flip Case – It Flips open vertically and has the iron-hand grip. It does need more color options and perhaps a bit of polish.

Honorary Mention - Every Cole Haan case not on the above list, Belkin cases, Kate Spade cases.

A few of the best Kindle Cases aren’t available in the Kindle Store

In addition to the 7 recommendations above here are some beautiful Kindle cases -

1. Oberon Kindle Covers. Have no idea why these aren’t in the Kindle Store. They’re amazing – you’ll want to buy 2 or 3 of them.
2. Etsy – Just search for ‘Kindle Case’ and lots of beautiful hand-made covers will come up.
3. Octovo has some good-looking Kindle covers.
4. StrangeDog – The most beautiful and hard to get Kindle cases. Check out the 9 Kindle 2 cases listed on the Strange Dog site to see what I mean. Note: All covers were sold out as of December 3rd. StrangeDog cases would be #1 if they weren’t out of stock.

Those are the Kindle cases that come to mind. Oberon, StrangeDog, and some of the Etsy cases are as good as the best cases available in the Kindle Store.

Today, B&N released the Nook Color SDK. This will let developers build apps for Nook Color (not for Nook) and also port over Android Apps.

Kindle vs Nook Color suddenly gets a whole new dimension. We’ve already reviewed Kindle vs Nook Color vs iPad and established they’re three different devices aimed at three different markets.

Let’s see what things developers should keep in mind when considering the Kindle and Nook Color as platforms. After that, let’s try to guess which will get better apps.

Kindle vs Nook Color – The opportunity for Apps

Pros and Cons of making Kindle Apps

Here are the reasons making Kindle Apps makes sense -

1. There’s a captive audience of somewhere between 3 and 6 million. Perhaps another 1 million Kindles get added after Oprah’s Kindle recommendation on Monday.
2. There’s little competition – Amazon is letting in apps slowly so you have few competitors.
3. Amazon knows how to sell. You have to assume that if you make a good app it’ll sell well.
4. Some of the apps released so far have done very well – Scrabble and Solitaire both spent a lot of time at the top of the charts.
5. Electronic Arts must have found something for it to keep developing apps. It has now released 4 apps – If it wasn’t making money you’d think it’d stop after the first 1 or 2.

There definitely is an opportunity – We just don’t know exactly what it is and exactly how big it is.

Here are some of the things to keep in mind -

1. Kindle owners are buying the device primarily for reading books. Apps are an add-on.
2. Kindles use eInk and don’t support color or animation.
3. You have to test on 4 devices – Kindle 3, Kindle 2, Kindle DX, Kindle DX 2. Kindle WiFi and Kindle 3 are similar enough that you can leave one out. Basically, you’ll be limited by the speed and processing power of the 1st Kindle DX and the Kindle 2 US version.
4. No one knows any of the numbers involved – We don’t know how many Kindles have been sold and we don’t know how many Kindle Apps have been sold.
5. It’s a completely separate SDK. It’s based on Java and it’s quite easy to learn – However, it’s still a completely new SDK.

It’d be good to hear some details from Amazon – Revealing sales figures for the successful apps would encourage more developers to jump in.

Pros and Cons of developing apps for the Nook Color

Here are the reasons making apps for Nook Color makes sense -

1. Nook Color is meant for apps. B&N might say no – However, after playing around with it for a couple of weeks, let me assure you this thing needs apps like England needs the World Cup.
2. There are estimates that Nook Color might sell 1 million units by end 2010. Sales are definitely good – as are reviews.
3. At the start it’ll be a less competitive market.
4. There’s just one device to develop for. This is hugely significant when you consider testing time and cost.
5. Existing Android Apps can be ported over.

Nook Color is an App-Bereft Tablet and not a Reading Tablet. Additionally, it’s very well suited for apps due to having an IPS LCD touchscreen.

Things to keep in mind -

1. There might just be 1 or 2 million Nooks at the time the store opens.
2. At least 25% of users are going to root their Nook and get Android Apps for free. They are ruled out as customers.
3. B&N wants to limit apps to reading related apps.
4. There might be very strong Android tablet competitors arriving in 2011 which might slow down Nook Color sales.
5. B&N is selling this as a reading tablet so 25% or so of the audience might not be interested in apps. That’s another 25% of customers lost on top of the 25% that root it.

Basically you’re looking at only 50% of Nook Color owners being potential customers for your apps. If Nook Color sells at a good pace it won’t matter – However, if sales are slow then the market is just too small.

The biggest challenge for B&N is that users are needed for developers to get interested but apps are needed for users to get interested in Nook Color. How are they going to get over this chicken and egg problem?

The Crux

Kindles are a huge market (relatively) but with the limitations of eInk and with users that might not be interested in apps. Nook Color, at the moment, is a small market but with users that will probably be interested in apps (at least 50% ought to be) and a device that has a LCD color touchscreen.

It’s a trade-off. It might not be a bad idea to make 1 or 2 apps for each and then pick the market that’s more fun to work in.

My Recommendation: If you’re an Android developer – make Nook Apps. If not, then start with Kindle App Store and then later try Nook App Store. Read all the terms carefully – There are things like bandwidth costs and a focus on reading related apps which you MUST keep in mind. Both stores are very clear about what kinds of apps they want and the market is, in both cases, full of people who are reading-oriented.

Kindle vs Nook Color – Which will get better Apps?

