Kindle & Kindle Paperwhite under pressure from Kobo & Kobo Aura

The hard times B&N is facing with its Nook HD and Nook HD+ tablets seem like they will greatly strengthen Amazon’s position as the #1 eBook, eReader, and Reading Tablet seller. Good times for Kindle Fire HD and Kindle Paperwhite and the Kindle Store.

Well, not so fast.

It seems Kobo is growing rapidly. Additionally, Kobo’s new Kobo Aura HD eReader is doing well. This puts pressure on Amazon to really deliver with Kindle Paperwhite 2.

Kobo morphing into the type of Competitor B&N should have been

Nate at The Digital Reader shares some figures from Kobo’s Strong Growth Press Release

  1. Kobo’s revenue was up 143% in 2012. In Q1, 2013 it’s up 98%.
  2. Kobo now has 14.5 million customers worldwide. That’s pretty impressive. Perhaps even more impressive is that Kobo added 2.5 million customers just in the last 3 months.
  3. Hardware sales increased 145%.
  4. Half of the new Kobo Aura HD sales were to new customers. No details on precise numbers, but Kobo Aura HD accounted for 27% of Kobo devices sold at retail.
  5. Rakuten is Kobo’s Parent Company and it’s very strong. Rakuten’s Internet Services Division generated $3 billion in revenue in 2012. Rakuten’s Internet Finances Division generated $1.5 billion.
  6. Rakuten has very strong international presence and solid partnerships. As opposed to B&N, which is US-centric, Kobo is World-centric.
  7. Indie Author titles now account for 10% of Kobo sales (by unit sales, not revenue).

It’s really interesting to see these figures. Keep in mind that B&N’s Nook division sales were actually down in Q4, 2012. While a lot of that is due to poor device sales, it still makes Kobo’s 143% growth last year, and its 98% growth in Q1, 2013, really, really impressive.

Adding 2.5 million new customers in the last 3 months is very impressive too. Of course, these are registrations, so we don’t know how many are paying customers.

Nevertheless, a 14.5 million customer market makes Kobo an important eReader and eBook seller.

Does this really put pressure on Amazon and Kindle?


Normally, B&N would have been the one to raise the bar by releasing a HD screen eReader. This year, perhaps because of its disastrous holiday season, B&N wasn’t able to.

That would normally have meant big gains for Amazon. It can keep selling Kindle Paperwhite while preparing a solid Kindle Paperwhite 2 for the Holiday Season.

However, Kobo stepped up and shipped the Kobo Aura HD.

This does a few things –

  1. The ‘new shiny thing’ in eReaders is now a HD resolution eInk screen. Kindle Paperwhite is now seen as ‘last year’s model’.
  2. People start assuming a Kindle Paperwhite 2 is around the corner. Lots of them delay their purchases. Regardless of when Amazon planned on releasing Kindle Paperwhite 2, it’ll have to revisit those plans.
  3. New customers to eReaders hear about Kobo Aura HD. If Kindle Paperwhite 2 were available, new customers would just gravitate to it because ‘Kindle = eReader’. But they hear ‘HD’ and want to check out the Kobo Aura HD.
  4. Internationally, it puts a lot of pressure on Amazon because Kobo has strong presence internationally. Amazon is well aware of the HUGE advantage of becoming the ‘default’ eReader and ‘default’ eBook Store in a country.
  5. Amazon now has to anticipate moves by both B&N and Kobo. Amazon’s strategy so far has been to let B&N take a shot, and then counter. That’s what it’s done with the Nook Color, the Nook Simple Touch, and the Nook Glowlight. If it suddenly starts seeing 1 release a year from B&N, and 1 release a year from Kobo, Amazon will have to adjust its strategy. Things become especially difficult if Kobo does spring releases and B&N switches to Summer or Fall releases.
  6. It ensures there is at least one strong contender left standing. If B&N were to quit the eReader market in 2013 or 2014 or 2015, Amazon would be left with no competition if Kobo weren’t around. Amazon might see a strong #2 fall away, and be promptly replaced by a stronger and more dangerous #2.
  7. It helps Kobo capture more market share. This will become very important in the long run. A strong #2 with 20% market share and a strong #3 with 10% market share is much more dangerous than having just a strong #2 with 20% market share. Things like economies of scale and word of mouth and network effects really come into play once you get to tens of millions of customers.
  8. Kobo can push harder worldwide. Outside of the US and UK, people are neither in love with Amazon to an incredible extent, nor are they already invested in the Kindle ecosystem. For those people, it comes down to better device and better ebook store and better service. While Kobo’s service is supposedly atrocious, their device is now shiny and pretty and HD. Kobo also has a good ebook store in most countries.

