Amazon expanding to 170 countries is very impressive. Kindle Fire HD was only available in US, UK, Germany, France, Japan, Spain, and Italy. Going international to 170 countries should do a lot for Kindle Fire HD sales and should increase the chance Amazon can keep competing with iPad and with Android Tablets.

TechCrunch had the news on Kindle Fire HD International. The key details are -

1. Kindle Fire HD and Kindle Fire HD 8.9″ will be available in 170 countries on June 13th.
2. Preorders for Kindle Fire HD and Kindle Fire HD 8.9″ are open today.
3. Kindle Fire HD International will be $214 – converted to local currency.
4. Kindle Fire HD 8.9″ International will be $284 – again, converted to local currency.
5. Kindle Fire App Store (Amazon App Store) will be available in 200 countries.
6. Kindle Fire App Store will have following two games free today and tomorrow – Fruit Ninja and Cut the Rope: Experiments. Update: It seems these are free only in countries the App Store is expanding to.

You can buy Kindle Fire HD at Amazon.

You can see all the details in the Kindle Fire HD International Press Release.

Why Kindle Fire HD International Expansion is critical to Amazon’s Hopes

Amazon is in a tough spot.

1. Kindle Fire HD did well last Holiday season and is showing life. However, it still trails iPad and iPad Mini sales by a lot.
2. iPad Mini is eating into the 7″ Tablet Market. A new iPad Mini, perhaps with Retina Display, might arrive this year.
3. iPad Mini and iPad have much better economies of scale.
4. Android Tablets keep improving. There are rumors of a new Google Nexus 7 2 with Retina level display.
5. If Amazon doesn’t expand fast, and increase sales fast, then the conversation will become iPad vs Android (perhaps even iPad vs Samsung Tablets).
6. If Amazon doesn’t sell more, and get economies of scale going, then iPad and Nexus 7 will be able to destroy it on Value for Money. They already have massive App Stores and Amazon is playing catch-up there. If Amazon can’t keep prices competitive (i.e. lower) then it’ll lose the Tablet Wars.
7. A lot of Amazon’s plans of transitioning from selling CDs, DVDs, paper books to selling Digital Content depend on it controlling the channel to customers. If it doesn’t, then it’ll exist at the mercy of other Ecosystems.

Kindle Fire HD isn’t just a Tablet, and winning the Tablet Wars for Amazon isn’t just about being the best-selling Tablet. Kindle Fire HD is Amazon’s storefront of the future. If Amazon loses the Tablet Wars, it’ll eventually lose the ‘selling digital content’ wars.

How will Kindle Fire HD International do?

Amazon’s move is interesting and the pricing is even more interesting.

1. iPad Mini and Nexus 7 and Galaxy Tab have much larger App Stores. Amazon is carefully building up its App Store, but it’s still far behind. This move will help develop the App Store in the long run. Why? It’ll add more Kindle Fire HD owners. That will give developers more incentive to make apps for Kindle Fire HD. However, as of today, Amazon is at a disadvantage when it comes to App Store range and choice and size.
2. Apple and Google have much stronger brands worldwide. Amazon is strong in some countries like US, UK, Canada, and perhaps 5-6 more. However, it has very little presence beyond the 8-10 countries where it has subsidiaries.
3. The price of $214 for the Kindle Fire HD is not compelling. It was different with the eInk Kindle as there were very few other established eReader companies. There are lots of Tablet giants like Apple, Samsung, and Google. They can easily compete with a $214 Kindle Fire HD International.
4. It’s interesting that Amazon is pushing the ‘Kindle Fire is a Service’ concept. Amazon mentions in the Kindle Fire HD International Press Release that ‘Kindle is a service, and not just a device’. How strong is the service outside the US and UK? Do these new countries have things like Amazon Prime and Amazon Instant Video?
5. The HD Display and the Speakers are two big strengths. However, Samsung keeps churning out Tablets, a new iPad Mini might arrive this year, and Google’s Nexus 7 2 is rumored to have a much better display. What happens then? Will Kindle Fire HD be attractive? Is it attractive now? What reason would a user in Swaziland have for choosing a $214 Kindle Fire HD over a $329 iPad Mini or a $229 Nexus 7?
6. Perhaps Amazon has a lot of stock and wants to expand sales worldwide to sell stock? Perhaps Amazon feels expanding worldwide is necessary for hitting economies of scale? Perhaps Amazon was forced into Kindle Fire HD international expansion sooner than it would like. The way all of this is set up is very strange – a sudden announcement, a price of $214, no grand strategy, using a Kindle Fire HD from 6-7 months ago.
7. Amazon seems to be using its standard ‘Preorders in advance’ trick. It likes to announce a product a month or so in advance. This allows it to gauge demand and adjust production accordingly.