This might seem like a trick question. Isn’t the Nook Color going to get far better apps – It has color and a touchscreen.

However, the motivations for developers are varied -

1. The market opportunity.
2. How well they get treated.
3. The challenge.
4. The freedom they’re given.
5. How good the Development Kit is and how easy it makes things.
6. What the review process is like.
7. What the users are like.
8. A match between developers and users’ interests.
9. The ethos and values of the App Store and the App Store company.
10. How much fun it is. This is probably the key determinant.

So a developer is factoring in all these aspects and picking one or both app stores. And all along the way he’s fighting reality i.e. money, rules and regulations, deadlines, the need to eat food, etc.

Reasons Kindle might get better apps

There are actually a lot of reasons why Kindle might get the better apps -

1. There’s probably going to be more money in Kindle Apps for at least the first 1 year.
2. Kindle Apps have a head-start. The number of apps out might be small but developers have been working on apps since January and some partners like Electronic Arts from before January.
3. Kindle users are buying apps.
4. Kindle users don’t have a fall-back like Nook Color users do (the latter can root their Nook and use Android Apps).
5. Amazon seems to have a good quality bar – None of the apps released so far have been terrible.
6. There’s a pretty big challenge – Any developer who can make a good app on eInk is going to get a lot more satisfaction than on LCD. The challenge also forces developers to be a bit more creative.
7. Developers are very invested. By making it a limited Beta, and making developers wait to get in, Amazon’s made it a bit of a prize to be developing Kindle apps. 

The biggest two things working in the Kindle’s favor are definitely the possibility of more money and the head start the Kindle App Store has.

Reasons Nook Color might get better apps

The first problem here is that there might not be that many developers willing to work on Nook apps. That’s B&N’s biggest challenge.

That being said there are still a lot of reasons Nook Color might have the better apps by end 2011 -

1. There’s just one device. As a developer can’t explain to you how significant this is.
2. You have color and animation and video and a pretty powerful processor and a decent amount of memory. Nook Color is good, solid hardware to work with. 
3. B&N is not doing a limited beta. The benefits of a limited Beta are that developers who get in, especially those who wait and then get in, are very invested. The downside is that you can’t predict the winners so you might be keeping out hundreds of rock star apps.
4. Android apps can be ported over easily. There’s a big, huge supply of apps available. All the Nook Color needs is one big hit and then hundreds of companies will start porting over their apps.
5. Nook SDK is based on Android. There are a ton of developers who are very familiar with Android, and more importantly, love it.  
6. Nook Color only has WiFi. This means developers never have to worry about wireless charges like they have to with the Kindle.
7. B&N is fighting for its life. It’s going to give developers more leeway and it’s going to take bigger risks and that increases the chances of both great apps and great failures. 

Android Apps are the biggest potential wildcard – If one developer makes $500,000 in the Nook Color app store there will suddenly be 10,000 Android Apps being ported over.

The second huge wildcard for Nook Apps is that everyone gets a shot – Developers that no company in their right mind would pick for a ‘limited beta’ might be the one to make the ‘Angry Birds’ of the Nook App Store. Plus you need really bad apps to better highlight the really good apps.

My prediction – The first big hit on Nook Color will open the floodgates

There are tens of thousands of Android App Developers waiting to see how apps for the Nook Color do. The first big hit and they jump in. At that point two things happen -

1. Nook Color pretty much bows out of the Reading Tablet category. The Apps will take over.
2. Kindle App Store gets left behind but Amazon’s position in the eReader market grows stronger.

Kindle is not under threat from Nook App Store at the moment. The real threat will be if the Nook App Store takes off and then B&N opens it up to Nook 1 and releases a Nook 2 that works well with Apps.

My prediction: Kindle App Store will have better apps until 5 to 6 months after the first Nook App makes more than $250,000 in profit. After that the Nook App Store will become huge and hugely powerful. The Kindle will actually see a relative increase in sales as apps dilute Nook Color as a reading Tablet but eventually the upsurge in Nook Color Apps will trickle down to Nook 2 and Nook 1 and cause huge problems for Amazon.

1. Kindle for Android. 
2. Kindle for Symbian (Nokia Phones).
3. Kindle for Palm Pre. 
4. Kindle for Windows Mobile. Perhaps Kindle for Windows Phone Series 7 (how about a short, cute name Microsoft?).
5. Kindle for Linux.
6. Kindle for Chrome.
7. Kindle for non-smart cellphones.
8. Kindle for Tablets other than iPad (if they don’t use Android like Dell Streak does or don’t use WebOS like HP Hurricane will).

It’s worth exploring each of these in further detail.

The case for releasing additional Kindle Apps

Kindle for Android Pros and Cons

There are some obvious benefits of releasing Kindle for Android -

1. Huge number of cellphone providers adopting Android.
2. Lots of Tablet manufacturers adopting Android too.
3. You can get in before Google Editions releases.
4. There aren’t very many ebook apps serving Android users at the moment.
5. It’s the anti-Apple OS and helping strengthen it makes Apple products a tiny bit less attractive.  

The downsides are obvious – you might create an enemy more powerful than Apple. 

Kindle for Symbian (Nokia Phones)

Symbian accounts for 46.9% of smartphone sales. That’s 78.5 million units a year. Kindle for Nokia would reach a lot of potential customers.

Nokia is huge in Europe and Asia and Amazon are one of the few global ebook retailers. It’s a natural fit. It would make the Kindle much more appealing to European readers. Perhaps most importantly it would provide a channel into markets that Amazon doesn’t yet have a good foothold in.