Kindle Paperwhite is no longer the ‘newest and best and default’ eReader. Well, it might still be best. We don’t know how well Kobo Aura HD works.

However, Kindle Paperwhite definitely isn’t ‘newest’ and it definitely doesn’t have a HD screen which can be used as a marketing differentiator. If enough people start thinking ‘HD’ eInk screens are a big deal, then Kindle begins to slip from its status as ‘the first eReader you think of when someone says eReader’.

What could make Kobo even more dangerous?

Buying Nook Media. That’s what.

If Kobo can get Nook Media for $1 billion or so, it would instantly go from approximately 10% market share to 25% to 30% market share. It would also give it a brand that’s strong in the US.

Worldwide, Kobo could leverage the larger economies of scale to really push for market share.

Finally, you can be pretty sure that a LOT of Nook owners would choose Kobo over Kindle. Kobo can read their existing Nook Books. Kobo supports ePub. Kobo isn’t Amazon.

Could B&N remain a strong #2 based on just Reading Apps?

It’s very unlikely.

B&N might exit Reading Tablets and eReaders. The former seems likely, and the latter seems a possibility.

It’s quite conceivable that B&N stops making devices altogether. That it tries to fight the Book Wars using Reading Apps. There are a few problems with this approach –

  1. Users of a device tend to go with the ‘default’ Reading App. Kindle Fire owners use the in-built reading app. Apple users tend to use the iBooks App. And so forth.
  2. When users don’t go with the ‘default’ reading app, they go with the ‘Best’ or the ‘Most Well-Known’ Reading App. Best Reading App varies wildly by platform. B&N isn’t ‘best’ on any platform except Nook devices. ‘Most Well-Known’ tends to be Kindle.
  3. Outside the US, B&N has no mind share. Most people won’t even know B&N’s Nook Reading Apps exist, or for that matter B&N. On the other hand, if B&N were able to sell devices internationally, users would gravitate to the in-built default reading app (which would be B&N’s own).
  4. Serious Readers want a device focused on reading. The more focused a device is on reading, the less likely it is to have ‘lots of Reading Apps’ and/or the option to ‘choose a Reading App from another ebook seller’. Kindles don’t have reading apps from other stores. Kindle Fire allows sideloading, but Kindle doesn’t allow anything.
  5. On another company’s device, you get taxed and/or get treated like a third class citizen. Apple forced Reading Apps to remove their ebook stores from the app, and also to remove their ‘buy’ buttons. It wanted a 30% cut. Amazon would simply never allow B&N’s Reading App in its Kindle Fire Store. Google could simply hide the B&N Reading App by making it hard to find.

Unfortunately for B&N, there’s only one way to keep fighting the Book Wars – to have both reading apps for other devices and your own devices (both Reading Tablets and eReaders).

It seems inevitable that Kobo will become the Pepsi to Kindle’s Coca Cola

Kobo is making a lot of good aggressive moves. It is fighting in Reading Tablets and eReaders. Its first few efforts have been terrible – However, it has been improving gradually, and at some point of time it’ll catch up. With the Kobo Aura HD it has really put the pressure on Kindle and Nook. Now Kindle Paperwhite 2 and Nook Glowlight 2 have to deliver.