I honestly don’t know how Kindle Fire HD will do. I wasn’t expecting it to be the #2 Tablet in Holiday Season 2012. It might very well end up being the #2 Tablet after iPad Mini worldwide. The only thing is, worldwide is a different kettle of fish. In the US, Amazon has a huge share of online retail sales. During Holiday Season it can really leverage its traffic and push Kindle Fire sales. It also has so many customers in the US – customers that trust it. Worldwide, Amazon doesn’t have the same advantages.

It’ll be really good if Kindle Fire HD International takes off. It’s the scrappy little fighters like Nook Color that start off trends. If Kindle Fire HD International takes off, then it pushes Apple and Google and Samsung to improve their Tablets. Additionally, Amazon’s policy of ‘price low, make money from services’ forces other Tablet makers to price their own tablets lower. Let’s hope Kindle Fire HD International is a hit, and it allows Amazon to scale up and continue to chase iPad Mini and Samsung Tab and Google Nexus 7. That’ll force the entire Tablet Market to improve and innovate. Better for all of us.

What’s interesting to me is the sheer number of people who want cheap kindle books and free kindle books. Strangely, there doesn’t seem to be any way of finding the opposite type of customers – those who don’t care about price and/or are willing to pay for a good book.

If we assume there are 5 major groups of readers -

1. Readers who don’t care about book price.
2. Readers who are OK with prices above $9.99.
3. Readers who want book prices below $9.99 for newer titles, and below $7 for older titles.
4. Readers who want books below $5.
5. Readers who want free kindle books and all books below $3.

Well, there is ample evidence of the existence of the latter two groups. Go to any website or forum and you’ll find people looking for free kindle books, looking for and sharing deals, and generally focusing on finding the lowest book prices.

There is also a large group of readers who are OK with what they would consider ‘reasonably priced books’. $9.99 or less for new titles, and prices lower than $7 for older titles. They’d like ebooks to always be the same price or cheaper than the corresponding paperbacks.

The first two groups aren’t easy to locate. In fact, it’s downright hard to find more than a scattering of readers belonging to the first two groups.

The natural question that arises is - Do these two groups actually exist?

Is there a price-insensitive market in Books?

Yes, there obviously is. We wouldn’t have hardcovers if there weren’t. People were paying $15 to $25 for hardcovers, and still are. The market obviously exists.

It’s a fair assumption that there are a non-trivial number of readers who are well-off. It’s also safe to assume that there are lots of readers for whom reading isn’t measured in terms of money. Another reasonable assumption is that there is a group of readers who simply can’t wait and must get a book instantly. Yet another safe assumption is that there is a group of readers who value their time a lot more than money and don’t mind paying a high price for a very good book that’s worth their time.

If we consider these readers and other ‘not sensitive to the price of the book’ readers, there should, in theory, be a large group of readers that are price-insensitive. Perhaps even 5 to 10 million such readers in America.

Well, these price-insensitive readers exist with physical books. Where are all these readers when it comes to eBooks?

What happened to the price-insensitive readers when we shifted from Books to eBooks?

We have two groups of readers that comprise the ’Price Insensitive’ Readers.

1. Those who simply don’t care about price.
2. Those who don’t mind paying higher prices (prices above $9.99, prices higher than paperback prices, $9.99 for older titles).

With physical books they were snapping up Hardcovers and spending freely.

What happened with eBooks? Where are the high-end customers?

Well, there are a few possibilities -

1. They still exist. We just never hear from them. The latter seems incredible – that a large contingent of $13.99 ebook buying users exist but never participate on the Internet. However, if we look at the Bestsellers lists, there are enough $13.99 books in the Top 100 to suggest that price-insensitive readers exist and they are buying books.
2. They shifted their attitudes as Books shifted to ebooks. A hardcover is a very physical thing – you hold it, you treasure it, you put it up on your shelf. An ebook is in the ether. It’s hard to spend $13.99 on something that doesn’t even really exist. Perhaps the price-insensitive customers in books are the ones that now want $9.99 ebooks.
3. Most of them didn’t shift from Paper Books. Keep in mind that eBooks still have just 25% of revenues and perhaps 30% of book sales. Which means 70% of book sales are hardcovers and paperbacks. Perhaps most of the price-insensitive customers are buying physical books.
4. Amazon and B&N are gathering them up and keeping them safe from the price-sensitive parts of the reading market. This also seems incredible. However, it might be the case that Amazon and B&N have simply gathered up most of the price-insensitive readers who’ve shifted to ebooks. They are showing these readers a completely different world. A world where lower priced books don’t play much of a role.
5. They have started buying Hardcovers as their ‘don’t care about price’ books, and are supplementing them with very cheap ebooks as ‘binge buys’. This is a stretch – to assume that price-insensitive customers are turning into ‘Price-Insensitive with Physical Books, Price-Sensitive with eBooks’. However, it isn’t impossible.
6. They are waiting to see what happens. Perhaps price-insensitive customers are waiting to see if an Easy Solution for price-insensitive readers materializes. One that makes it easy to find high-quality, well-formatted ebooks that will be worth their time. Think of it from their perspective – they might not want to wade through a sea of cheap and free to find quality and worth-your-time.