The downside is that Nokia is struggling a bit with its smartphone direction (well, at least it seems that way) and there are a lot of devices to test. The support aspect might be a nightmare.

Kindle for Windows Phone 7 Series (or for Windows Mobile)

There are still a lot of phones with Windows Mobile. Windows Phone 7 Series is supposed to be very good and there might be an uptick in adoption.

It would not be that much of a jump to go from Kindle for PC to Kindle for 7 Series.

The downside is that Microsoft has been losing mobile OS market share consistently.

Kindle for Palm Pre

Now that HP has bought Palm WebOS becomes a very important platform. You have -

1. The upcoming HP Hurricane tablet that will use WebOS. 
2. Palm Pre and other Palm smartphones using WebOS.

A lot of people who want a Tablet and are unhappy with Apple’s closed ecosystem are looking for an alternative and HP’s Hurricane (slated for Q3, 2010) might fill the gap. That would necessitate Amazon building a Kindle for WebOS.

The downside is that Palm sold to HP for a reason. They were doing really, really badly. HP’s Hurricane is very far away and while HP is a force to be reckoned with there’s no guarantee they’ll do well in Tablets or even cellphones.

Kindle for non-smart cellphones

As reading on cellphones in Japan explodes Amazon has got to be wondering if cellphones could be turned into reading devices in other countries.

The vast majority of cellphones are not smart and yet their owners are just as likely to read books as smartphone owners (even if there is a difference it’s probably not huge). There are a few good reasons for Amazon to explore non-smart cellphones -

1. There are literally billions of non-smart cellphones. 
2. Users carry them everywhere - reading on cellphones could fill in all the little breaks they get. 
3. There’s very little competition.

The downside is that the carriers would want a big cut – something Amazon can’t really afford. Kindle for cellphones would have to find a way to bypass the carriers and that might be a non-solvable problem.

Kindle for Tablets other than iPad

A lot of these tablets are going to be covered by Kindle for Android, Kindle for PC, and Kindle for WebOS. It does leave some tablets.

It’s probable that Amazon will wait a year or so and see what Tablets (if any) succeed and then if needed create a custom Kindle App. Just as there is a custom Kindle for iPad although iPad uses iPhone OS we might see custom Kindle Apps for the Tablets that win out even if they use Android or WebOS.

Amazon has a lot of incentive to produce a good Kindle app for these Tablets. It’s best for Amazon if there is lots of competition in the Tablet market and no clear winner that could take over reading on Tablets.

Amazon are currently helping sell a non-trivial amount of iPads thanks to their excellent Kindle for iPad app. They probably want to start helping other Tablet companies too.

Kindle for Linux

Adding a Linux app would add to the Windows and Mac versions and cover the unholy trifecta of operating systems. It also takes care of the rather strange situation that Kindle uses Linux but there isn’t a Kindle for Linux app.

The downside is that there are so many flavors that support and testing would both be incredibly tough.

Kindle for Chrome

The upside is that you get another non-Apple OS that you strengthen and one that might end up in lots of mobile devices and lots of tablets and netbooks.

The downsides are that it’s in its infancy and there aren’t very many products coming out with Chrome.

What will be the next Kindle App to come out?

My money’s on Kindle for Android. There have been sightings of a Dell Streak flyer advertising Kindle on the Streak so it’s pretty much a given that Kindle for Android will arrive before or with the Dell Streak. That should be soon.

Close behind in probability is Kindle for Symbian (mostly Nokia phones). It has 46.9% of the smartphone market and has great reach in Europe - a market Amazon probably want to focus on after the US.  

After that you get three interesting choices – trying to address the almost unsolvable problem of non-smart cellphones, believing that Microsoft can win with Windows Phone 7 Series, or assuming HP will turn WebOS into a big success. The latter two would be good bets to make. Microsoft and HP are both underrated giants and there’s a good chance at least one will create a decent solution.

Ladies and Gentlemen, we should expect to see Kindle for Android, Kindle for Symbian, and Kindle for WebOS this year. Amazon has been developing its platform and the Kindle service faster than the Kindle itself and don’t see that strategy changing much.

Where I’m definitely wrong in terms of sales potential of ebooks via mobile is China, India, Russia, and Brazil. Mostly for two reasons -

1. Most mobile owners in these countries can’t afford a dedicated eReader and might not be able to for a long time (2 to 4 years or more). This was pointed out in a comment (thanks!).
2. The sheer numbers of mobile subscribers means that even single digit ebook reading adoption rates would translate to huge ebook sales. 

The number of mobile subscribers in these countries is highlighted by a recent post titled ‘Staggering mobile stats in Brazil, Russia, India, China’ at eMarketer.

There really are Ridiculous numbers of mobile phone subscribers in China, India, Russia, and Brazil

Here are the stunning numbers for mobile subscribers in BRIC -

1. China – 747 million. It’s projected to grow to 1.3 billion subscribers by 2014.
2. India – 525 million. Projected to grow to 853 million by 2014.
3. Russia – 174 million. Projected to grow to 200 million by 2014.
4. Brazil – 174 million. Projected to grow to 212 million by 2014.

Even 1% of that number (16.4 million) would be a tantalizing market. However, we can do better than just randomly guess at the market for books in these countries.

What are the sizes of the book market in China, India, Brazil, and Russia?