As it grows likelier and likelier that B&N is going to leave Reading Tablets and eReaders. As Kobo keeps improving and pushing and expanding worldwide aggressively. It becomes more and more likely that Kobo will become the #2 eBook seller and the #2 eReader seller worldwide.

Once that happens, Amazon will find that Kindle vs Kobo is a much more dangerous fight for it than Kindle vs Nook. Rakuten is an Internet giant conglomerate (much like Amazon), and knows how to fight the Digital Book Wars much better than B&N.

By 2015 we might have Amazon wishing B&N had done better with Nook, and stayed around as an annoying but contained #2. Kindle vs Kobo is going to make Kindle vs Nook seem like a walk in the park.

Lighted Nook leaving Kindle in the dark?

In a nutshell: Yes and No.

Yes, we know that doesn’t help. Let us explain.

Please Note: This post is a collaboration between Rajesh and Switch. Rajesh is one of 4 (yes, 4) new bloggers who’ll be joining Meaghan and Switch in writing for the blog.

Yes, Lighted Nook is leaving Kindle in the Dark

People who clamored about how you can’t read on a Kindle in the dark (while waxing poetic about how paper books are so perfect for reading) fell into three camps –

  1. Those who really did need an eReader with a light.
  2. Those who would never ever buy an eReader (because People magazine is so much better in Color LCD with EyeDeath technology).
  3. Those who had no idea what an eReader was but were inordinately afraid of the dark.

Nook with GlowLight AKA Lighted Nook suits the first group perfectly. The second group will now find something else to complain about (the textured back is not made of crocodile skin and the wireless ebook transfer process isn’t carbon neutral). The third group is trying to decide between a flashlight, a box of matches, a potassium crucifix dipped in garlic oil, and a lighted eReader (Please, go with the crucifix – it can double as a bookmark).

Lighted Nook has a Real, Tangible Benefit

Dark Double Retina Display Technology (Trademarked) lets you see in the Dark. It’s amazing. It’s as if someone went back in the past and invented the lightbulb – except it’s fit into an eReader screen. The technology is so forward-thinking it’s not a backlight. No Sir. It’s a front-light.

You can’t really argue that this isn’t an advantage. Dark Double Retina Display is the best thing since sliced bread and the wheel (except perhaps for fried ice cream).

On a more serious note, we are talking about a very illuminating and clearly thought out feature. Advantages of the GlowLight technology (for the Nook Simple Touch) include:

  1. Soft glow on the screen. Optimized for low-light/no-light reading.
  2. Can be switched on to read e-books during the night and switched off during the day.
  3. Brightness adjustment options.
  4. Even illumination of the screen.
  5. Warm feel to the eyes – Less tiring for the eyes.
  6. Even with GlowLight turned on, the battery is supposed to last for one month (when the Nook is used for half an hour everyday).
  7. Can also be used when there is insufficient light during the day, to improve the reading experience. Note: This is an underrated feature.
  8. The glow is created by using a front light, instead of the back-lit screens used in tablets/LCD monitors. This is better for extended reading sessions.

Of course, true hipsters will frown that there isn’t an actual 1918 light switch fixture on the side of the device and there is no animated lamp shade that flutters up the length of the screen when you turn the front light on. However, we’re sure our friends in Hipster Land are working hard and trying to start a Kickstarter Project for ‘Completely Useless, Perfectly Wonderlicious, Genuinely Vintage Light Switch Fixture for Things You can Pretend to Read Proust On’.

Too much meandering. The crux is that –

  1. Lighted Nook has a good, solid feature.
  2. Kindle does not have the aforementioned good, solid feature.

Amazon Damage Control

Taking a leaf from its last year’s ‘Library Book Support’ announcement i.e. the ‘Announce it Before You Have It’ strategy, Amazon has already announced (via its PR Department at Reuters) –

  1. Lighted Kindle will be arriving.
  2. It will be arriving in July.
  3. A New Kindle Fire Tablet will be arriving.

We’ll see why this is important later.