At this point, it’s worth looking at why certain readers don’t mind spending money on a high quality book.

Time vs Money

We’re swamped by authors offering free books as marketing. We are swamped by bargain hunters who want free kindle books and cheap kindle books.

This creates an environment where it’s easy to forget what a book means to people, and what the book reading experience is for people.

1. A book can be a source of pleasure, entertainment, knowledge, learning, advancement, fun, sharing or something else entirely.
2. Different readers have different amounts of time available for reading.
3. Different readers have different reading budgets.
4. Different readers have different thresholds for what will impact the enjoyment of their reading experience.
5. Time can’t be bought.

Different people value Money and Time differently. Mostly because they have different amounts of them and different ways of viewing them and spending them.

Let’s consider some example readers with different personal circumstances -

1. Alex has no money because she spends her pocket-money on movie tickets. She likes YA novels and wants to find good ones for free or for a few dollars. She reads every day and thus needs 3-4 books a week.
2. Jonathan is a busy doctor. He gets to read just 1 or 2 books a week. Money is no object. However, since the reading is one of his few entertainment/mind-refreshing activities, the book absolutely has to be a very good book.
3. Tina is studying to be a nurse. She’s looking for books that will supplement her school studies. For her, the most important criteria is acquiring knowledge that’ll help her become a better nurse. She doesn’t have much money – But for nursing-related books she’s willing to pay anything provided the book helps her.
4. Trevor loves to read but having two young kids means he only gets to read a book a month. For him, it’s absolutely imperative that the book is really good. Trevor also has zero patience for grammatical and spelling errors.
5. Nancy loves romance novels. She has a few favorite authors and she buys all their books. She’s also on the lookout for new authors. Since she already has a good set of authors she reads, she only has time to try out one or two new authors a month. Also, since she already spends most of her reading budget on her favorite authors, she’s looking for free and cheap books from new authors to try out. If they make the cut, then she doesn’t mind paying full price for other novels from the same author.

If you consider these readers, we can easily see why some of them would gravitate towards free and cheap kindle books, while others would focus on the ‘safest’ and ‘best reviewed’ books.

We can also see the price factor. Some readers simply don’t have much money for books. Some readers won’t spend money on untested authors. On the other hand, there are readers for whom either money isn’t a concern, or the time spent is far more important.

Jonathan might feel that $13.99 spent on a book he enjoys is worth 100 times more than getting a cheap $1 book that is a waste of his time. Worse, now he has to wait until next week to get his reading high.

Nancy, on the other hand, might think of her 1 new author a month as ‘experiment time’. Since she is already getting guaranteed good reading from her regular authors, and since she’s spending most of her reading budget on them, she doesn’t mind taking a gamble on a cheap or free book occasionally.

Jonathan and Nancy, when searching for a new book to read, will go in diagrammatically opposite directions. That’s OK. That’s the whole point of having books and ebooks and Publishers and Indie Authors. To provide readers whatever they want.

The Question becomes – Where do we find the Jonathans and Trevors and Tinas of the Reading World?

Where can we find the ‘Time is worth more than Money’ Price-Insensitive Readers?

This is the $25 billion a year Question.

The Books Industry in the US is approximately $25 billion a year in revenues. Replace it with whatever figure you prefer – it’s just meant to illustrate the point.

If the shift from Books to Books+EBooks leads to a mostly price-sensitive market, then we’ll fall to $10 billion to $15 billion a year in revenues. This will have repercussions and might lead to a decline in quality of ebooks (MIGHT).

If, however, we can find and retain the price-insensitive customers. Retain = Keep them as price-insensitive customers. Then we can ensure the market stays at or above $20 billion a year.

Finding these price-insensitive customers, and giving them a path to being price-insensitive ebook customers, is absolutely critical.

Why?

Because all the price-sensitive customers are getting addicted to free and cheap. They are going from bargain hunters to extreme bargain hunters.