The numbers are really enticing when you dig a little deeper -

1. Beijing Review estimated China’s Book Market at $5.6 billion a year in 2004.
2. Russia’s book market is estimated at $3 billion a year in 2008 (courtesy the Frankfurt Book Fair website).
3. The Bookseller estimates Brazil’s book market at $1.7 billion a year in 2008.
4. India’s book market is estimated to be at $1.5 billion a year (courtesy Prayatna, figures are for 2005). The English segment is estimated at between 20% and 45%.

That adds up to $11.8 billion a year. Factor in the growth in India and China since 2004/2005 and these markets probably total up to about half the size of the US market ($25 billion a year).

Another point worth considering is that there’s a significant English-speaking population (courtesy Wikipedia’s list of countries by English-speaking population, the usual disclaimers apply) -

1. India has the second largest population of English speakers in the world (232 million). 
2. Even China and Russia have sizeable English-speaking populations – 10 million or so for China (alternate sources claim a 20 million figure) and 7 million or so for Russia.

The percentage of the population that understands English has been growing in both India and China and allegedly so has the reading population.

We have huge populations and huge book reading populations

The intersection between the book reading population and the cellphone owning population in BRIC ought to be reasonably high – Factors like living in cities, being middle class or better off, and knowing English probably increase the probability of both owning a cellphone and of reading books. 

It would be reasonable to estimate that at least the same percentage of mobile phone subscribers are book readers as is the case in the general population. Given that over 50% of the populations of BRIC have mobile phone subscriptions we ought to be able to reach 50% of the book reading populations in these countries.

If you don’t like that random estimate just cut it to 25%. It still leaves us with users who spend $2.95 billion a year on books.

Will all these mobile phone subscribers read books? Will they use Kindle for mobile?

We’ve already established (by means of totally random guesswork ) that 25% to 50% of the book reading populations of the BRIC countries are available as potential mobile ebook customers.

Which brings us to some questions (with answers/guesses included) -

1. Will users actually read on phones? Perhaps. People in Japan love to do it though they probably have very advanced phones.
2. Will users pay for books? This is a good question. It’s possible that wider availability of titles and reasonable prices encourage more book purchases. It’s also possible that book piracy takes off.
3. Will users use Kindle for Mobile? Given that the Kindle Store has lower prices than anywhere else (and that BRIC will be price conscious) it’s likely that they will choose Kindle for Mobile if/when they pay for ebooks.

This is the sobering part. We have a potential $11.8 billion market and 25% of that ($2.95 billion a year, a conservative estimate) is available via their mobile phones. However, there are several barriers to getting them to read on the phone and to pay for ebooks. We might only be able to capture 10% of the market.

How could Amazon leverage Kindle for Mobile in BRIC?

There are a few big weaknesses of the way English books and books in general are sold in these countries -

1. Unrealistic prices for books. For example – Books in India are priced close to their prices in the US.  
2. Low range and poor availability. A lot of books never reach BRIC countries and when they do the numbers are limited. All the transportation and storage issues affect availability (and probably the prices too). 
3. Not enough targeting of non-English speakers. If you have an ebook store you can sell books in other languages and add ‘shelves’ at minimal cost.
4. Low number of bookstores. Plus they’re difficult to get to and they’re not open 24/7. If you’ve driven in China or India you’ll realize that every trip to a bookstore is an adventure (that promises to be of the abruptly ending kind).
5. Lack of Infrastructure – The publishing and bookstore model is built for countries with very good infrastructure (roads and transport) and where lots of people have their own cars or other reliable means of transport. It breaks down in most parts of the BRIC countries.
6. Very high inefficiencies. Consider books that aren’t published in a BRIC country – They have to be shipped all the way, stored, displayed and sold. With mobile books it’s just a mobile download.

For a company like Amazon that loves kaizen and quality and improving things this is a fantasy. There’s almost no way to get into mobile books in BRIC and avoid greatly improving the status quo.

The question on potential market size is interlinked with the question of whether a good range of books is available at good prices and conveniently. The answer to the latter is most definitely not and it’s hard to answer the first.

The mobile ebook market in BRIC is a mystery

While we can say that there’s a huge potential market worth billions of dollars and that the current options and choices in BRIC (for reading on mobiles and reading in general) are terrible it’s hard to say what the reaction would be to a very good offering.

It’s the type of opportunity that might turn out to be colossal or might end up nowhere.

The good thing is that by selling ebooks and by targeting the major platforms (Nokia etc.) Amazon or another company could explore the BRIC market cheaply and quickly. It wouldn’t cost much to figure out whether the BRIC mobile ebook market is worth pursuing.

Here’s what Amazon is offering with Kindle for Blackberry -

1. US only. 
2. Supported devices include Bold 9000, Bold 9700, Curve 8520, Curve 8900, Storm 9530, Storm 9550, Tour 9630.   
3. You get the 400,000+ books in the Kindle Store at their usual cheap prices.
4. The basic reading and Whispernet functionality is enabled.  
5. There are 3 future enhancements slated – scrolling in addition to page turns, search, and creating notes and highlights.  

Kindle for Blackberry means that Amazon are now letting Blackberry owners read Kindle books without owning a Kindle.

Is it a good decision to let users get Kindle books without buying a Kindle?

A past post – Are Kindle for PC, iPhone Hedges? addressed this question to a certain extent.