So, Amazon obviously recognizes this is an important feature. It actually had its extended PR department release a controlled leak to fight off the lighted Nook.

Coming Back to Tangible Benefits

Just think of the possible applications of this technology. You can not only use the Nook during bedtime (without disturbing your family members by switching on the lights), but you can also read your favorite books during power cuts. You can keep reading your books while sitting on the back seat of a car or taxi, even when there is no illumination. You can sit down in your balcony, terrace or garden and read your books while occasionally gazing at the moon. All paranormal romance fans – this is NOT going to turn you into an empath werewolf being courted by Alien Princes and Bodybuilding Shapeshifters who moonlight on General Hospital. Just an FYI.

Amazon’s equivalent is the lighted Kindle Cover. It’s a rather inelegant solution though it works very well if you aren’t fussy.

  1. You have to carry the case around.
  2. The Case costs a bit. $59 or so.
  3. The lighting isn’t even.
  4. There are no animated lamp shades (and no skeuomorphism either).
  5. Kindle+Cover doesn’t sound as cool as – My eReader glows in the dark, like the trees in Prypiat.

Crux: The in-built light is a very cool feature.

It’s a tangible benefit and it gives the Nook an edge over the Kindle.

Please Note: Clip-on lights are just a terrible solution.

Manufactures provide clip on lights for Kindle but there are certain limitations. The clip on lights need to be attached and detached frequently. They add additional weight and cost to the e-reader. They have their own batteries that need to be recharged/replaced and there may be some reflection on the screen and glare on the eyes. Given a choice, people will probably prefer to go with a reader that is optimized to be used during the dark.

No, Lighted Nook is not going to affect Kindle sales very much at all

If the lighted Nook has a clear, tangible advantage, then why will it not affect Kindle sales much?

Quite a few reasons:

  1. Amazon has already leaked news of a lighted Kindle arriving in July.
  2. Amazon has got its customers locked into its ecosystem. Who’s going to leave all those paid and free books behind?
  3. Kindle Lighted Covers and Clip-on lights are a decent workaround until the Glow in the Dark Kindle arrives.
  4. Lack of Awareness – Not very many people know about the lighted Nook. They should have named it Dark Double Retina Technology or something catchy and outrageous. GlowLight? That sounds like something the Care Bears use alongside scented Tibetan candles.
  5. Lack of Awareness of the Benefits – It’s very easy for users to misunderstand the benefits and convenience. Things like ‘even lighting’ and ‘built into the ereader’ are not very easy to explain.
  6. Higher Price. At $139, Nook with GlowLight is quite a bit more expensive than the $79 and $99 Kindles.

The Nook’s GlowLight technology has a few limitations as well. The battery life will be less. Reading in the dark will cause some eye strain (only way to avoid that is to read during the day). Small imperfections on the screen (like fingerprints, dust) will seem like ants and spiders crawling across your screen.

The advantages provided by the lighted Nook easily outweigh the disadvantages. With GlowLight, people can read on their eReaders any time. However, the fact that users know a lighted Kindle is around the corner and the fact that they are locked into the Kindle and/or the Amazon ecosystem means that the impact will not be as strong as it would otherwise have been.

Barnes & Noble has made a good, positive move and yet again Amazon has to counter. My prediction is that Amazon has quite a few tricks up its sleeve with the Kindle Lighted Touch – one of which will be bringing it in at a price much lower than $139.

Why Kindle 3 is the best eReader

The Kindle 3 is, for all intents and purposes, the best eReader available.

Let’s ponder why this is – why Kindle 4 and Kindle Touch were unable to wrest the crown from Kindle 3.

Please Note: If you haven’t used a Kindle 3, or have already bought a Kindle Touch, then feel free to consider the Kindle Touch the best thing since sliced bread. This post is mostly for Kindle 3 owners and for people who are deciding between Kindle 3, Kindle 4, and Kindle Touch.