Regardless of what your personal preference for book prices might be, it’s safe to say that -

1. Free Books becoming the norm has a very high chance of hurting authors and therefore the quality of books authors produce and the number of high quality books they write each year.
2. Very Cheap and Free Books becoming the norm has a good chance of hurting the entire infrastructure. The Publishers and Platforms would gradually die out, bookstores would die out, and we’d be left in a world where no one is providing all the ingredients for a thriving books market.

If Authors can’t make a decent living from books, and chances are they won’t be able to if we end up in a world of $0 and $1 books, then the amount of time they can devote to writing books, perfecting their craft, and polishing their books decreases. As a result both the number of great books they produce and the quality of such books diminishes.

This is an Assumption. It might happen that hunger drives authors to more beautiful work.

For now, let’s assume that we need some basic reasonable book prices (perhaps $3 to $7) to keep authors going strong - writing great books and writing lots of them.

Price-Insensitive Customers drive the behavior of Price-Sensitive Customers (and vice versa)

Imagine you’re a price-sensitive customer. That book you really want is for $13.99. Yet, thanks to price-insensitive customers, it’s at #2 in the Charts. You give in and buy it for $13.99 – because you can’t wait another 7 months.

That leads to a sale from a price-sensitive customer at a very high price.

Now imagine you’re a price-insensitive customer. You notice that price-sensitive customers have driven a $1 book all the way to #5. The reviews seem good. You take a gamble and are rewarded. That author has 7 more titles. You read them one by one. You decide to take a few more gambles on new indie authors.

Now the price-sensitive customers have turned you from spending $13.99 per book to $1 per book.

Please Note: This trend of price-sensitive customers influencing price-sensitive customers – This is perhaps the reason Amazon tries so hard to keep $1 Indie Authors out of the charts.

Finding Price-Insensitive Customers and catering to them might determine the long-term viability of the Publishing Industry and Platforms

At one end of the spectrum is a world where there’s no money left in books in 20 years. At the other end of the spectrum is a world where Publishing and Books are generating a lot of money in 20 years – even more than they generate now.

For the latter to happen, three key things need to happen -

1. Platforms and Publishers need to find Price-Insensitive customers and create a great situation for them. So they feel their time and money is well-spent, and keep spending.
2. Platforms and Publishers need to use Price-Insensitive customers to influence Price-Sensitive ones. They need to do this while avoiding the reverse as much as possible.
3. Platforms and Publishers need to find a way to ensure books are worth paying for. They do this by using various levers – Convenience, Curation, Quality, Time Efficiency, Author Scarcity.

Currently, Platforms and Publishers are messing up the first, they are doing decently on the second, and they are messing up the third.

It’s simple. If Price-Insensitive customers get really high quality ebooks, get them conveniently, and get them perfectly tailored to their tastes, then they will spend their money freely. They will feel it’s worth their money and time to spend on ebooks and they will remain price-insensitive readers.

If not, then Price-Insensitive customers will either cut down on their reading or they will turn into price-sensitive readers looking for $3 and $1 books.

Qualcomm showing off 2560 by 1440 Mirasol Display (reflects ambient light)

Qualcomm’s Mirasol Display was supposed to be used in a Color Kindle way back in 2011. Well, there was no Color Kindle so there was no Mirasol color eReader eInk. The last we heard was that Mirasol had gotten a $2 billion investment to set up a manufacturing facility. No news after that.

Now, it seems Qualcomm is trying other things. Engadget covers Qualcomm Mirasol 2,560 by 1,440 displays demoed at SID Display Week (They have a video).

1. It’s a 5.1″ smartphone display.
2. The resolution is 2560 by 1440. That gives an effective pixel density of 577 pixels per inch. For reference, 27″ displays with 2560 by 1440 resolution are considered QuadHD. I’m not sure what to think about a 5.1″ display that has 2560 by 1440 screen resolution.
3. This is the same magical Mirasol Display which reflects nearby ambient light. It’s great for devices that want to use less power and/or for eReaders.
4. The actual technology is still a few years away from being ready for market. Qualcomm, that does not surprise anyone. You seem masters of demoing technology that is ‘still a few years away from being ready for market’.
5. Qualcomm also demo’ed a 1.5″ screen used in an always-on smartwatch. That actually sounds more interesting.

Eletronista also has some coverage and Qualcomm Mirasol photos.

Kindle Worlds – Amazon starts a Fan Fiction initiative

Amazon has stumbled upon what is either a brilliant idea or a disastrous one – let people make money from fan fiction, officially.

Geekwire has some details on Amazon’s Kindle Worlds initiative. You can write fan fiction about established books and series. You get a cut. The royalty owner gets a cut. Amazon gets a cut.

Some Warner Brothers properties like Pretty Little Liars are already available to fan fictionize.