The answer now, as then, is that letting users get Kindle books without buying a Kindle is a great idea -

1. It weakens the position of competing eReaders if they don’t offer their books on non-eReader platforms. 
2. Every single Kindle ebook purchase locks users into the Kindle ecosystem. 
3. Using Kindle software and buying Kindle eBooks makes users likelier to read more and graduate to buying a Kindle. 
4. There might be some Kindle sales lost - However, they are unlikely to be a lot and those users still buy Kindle eBooks.
5. The more Kindle eBooks are sold the stronger the Kindle Store gets and the stronger the Kindle gets.

An important thing to keep in mind is that most of these are long-term bonuses.

Amazon is setting up the Kindle for long-term dominance 

People are looking at things in the immediate to 1 year time-frame and assuming it’s a loss for Amazon i.e.

A Kindle for Blackberry user now means that the user will not buy a Kindle.

The other, equally myopic, perspective is that Amazon is hedging its bets and doesn’t believe in the Kindle device.

Actually, Amazon are looking at things with the long-term and very long-term implications in mind -

1. What happens in 10 years?
2. Can we dominate both eReaders and eBooks?
3. How do we get people to read more?
4. How do we get people who wouldn’t buy an eReader to read more?
5. What’s an easy introduction to the Kindle eco-system.
6. What moves are going to be hugely significant 10 to 15 years down the line.

It makes sense to let readers on as many devices as possible read Kindle Books and to introduce as many people as possible to the Kindle eco-system.

Kindle for PC, iPhone, Blackberry work in conjunction with Amazon’s other moves

It’s not just with Kindle for devices that Amazon is showing its long-term thinking. There are lots more examples -

1. The $9.99 prices and taking losses on books. 
2. Amazon Encore. 
3. Mr. Bezos talking about there being a Kindle 10.  
4. The speed with which Amazon have responded to competition (especially recently in response to Nook and iPad).
5. Letting authors get 70% of ebook prices.

Amazon intends to be the platform for all of Publishing and it’s certainly moving according to a 10 to 20 year blueprint.

What really happens with Kindle for Blackberry?

Let’s look at various groups of people and consider how Kindle for Blackberry affects them -

People with Blackberries and Kindles

They suddenly get a lot more bang for the buck -

1. They can read across Blackberry, Kindle, and other devices.
2. Books are synced and notes made on the Kindle are available on the Blackberry.
3. They can read more often.

They get a lot more value from their Kindle device and Kindle books purchases.

They also get locked in further into the Kindle’s eco-system and buy more Kindle Books.

People with Blackberries thinking about buying a Kindle  

Let’s say there are two wide sub-categories -

1. The first category think they don’t need a Kindle any more and don’t buy one.
2. The second category think a Kindle makes even more sense and buy a Kindle.

While we can speculate endlessly on which affects Kindle sales more, the real bonus for Amazon is that both categories buy Kindle eBooks.

People with Blackberries thinking about buying another eReader (non-Kindle)

This is very similar to the previous category – a lot more people start buying Kindle eBooks.

We also get a small number of people who decide to get a Kindle instead of another eReader as the Kindle with Kindle for Blackberry offers more value.

People without Blackberries choosing between Blackberry and Kindle

Here we run into a bit of a problem. Suddenly the Blackberry becomes the clear choice. It does lead to losses in Kindle sales.

However, there isn’t really much loss in Kindle eBook sales.

The Net Effect of Kindle for Blackberry

We get a net impact that is very interesting -

1. Kindle sales probably go down a bit. 
2. Kindle eBook sales probably go up a bit.

That, however, is in the short-term.

In the long-term Kindle for Blackberry users are likelier to buy a Kindle. Also, the number of Kindle for Blackberry users is going to be a lot more than the number of people owning a Blackberry that are considering buying a Kindle.

That means that in the long-term we get a lot more Kindle Sales and a lot more Kindle eBook sales.

The net impact of Kindle for Blackberry is going to be very positive for Amazon.

Readability changes that.

The Internet is getting worse and worse for reading

Instead of it becoming easier and easier to read websites it’s becoming tougher and tougher -

1. There are more and more ads – including advertisements hiding in content and targeted ads.  
2. Hardly any websites allow you easy options for changing the font size or type.  
3. Some websites even lock out the browser’s font size settings.
4. The text is competing with other design elements.

Now, we have a big step forward.

Readability is Making Reading Cool Again

Readability is an absolutely great tool for reading sites and blogs.

Here’s what they have to say -

Readability is a simple tool that makes reading on the Web more enjoyable by removing the clutter around what you’re reading.

What does Readability let you do?

Readability lets you strip away everything except the text and put the text into a style, font size, and column width that suits you.

At the Readability site you choose -

1. One of 5 different styles included an inverted colors style.  
2. One of 5 font sizes.  
3. The width of the columns.

Then you save the specified link as a bookmark.

On any page or site or blog press the bookmark to convert the site to your very own Readability enhanced version.

You can also easily print and email the text only version. The difference really is spectacular.

How do you set up Readability?