Why Kindle 3 is the best eReader

1) Kindle 3 is dependable. It’s the polished version of a familiar device. The magical third generation that sorts out 90% of the issues.

With Kindle 3, Amazon refined what it started with the original Kindle. It didn’t try any big design changes because none were needed. It improved lots of aspects and messed up only a few (keyboard being too tiny, number keys missing, etc.).

Kindle Touch and Kindle 4, on the other hand, aren’t familiar or dependable. They aren’t exactly 4th Generation Kindles – they are more like a branching out from the main Kindle family into some strange branch where being able to touch the screen becomes as important as reading from it.

They throw away the entire user interaction model. Kindle 4 does this in spectacular fashion by having neither a keyboard nor a touchscreen. Kindle Touch also involves quite a shift – using a touchscreen makes for an entirely different user experience. Amazon makes the change even more drastic by removing the 5-way and the page turn buttons.

For all intents and purposes, Kindle 4 and Kindle Touch are the first generation devices for their respective user interfaces. That means – they will not have the sort of polish Kindle 3 has. This is why lots of people are running into problems with screen responsiveness and are struggling with things like one-handed reading and page turns.

2) The Kindle 3’s keyboard and 5-way and page turn buttons add something of significant value.

Physical Keyboard = Faster typing of Notes. In things like crossword apps and games you can use the keyboard. Keyboard can be used for shortcuts (Alt+G for screen refresh to remove ghosting – Is that even possible on Kindle Touch?).

Physical Page Turn Buttons = Keep your finger on the button and press down (minimal effort). Also, makes one-handed reading easier.

5-Way = Faster moving around and more precise moving around. The touch screen of the Kindle Touch is a bit hit and miss with Menus and also is awkward in some places.

There is also familiarity and being comfortable. If you’ve owned Kindle 1 or 2, then Kindle 3 is comfortable. If you’re used to a physical keyboard then, again, Kindle 3 is familiar. The opposite applies too – If you’re in love with touch screens, then you’ll prefer Kindle Touch (just don’t expect LCD smoothness).

Here’s what you get by removing the keyboard and 5-way and page turn buttons: smaller size, lighter weight. These aren’t very important because Kindle 3 was already compact and light. It’s 7.5 ounces vs 8.5 ounces.

3) Amazon cuts a LOT of corners with Kindle Touch.

This is something that doesn’t become apparent until you actually start using the Kindle Touch.

All the cut corners add up – the interface being awkward in places, no charger included, no free 3G browsing. To get the price down, Amazon cut a lot of corners. You get the distinct feeling that you are using the ‘value’ version of the Kindle.

Think about it – there isn’t even a wall charger included.

Kindle 3 didn’t have any of this nonsense.

Kindle 3 is $99 with ads for a device that used to sell for $139 and had to be priced lower to compete with Nook Touch. Kindle Touch is $99 with ads for a device that often reminds you it’s a $99 device.

Interestingly, all the Kindle Touch’s drawbacks (and the Kindle 4’s drawbacks) stem from two very interesting sources.

The Fundamental Flaws – Amazon reacted to Nook Touch instead of improving Kindle 3, Amazon went for value over quality

It’s finally struck me.

Kindle 3 was really great. Kindle 4 should have been a higher quality device built on Kindle 3 as the foundation.

Instead, Amazon prioritized –

  1. Lowering the price to reach more users.
  2. Reacting to what it thought was the threat of Nook Touch and the new Sony Readers.

Neither of these have much to do with reading or quality of reading experience.

Why prioritize lower price over quality? Because every Kindle sold is a channel to Amazon. Amazon wants to reach as many users as possible.