Here’s what Amazon says -

You will own the copyright to the original, copyrightable elements (such as characters, scenes, and events) that you create and include in your work, and the World Licensor will retain the copyright to all the original elements of the World. When you submit your story in a World, you are granting Amazon Publishing an exclusive license to the story and all the original elements you include in that story. This means that your story and all the new elements must stay within the applicable World. We will allow Kindle Worlds authors to build on each other’s ideas and elements. We will also give the World Licensor a license to use your new elements and incorporate them into other works without further compensation to you.

If I’m reading this correctly, it would have meant that Stepahnie Meyer could start writing 50 Shades of Grey titles without having to pay the 50 Shades of Grey author anything.

Amazon says it will pay a royalty of 35 percent of revenue for accepted fan fiction of at least 10,000 words. Shorter pieces (5,000 to 10,000 words) will receive a 20 percent royalty. The company says it expects most of the “Kindle Worlds” fan fiction titles to sell for 99 cents to $3.99.

As it’s Amazon, an ‘exclusivity’ clause is also included.

Jealous, overprotective girlfriend/boyfriend on steroids.

Did we forget controlling?

Amazon Publishing will set the price.

Overall, it’s a very interesting move.

Amazon seems very focused on a few elements when it comes to books and content - creating new content sources that it owns, maintaining control over pricing, creating exclusive agreements.

It’s interesting. It’s almost as if Amazon thinks it can control a market into existence. A perfect market where customers behave perfectly and everything goes according to plan. You know what they say about plans – If you want God to laugh, show him your plans.

Penguin Pays Up $75 million for Agency Model Case, Only Apple left standing now

Penguin’s settlement with the DOJ means Penguin has to pay $75 million. This leaves Apple as the last company standing out of the Agency Model Cartel.

It’s quite interesting that -

1. None of the Publishers are left.
2. Apple still refuses to settle.
3. DOJ is painting Apple as the instigator of the Agency Model.

Apple is also under fire for its elaborate tax avoidance schemes (avoidance = legal; evasion  = illegal). This includes gems like – paying less in taxes than it reports as ‘Taxes’ in its annual reports, a cash routing scheme so elaborate that economists are calling it ‘unbelievable chutzpah’, no one being sure of how Apple pays just 2% tax in Ireland when the official rate is an already low 13%.

At some level, it seems Apple has become so big and successful that everyone is going after it. Whether it’s Microsoft in the past or Apple now, you have to wonder – Are they being punished for their actual misdeeds, or just because they got too good and too successful.

The Tax Avoidance case is just avoidance and completely legal. The only cost will be some amount of PR. Until the law changes companies like Apple and Google and pretty much every big company will keep on ‘avoiding’ taxes.

The Agency Model case would perhaps be a few hundred million dollars. That’s less than Apple makes in profits in a day.

Amazon stops selling Kindle Keyboard

Thanks to a blog reader for pointing this out. I forget who (remind me if you’d like a mention).

Kindle Paperwhite and Kindle WiFi (just Kindle) are the only eInk Kindles available to buy now.

Kindle 3 was the favorite Kindle for a lot of people. Hopefully it’s only been removed to be replaced by something else.

Kindle 3 really was the best eReader ever made. It’s sad to see it gone.

Is it time for Kindle to go to 7″?

7″ Kindle eInk – Benefits & Reasons to make a 7″ eInk Kindle

1. A 7″ Kindle screen gives more space. More words fit. More of webpages and PDFs fit. The 6″ screen of the current eInk Kindles is a bit on the small size. It is a bit unsuitable for browsing the web, reading PDFs (actually, for PDFs it’s way too small), reading newspapers, reading magazines, and so forth. A 7″ Kindle screen won’t really help much with things like reading PDFs and newspapers. However, it will allow better web browsing.
2. With the larger screen you get more words per page, turn the page less often, and can get more into the flow of reading. It’s a subtle difference that translates into a slightly better reading experience on the 7″ screen (if you factor out things like weight and feel).
3. 7″ screen on a Kindle might lead to more sales. Tablets have settled on a screen size of 7″ to 8″ as the sweet spot. Even Smartphones are growing bigger and bigger. Perhaps 7″ to 8″ is the ideal size for handheld mobile computing devices like eReaders and Tablets?
4. It would be a change and something new. Gives users a reason to update their Kindle. Gives users something different.
5. Kobo has gone to a 6.8″ screen size with the Kobo Aura. Firstly, the next Kindle has to compete against the Kobo Aura and matching screen size might be a good idea. Secondly, all production of the new ‘High Definion’ eInk screens would be in this 6.8″ screen size. If Amazon wants to benefit from economies of scale and improvements made in the screen technology, its only choice might be the same 6.8″ screen. Of course, Amazon would be unable to leverage some of its experience and expertise gained while working with 6″ screens.
6. B&N is likely to move to a 6.8″ or 7″ screen size too. Mainly for the two reasons stated above (to match Kobo, to build on existing screen manufacturing). That would mean B&N and Kobo both have 7″ screen eInk Readers. Amazon, at that point, would have to match as a larger screen size would become a competitive factor.
7. As resolutions of eInk screens go higher, the screen has to increase in physical size. High Definition on a 6.8″ is almost overkill. On a 6″ screen, HD would be a bit pointless. If PVI/eInk keeps increasing screen resolution instead of adding real innovation, then it’ll be forced to keep increasing screen sizes. There’d be no point to having a Kindle 7 with a 6″ screen and 12,200 by 9,200 screen resolution.
8. Amazon has to start thinking about the ideal screen size to keep for future Kindles. Given that we’ll be adding technologies like flexible screens and color eInk screens (hopefully sometime this century), it makes sense to go to 7″ and perhaps even 8″ Kindles. Color eInk would mean a Kindle better suited to magazines, comics, movies. All of those are much better on a 7″ or 8″ screen.