Here are the steps for Internet Explorer 8 -

1. Go to the Readability Page.  
2. Choose a style from newspaper, novel, ebook, inverse, and athelas. Remember to scroll down and see how the example text looks with your chosen style.
3. Choose a size from extra small, small, medium, large, and extra large. Again remember to scroll down and make sure you like the setting. 
4. Choose the margins – you have extra narrow, narrow, medium, wide, and extra wide.  
5. Right click on the Readability button/badge on the right side of the page and in the options choose ‘Add to Favorites’.
6. You’ll get a warning that you’re adding a favorite that might not be safe. It’ll ask you - Do you still want to continue? Click Yes.
7. The dialog will have the name Readability. Leave that and look at the option below which says ‘Create In’. Click that and select the Favorites Bar directory within Favorites.  
8. This will create a new Favorite in the Favorites Bar of your browser. That means it’ll show up right at the top near where the address bar and search box are (the browser’s search bar). You might have to adjust it so that it’s showing.

To use it – At any page just click on the Readability Button in the Favorites Bar (or you can click on favorites and then go down to Favorites Bar and then the Readability link). 

The site/blog/page will be instantly converted into text only with the style, size, and margin settings you chose.

Hopefully Readability proves useful to you.

eReader Apps are going to be big and they are going to destroy companies that don’t have apps.

Don’t know how eReader companies fail to see the huge benefits apps provide. 

Why eReader Apps will be powerful

Once a company has set context and put in rules you’re left with a blank canvas.

1. Developers and Creators in general can come in and address any problem they see. 
2. They can focus on any use case. 
3. You suddenly have tens of thousands of people working to add value to your device.  
4. You get lots of different perspectives.

Basically, you get tens of thousands of developers who only get paid if they’re successful, you don’t pay them, and you can cut off their work anytime if it’s terrible or dangerous.

An eReader company allowing apps gets to still define vision and boundaries – they just get 100 times the developers and creators and artists to work with.

eReader Apps create killer features

Here are a few examples of Apps that aren’t that hard to create -

1. An app that uses the Nook’s LCD screen to turn the cover flow feature into a folder feature.
2. An app that uses the Kindle DX’s accelerometer to create a Sleep Cycle like app that wakes up you at the best possible time each morning.
3. Using the Entourage Edge’s LCD screen as a game screen and the eInk screen for a level map which updates periodically.
4. An app that measures how much time you spend on various features and recommends tips and shortcuts specific to your usage.
5. A RescueTime like tracker that lets you know what percentage of your reading time goes into what type of book.
6. An app that automatically sorts all your purchases and books into bookshelves that you can edit and share.

With eReaders we are now getting a lot of features – writable screens, touchscreens, dual screens, wireless connectivity, accelerometers, and more.

If you let developers utilize these features to create apps they’ll definitely come up with features that become killer features - it’ll make your eReader irresistable to readers.

eReader Apps can negate Killer Features

Consider a few killer features that are easily implementable as apps -

1. Kindle’s Text to Speech.
2. Alex’s ‘Grab on LCD and Read on eInk’ WebGrabs feature.
3. Nook’s Cover Flow (for eReaders that have LCD screens).
4. AutoScrolling.
5. Speed Reading.
6. Library Finder Feature.
7. Support for a particular format.

You could have developers come in and nullify two of your competitors by coding in those competitors’ main killer features.

Users don’t care who did it or even if they have to pay $5 for it.

What are some potential Killer Apps?

There are infinite Killer Apps.

There might be a feature that is a killer feature for 5,000 people. An eReader company might never be able to prioritize and implement such a feature. 

However, an App Developer definitely can – and will.

Here are some examples -

1. Instapaper – Capture articles to read later on your eReader.
2. Comic Reader – Something that takes a bunch of images, scales them automatically and scrolls through them. 
3. Exercise Journal. 
4. Photo Rotator - When your eReader is plugged in and in sleep mode it circles through your photos.
5. Alarm Clock and Reminder – Everyone can use one.
6. Grocery List App.
7. Create Your Own Newspaper – Readers pay the eReader company and the eReader company pieces out payments to newspapers.
8. Virtual Pets – Please don’t make it recurring payment based.  
9. Aquarium App, Zen Garden, and apps that help people relax.
10. Education Apps.
11. Music Sheets that scroll to the side at an appropriate pace.
12. Dog/Cat Owner App – Keep your photos, a journal, health records, training tips, shopping lists.
13. An app that converts any book into a read-along book i.e. adds photos and images and increases the font and has 1-2 lines per page.
14. Horoscope App.
15. Quotes and Voacbulary Apps – Give you a new quote and a new word either every day or with each book.  
16. Health Apps – Virtually unlimited apps here including apps for remembering to take medicines, apps to track vitamins, apps to keep health records, and more.
17. Music Companion App – Figures out and plays the right music based on words of the book you’re reading, its genre etc. Next level up would to be gauge mood in each section of the book and play appropriate music.
18. Flight Tracker and Flight Booker – App that helps you get travel deals, flight status and more.
19. Password App – Keep all your passwords in one easy to reference app.
20. Language Apps – Dictionaries, Phrase-books, Spoken Word Tutorials, and more.
21. WiFi Finder – Finds the strongest connections, finds open connections, and more.

It’s a never-ending list and it keeps adding to the value of the eReader.

When will we see eReader Apps?

It’s hard to say as eReader companies have either shunned Apps or are ambivalent about them.

Where do eReader companies stand on Apps for eReaders?

Various companies have various stances -

1. Amazon haven’t shown their hand.
2. Txtr have said they’ll add Apps.
3. B&N have stated that they’re open to adding Apps.
4. All the Android based eReaders (Alex, Entourage Edge, Nook) probably will get a shared eReader App store.
5. Sony have been non-committal.