Why no keyboard? Amazon doesn’t want a keyboard because it wants the Kindle to be used for buying and consuming – Not for taking notes. Time spent on taking notes is time that could be spent buying and reading. Amazon has progressively made the keyboard smaller and more stunted and in the newest Kindles it has gone into full consumption device mode – forget typing, focus on buying and consuming.

Why react to Nook Touch? Because color eInk is too far away. Amazon was worried about a feature that is more of a marketing/selling feature than an actual benefit. And it almost certainly made the wrong choice.

Nook Touch used touch as a differentiator even though touch has nothing to do with reading (unless you’re reading braille). Touch is great for marketing and so B&N had to include it – because Kindle 3 was far ahead of Nook 1.

Amazon, however, had no rational reason to react to Nook Touch as if it were a big threat.

Why on Earth would Amazon react to the #2 and #3 eReaders?

Kindle 3 was doing great. It was the #1 eReader. (In the opinion of lots of Kindle owners, including me, it still is).

Amazon had two options –

  1. Wait until Mirasol was ready and release a color eInk Kindle. An actual big breakthrough. A Kindle 4 worthy of having that ‘4’ in the name. A worthy successor to Kindle 3.
  2. React to what B&N and Sony were doing. Release a stop-gap Kindle. Create a me-too device that panders to the weird belief that a touchscreen is essential to reading.

For some strange reason Amazon chose the second option. It decided that it needed to copy the moves and designs of Nook Touch and Sony Pocket Reader. So it got rid of the keyboard and slapped on a touchscreen. To show just how avante-garde and zen minimalist it is, it even got rid of the 5-way and the page turn buttons.

It’s a puzzling decision. Every single book involves hundreds of page turns. The physical page turn buttons are super important. Why get rid of them?

With the new Kindles, Amazon has strayed from ‘a device that makes no compromises when it comes to reading’

Let’s consider –

  1. No charger. That’s a compromise. No computer needed … unless you want to charge it.
  2. No keyboard. You could push it and say it’s a trade-off. No keyboard does make taking notes tougher.
  3. No free 3G Internet. Note: This is for the more expensive 3G models.
  4. No physical page turn buttons. Again, you can argue semantics but seems like a downgrade to me. If Nook Touch can keep physical page turn buttons, why can’t Kindle Touch?
  5. Poorly thought out Touch interface (in places). This sometimes gets in the way of doing things. Touch should make things smoother, not rougher.

When we went from Kindle 2 to Kindle 3 there were 15 to 20 additions and 3 to 4 negatives. This time it seems like there are 5-8 improvements and 3-5 negatives. It almost seems to be a lateral move.

Amazon wasn’t really trying to make the best eReader

The most logical conclusion we can arrive at is that Amazon wasn’t really trying to make a better eReader than Kindle 3. Kindle Touch seems like something that is meant to prevent Nook Touch from getting too much of the market.

If we see a Mirasol powered Kindle in the first half of 2012, then it’ll prove this theory. That Kindle Touch and new Kindle are just stop-gap measures.

There are other possibilities –

  1. Amazon wants to focus on a ‘good enough for reading’ Kindle that is low-priced and which lots of casual readers can embrace. Obviously, for these ‘hard-core’ book readers, the ability to use a touchscreen is the most valuable feature an ebook reader could have. Kindle 5 will arrive with animated page turns and wooden bookshelves. By Kindle 6 we will have the option to buy bookcovers instead of books.
  2. Amazon really does think Kindle 4 and Kindle Touch are better than Kindle 3. Perhaps the Committee for the Death of Keyboards inside Amazon is celebrating the liberation of users from the tyranny of physical keyboards.
  3. Kindle 4 and Kindle Touch got a bit lost in all the focus on Kindle Fire. It’s possible.

Whatever the reason(s) for the cutting corners and lack of tangible progress – it’s disappointing that we haven’t progressed. Kindle 3 came out 1.5 years ago. Since then we’ve only had Nook Touch, which is not as good (but is close), and these two new Kindles that are clearly not as good (probably because they prioritize things other than reading and quality).