7″ and 8″ are much better screen sizes for reading – more fits on the page, less page turns. If you have both a Kindle Fire and a Kindle, you can test this yourself.

A 7″ Kindle eInk, on the whole, makes a lot of sense. There are, unfortunately, some drawbacks too.

7″ Kindle eInk – The Pitfalls of switching from 6″ to 7″

1. The new 6.8″ screen size (or a similarly new 7″ screen size) would be comparatively new and untested. The 6″ eInk screens have been in manufacturing since 2007. Lots and lots of issues have been sorted out. Moving to a larger screen size increases the chances of failures and errors.
2. The larger screen size means higher screen costs. Firstly, the larger the screen, the higher the failure rate during screen manufacturing. This would drive up screen prices. Secondly, a larger screen with higher resolution would be a bit more expensive simply due to increased size and improved technology.
3. Going from 6″ to 7″, if not done intelligently, would sacrifice some major eInk Kindle advantages – portability, compactness, low weight, ease of holding.
4. Slightly lower battery life. A larger screen to run. A larger screen to ‘light up’.
5. Slightly lower performance. A larger screen will take slightly more processing power. The higher resolution would definitely take more processing power. It won’t be anything like the crazy delays on the Kindle DX. However, a 6.8″ or 7″ Kindle might be 10% to 15% slower than a 6″ Kindle with identical processor and memory (RAM) and hard drive.
6. Problems for people with weak hands and/or arthritis and/or small hands. A heavier Kindle would be harder to handle. It would be tougher to reach all parts of a 7″ screen. The grip would be larger.

This is an interesting list. The switch to a 7″ screen isn’t without its drawbacks. The one about weight and ease of holding is particularly important. An eReader is held for a long time – even more so if you read a lot. It’s also held in lots of very non-ergonomic positions. Weight plays a massive part in how much strain your hands and elbows and fingers will face. As does your grip. An increase from 6″ to 7″ or 8″ might seem minor – However, if the weight is 15% more and the grip becomes uncomfortable, then the cost on your wrists and hands is too high.

7″ Kindle seems likely

Kobo has moved to a 6.8″ screen with the Kobo Aura HD. Amazon usually lets another manufacturer enjoy the pains of implementing brand new screen technology. Usually it’s B&N. This time it seems to be Kobo that’s willing to be the guinea pig. It’s quite likely that Amazon will use the same 6.8″ screen Kobo uses in the successor of the Kindle Paperwhite. It’ll let Kobo handle all the birthing pains, and then it’ll step in and use the screen once it’s more stable and the kinks have been worked out.

We’ve seen that there are lots of advantages, and also several disadvantages, of such a move. If the only size in which PVI/eINK is making HD eInk screens is 6.8″, then Amazon might not have a choice. It’s also possible (in fact, very likely) that PVI actually discussed screen sizes with Amazon before settling on 6.8″. If that’s the case, let’s hope Amazon has figured out a way to add a larger screen without sacrificing the Kindle’s weight, grip, handling, portability, and battery life.

Books are going through a very interesting Transition. Perhaps Transitions. One of the biggest challenges is ‘connecting’ Authors with Readers.