They might all get a big surprise at Apple’s January 27th announcement. At that point they won’t have a choice – they’ll need Apps to compete.

Perhaps their biggest advantage – Only Apps can beat Apps

Take two eReaders.

1. The first one allows Apps. The second doesn’t.
2. In 6 months there are 50 additional features, including 4 that are bona-fide killer features.

At that point the second eReader is in big trouble -

1. To develop that many features they’d need to increase their development team ten-fold.  
2. If they do start on Apps they still have 6 months of catching up to do.
3. More and more developers keep joining the first eReader’s App Store.
4. The second eReader has to compete for developers’ attention. 

Only Apps can beat Apps and the first company to start with Apps usually gets an insurmountable advantage. In both social networks and cellphones we’ve seen this.

eReader Companies need to roll the dice soon

The first big eReader company to open up their eReader to apps (whether it’s Kindle or Nook or Sony Reader) might end up being one of the two big players.

The other will be Apple as it’s already got hundreds of thousands of developers working for it.

1. In the end it comes down to the value proposition an eReader offers.
2. Books are a big part of it – However, lots of stores sell books at reasonable prices.
3. An eReader company that allows Apps will add so much to its value proposition that even if its eBooks are $2 more it’ll still win.
4. Plus it doesn’t have to put its eBooks at $2 more since it’s making money off of Apps too.

Apple and the first of the big three to allow Apps – those are your two likely winners of the eReader wars.

eReader Apps are the new 60 second wireless downloads - Companies won’t realize they’re a big deal until they’ve already lost.

The Kindle Periscope Story

It’s a captivating account with a great back-story -

Eric Fisherman acquired rights in 2006 to sell the Periscope, which his father, Carl Fisherman, invented more than 20 years ago and sold through other companies.

Eric re-worked his father’s design to work for the Kindle.

This holiday season the covers sold out. It’s not a surprise as they address two of the biggest Kindle needs i.e. cover and reading light, in one device.

1. Eric says he tripled his business last year but won’t give out figures. Smart move.
2. He runs it all himself – covers are manufactured in China, sales, marketing, packaging was outsourced to freelancers, and UPS handles shipping.
3. The article says his rivals, M-Edge of Maryland, and Gold Crest of California (Mighty Bright Lights), are much bigger companies.
4. It was interesting to find out the Periscope can hold a notepad and pen on the left side, and that there are twin LED lights that last 40 hours on 3 AA batteries.
5. Based on sales volume Amazon invited Eric to sell in the Kindle Store (though it shows up in Electronics).
6. A Periscope for the Kindle DX is planned. As is one for the Nook.

By the way both M-Edge covers and Mighty Bright Lights are excellent products – there’s a reason they’re the bestselling Kindle accessories. The Periscope’s big advantage is that it combines the two functions into one device – although the price could be $10 less.

As Kindle Sales increase Kindle Accessories become a huge market

The Consumer Electronics Association has these estimates for eReader Sales -

 estimates 2.2 million e-readers were sold last year, nearly four times the 2008 number and up from 20,000 in 2006.

“We are estimating the market will more than double to more than 5 million in 2010, with more than $1 billion in sales.”

Whether you think the Kindle is 40% of that or 80% of that it’s a huge number.

Since the Kindle 2 doesn’t come with a cover or a reading light we’ll literally get millions of people looking for -

1. Kindle Covers. There are 167 different varieties of Cases (including variations in color) for the Kindle 2 in the Kindle Store.
2. Kindle Reading Lights. Just 3 models here and lots of opportunity.

We’ll also get some Kindle owners looking for -

1. Headphones. A few models are in the Top 25 Kindle Accessories.
2. Car Chargers.
3. Kindle Screen Protectors.
4. Kindle Skins. 

There are just a lot of opportunities.

Any accessory company not targeting eReaders, especially the Kindle, is really missing out.

The 2 Big Prizes: Kindle Covers and Kindle Reading Lights

Kindle Covers are booming

There are a huge number of options for Kindle 2 cases in the Kindle Store -

1. A standard leather cover from Amazon.
2. Neoprene cases from Belkin and Built. 
3. Lots of cases from M-Edge – leather, sports, etc.
4. Nylon sleeve from Timbuk2.
5. Cole Haan premium leather cases for $100 each.
6. Kindle sleeves from Octo.  

M-Edge has a ton of product lines (including New Yorker themed covers) and dominates with 18 of the top 24 bestselling Kindle 2 cases.

If we sell 2-5 million Kindles in 2010 (and it’s pretty likely) M-Edge stands to make a ridiculous amount of money.

In addition to these options we also have Kindle cases being sold at Etsy, eBay, and at many stores and sites online (like sfbags.com).

Kindle Reading Lights are the least competitive market

It’s puzzling that there are just 3 featured reading lights in the Kindle Store -

1. Mighty Bright’s XtraFlex 2 which has been #1 forever. 
2. M-Edge’s eLuminator 2. 
3. Great Point Flex Neck Light.

Even if just 25% of Kindle owners buy a reading light that’s a market ig enough to support more than 3 companies.

The Bigger Prize: eReader Accessories in General

The Kindle is booming as part of the boom in eReaders.

We’re going to see the following devices sell well this year -

1. The Kindle. 
2. Apple iSlate. 
3. Sony Reader.
4. The Nook.
5. Kindle DX.
6. Entourage Edge.
7. The Alex.
8. Hearst’s Skiff.
9. Que.
10. Kindle Electronic Pen .

Plus a lot of the other eReaders will sell decently. 

People will be spending -

1. $20 to $100 on a cover.
2. $5 to $20 on a reading light.
3. $5 to $10 on a screen protector.
4. $10 to $20 on an ereader skin.
5. $10 to $25 on car chargers and replacement chargers.
6. $40 to $60 on an eReader warranty.

That’s a ton of money up for grabs.

eReader Accessories are the third most important revenue stream in the eReader ecosystem.

The Biggest Prizes are way too competitive

The biggest prize of the Kindle ecosystem is obviously books. Even more than the eReaders themselves (which are 2nd).

However, there’s way too much competition.

With Books you’d have to take on -

1. Google. Who’d want to take on a company brave/reckless enough to take on China .
2. Amazon.
3. Barnes & Noble.
4. Borders and Kobo Books.
5. Online giants like Scribd and Lulu.

With eReaders you have to take on -

1. Amazon. Who’d want to take on a company brave enough to take on WalMart.
2. Apple – potentially. Not a good idea to take on Apple while Mr. Jobs is around.
3. Sony. Even the runner-up companies are dangerous, dangerous enemies.
4. Barnes & Noble. 

Which leaves us with the third most valuable revenue stream.

eReader Accessories are the market to get into

How much could you make off of eReader Accessories?

1. Assume $25 per year on eReader accessories per eReader owner – a pretty reasonable estimate.
2. Assume 5 million eReaders sold in 2010.
3. That’s an easy $125 million business.
4. Assume 2.5 million eReaders sold so far and you can make $10 per year from them.
5. That’s an extra $25 million.

We get a total potential market of $150 million. That’s off of a very conservative estimate.

Just the Kindle accessories market might be that big. 

eReader accessories as a whole will definitely be. Plus you don’t have to take on Amazon or Apple or even Plastic Logic for this $150 million.

Why aren’t more companies getting into Kindle accessories and eReader accessories?

1. Authors. 
2. Publishers (when Authors choose to engage them). 
3. A Platform that facilitates creation, editing, buying, and distribution of books.
4. Readers.

We would want an equitable distribution of profits -

The Platform gets 10-30%, the Publishers get what Authors deem proper, and authors get the rest.

There’s one huge problem here -

As opposed to most middle-men who are just hoodwinking authors and readers into believing they provide value, we have cellular networks which do provide a lot of value.

The only way to eliminate cellular networks and the share they get is to build out your own network.

How could eReader companies build out their own network?

There are no easy solutions.

You either create your own network –  

1. Consider a WiMax network like the one Sprint and WalMart  are building. It’s potentially workable. 
2. You could attempt to get devices to talk to each other and interconnect to form a mesh network. 
3. You try to buy out a wireless network – not an easy task.
4. You buy up infrastructure from a lot of the fiber optic infrastructure companies that are struggling or bankrupt.
5. You develop or promote new wireless technologies to the point that they can form viable networks.

OR

You carve out a piece of an existing network –  

1. You could use a ‘Net Neutrality’ strategy and claim that wireless networks are supposed to allow some free traffic or some ridiculous argument.
2. You could lobby to carve out a portion of the networks as ‘open’ for the greater good.
3. Strike a deal to get a set amount of bandwidth per year.
4. You tie up with WiFi networks.
5. Strike a deal with the cable networks and mesh that with WiFi.

Platform companies usually go for the former set of options and create their own network. They should – sometimes they don’t.

The constant war between content creators and networks

We have an interesting conflict going on -

Every element of the eco-system is trying to maximize the value it can get.

In terms of the cellular networks and content creators -

1. Cellular networks want to make content cheap or free. They want to get all the money for delivering content while portraying content as not very valuable.
2. Content creators want to turn the cellular networks into dumb pipes. They want the infrastructure to be cheap or very free.

The Platform aims to provide and own most of the pipeline. Thus, the natural evolution of the platform will be to supplant the networks or merge with them.

The most powerful Platform is one that has its own Network

We’re talking -

1. Apple with its own 3G network.
2. Amazon with a WhisperNet built on its own servers and towers.

The opposite direction is possible too i.e. the networks evolving to become the platform -

1. Vodafone opening its own ebook store is a first, big step.
2. AT&T and Sprint will begin to do this too.

At that point there is NO ONE else between authors and readers.

A joint Platform-Network becomes the sole channel between authors and readers and gets the type of power even monopolies marvel at.

Will any company be able to pull it off?

 At the moment it doesn’t seem likely.

There are a few reasons why it’s extremely hard to create a platform-network hybrid -  

1. It’s very expensive to build up the infrastructure.
2. Wireless Networks have a lot of money to fight off challengers.
3. You need some amount of domain expertise in each area. 
4. The Platform companies are very powerful and can fight off encroachments on their domain.
5. The margins aren’t high enough.
6. It’s hard to imagine tech companies getting into running mobile kiosks and repairing wireless towers.

The easy option is to play the openness and net neutrality game and that’s why you have a lot of tech companies doing that.

1. It’s amazing to see some of the most profitable companies in the world plead in favor of turning wireless companies into dumb pipes.
2. Internet users are keen to sympathize as it benefits them.
3. There’s a lot of lobbying going on so there might still be some hope for the Net Neutrality circus.

It’s quite remarkable what you can get people to believe by including an element of self-interest.

Who would have thought the biggest threat to wireless networks would be a completely made-up story.