1. The number of readers is increasing. Perhaps eventually ebooks will reach a state of equilibrium with paper books. By then, the number of people reading books and ebooks might be double the number of people reading books before eReaders arrived. When you consider children, college students, people with weak eyesight, people with weak hands, people who had lost touch with reading, people who can only afford free and cheap books, and similar groups of readers, a doubling doesn’t seem out of reach.
2. There’s really astonishing growth in the number of authors. To be precise, the number of authors publishing their books and reaching readers has grown exponentially.
3. If you check out Twitter (Kindle Review at Twitter – follow us, we follow back), there might actually be more authors on Twitter than readers. It certainly seems that way to me.

This influx of authors, who are finally getting a shot at reaching readers, leads to a very obvious problem.

Too Many Options for Readers

Imagine you are checking out the Hot Dog stands and Ice Cream stands at a country fair. You used to have -

1. A number of big companies (the Big 6) running the stands.
2. A few smaller companies running their own little stands in the corner.
3. Readers lining up at these stands. For every 100,000 or so readers, there were perhaps 1 or 2 stands.
4. Key: The Reader to Stand ratio was roughly 100,000 to 1. Even if we are generous and include all the smaller publishers, the ratio was still at least 10,000 to 1.
5. Key: There was a very well-established hierarchy. Everyone knew Sally makes the best lemonade and Rob makes the best burgers. Everyone knew the stands to go to, and what to expect from each.

Now we’re transitioning to a world where -

1. Tom, Dick, and Harry and their aunt Daphne and her three sisters and their 2 cousins all have stands. Their best friends, their high school classmates, their great uncle, their dog, and their alligator are thinking of setting up stands too.
2. Pretty much anyone who wants to set up a stand, can set one up. Everyone who ever wanted to set up a stand, is thinking about it. The number of food stands and drink stands are exploding.
3. Readers don’t know where to line up. They still have the Big 6 stands they are used to, so they often go there. However, the new stands are intriguing and the food is ridiculously cheap. That yellow stand which sells Crocodile Corndogs for 10 cents each seems mighty tempting. As does the red polka dot stand with lamb burgers for 50 cents. Pretty much everyone wants to check out Billy’s Free Lemonade Stand.
4. Key: The Reader to Stand ratio is changing fast. We’re down from 10,000 to 1 to 100 to 1. This is a huge change. Now, for every 100 readers, there’s one stand. That’s 100 times more stands than there used to be. New stands keep popping up. We might even reach a stage where there is a stand for every 10 readers.
5. Key: No one knows which stand to go to, other than the old established ones from the Big 6. There are 2,371 stands selling home made mango ice cream. Which one is best?

If we tune out all the noise, we can identify and focus on the two main challenges -

1. How does a stand accurately convey its quality and options to readers? How does a stand even let people know it exists? Perhaps the only space it could get is in the dark corner behind the rollercoaster. Perhaps the only people who even notice it are the ones not enjoying the ride.
2. It’s absolutely overwhelming for readers. Firstly, choosing a stand is terribly hard. Secondly, what the food will be like is a complete unknown. If a random stranger on the street stopped you and offered you a free cheeseburger, what would your first reaction be?

We have created huge problems for both Authors and Readers. Too much choice for readers. No way to know quality for readers. Too much competition for Authors. No way to convey quality for Authors.

Three of the Big Challenges for Authors

The first challenge, and for most authors the insurmountable challenge, is to get Discovered.

No one can buy your book if they don’t know it exists.

This is a core truth. A tautology if you prefer fancy words.

Users can’t buy your book if they don’t know it exists.

This is the step that most authors get stuck at. It’s also the step that kills most companies, most bands, most artists, most technologies.

Discovery is Step 1. The reader discovers the book. Then good things happen.

If Authors do get discovered, there are several new challenges -

1. How can readers figure out if the book is a good fit?
2. How can readers gauge quality?
3. How do readers know if it’s worth the price?
4. How do readers tell if the book is properly edited and formatted and typeset?
5. How do readers know if it’s worth their time?

A reader finds a book. Then a reader needs data points to make a Decision.

Decision is Step 2. The reader decides to buy the book. Then the author gets read, hopefully.

Now that the author has sold a book, the challenge is – How do we delight the reader and retain the reader and get future purchases?

Delight & Retention is Step 3. Delight the reader so you retain her as a reader.

If we look at Step 1 (Discovery) and Step 2 (Decision) – There’s not very much the author can do without outside help.

1. Discovery – The Indie Authors that are mastering marketing and social media and getting themselves discovered are anomalies. Absolute superstars, and yet anomalies. We can’t realistically expect authors to also become marketing experts.
2. Currently, that’s what it takes to get Discovered. It’s not scalable.
3. Decision – If an Indie Author does get discovered, how on Earth can that indie author convince the reader his/her work is worth the reader’s time and money. Things like Title, Cover, Description are proxies for book quality, but not good ones. Reviews are useful only when they are in sufficient number and when they are well written.
4. Indie Authors in addition to mastering Marketing, have to master the Decision step. Things as obtuse as getting/coercing reviews out of reviewers.
5. Both Steps are very hard. Both Steps are critical to convince readers to read your books.

The interesting thing is that both steps can be solved by Curation.

Curation – the Missing Link between Readers & Authors

We are seeing readers increase and we might see an eventual doubling of readers. We are seeing the number of authors grow exponentially.

We are not really seeing any big improvements in curation. We aren’t seeing significant increases in the number of curators.

Three Big Curation Problems

The first, and perhaps unsolvable, problem is that the number of books have increased so rapidly that curation becomes 10-100 times more difficult. It’s almost impossible for the existing curators to handle the new curation needs.

The second problem is that curators have to develop trust. They have to figure out how to reach readers. They face the same Discovery and Decision Steps that Authors do. The absolute best romance novel reviewer in the world perhaps has a blog that only 238 people in the entire world know about.

Yet, that one person could help 3 million readers a year find the best romance novels.

The third problem is that crowdsourced curation is being done as ‘sell-side curation’ and not ‘buy side curation’.

Sell-side curation - Curation done by the companies selling the books. This is a big problem because there is a clash in incentives. There isn’t any real financial incentive to be more efficient in curation – in fact, there is a financial incentive to be rather inefficient.

If Amazon & B&N are right only 33% of the time when recommending titles you end up buying. That means 67% of the time they sell you books you don’t end up finishing, perhaps not even the first chapter. They make money regardless.

Buy-side curation would be curation done by people who spent their hard-earned money on the book. It would be curation done in the right Curation Environment and within a suitable Curation Ecosystem. Yes, all reviews in the Nook and Kindle Stores are from people who bought the book. However, the system is set up to avoid things like ‘Formatting Scores’ and ‘Typographical Error Counts’. Things that would be absolutely obvious and necessary in a buy-side crowd-sourced curation model. These are completely, and perhaps intentionally, forgotten in sell-side curation.

Would a sell-side curation engine ever include ‘X% of people finished this book’?

I don’t think so. Because if readers saw ’10% of people finished this book’, half or more of the ones likely to buy it, wouldn’t.

Would anyone care to guess what percentage of books bought at Amazon and B&N are never finished?

Perhaps more than half.

What percentage are never read beyond the first chapter?

Perhaps 25%.

How good is a Curation Engine if it’s selling people books where 50% of the books are books the reader won’t ever finish?

A Buy-Side Reader-focused Curation Engine would include things like ’29% of people didn’t read beyond the first chapter’. That would save everyone who’s on the fence. The Sell-Side would never add this information. Well, perhaps they will once they realize that this would lead to more readers and happier readers and more sales from readers.

What is Curation?

This is a tough question.

Let’s start with what Curation is not.

1. Curation is not some algorithm showing you things you might want to buy. That’s sales.
2. Curation is not impersonal. It has to be aligned with the reader’s tastes.
3. Curation is not complicated. It has to be easy to use and easy to understand.

Curation in ebooks should focus on connecting readers with the books and authors that are the best fit for them.

It’s part match-making and part magic.

Curation should work on both ends -

1. Authors should be matched with the readers most likely to appreciate and enjoy the author’s work. Authors should be matched with as many such readers as possible.
2. Readers should be matched with the books and the authors they will enjoy the most. Readers should be matched carefully, while keeping their best interests at heart (best use of time, best use of money, ease of experience, long-term enjoyment of the author’s works).

Curation is the bridge connecting empowered readers (who have more options than they can handle) with newly free authors (who now have all the freedom in the world but little clue how to reach readers).

Where does the Kindle fit in Curation? Where do devices fit in Curation?

The foundation on which a Buy-Side Curation Engine could be based is recommendations and data input and usage data from real readers.

The Kindle (or for that matter, whatever device the reading is done on) is important for many reasons -

Please Note: All the sharing and connection features would be opt-in. So users who wanted out wouldn’t be forced to participate. Additionally, it would be trends and statistics. No personally identifiable information would be provided.

1. The Kindle captures reality. It captures what people actually buy. It captures what people actually read. It captures relationships between books.
2. The Kindle connects readers to each other. The network effects, if Amazon and B&N were to enable reader to reader connections, would be incredible. Imagine knowing instantly what everyone else is buying, what they are saying about a book, what they are actually reading. I suspect Amazon and B&N have turned off true social networking features for this precise reason. The stores/platforms completely lose control if real network effects kick in.
3. The Kindle is right there. What better time to review a book than right after reading it? What better time to recommend a book than while enjoying it the most? What better way to do a book club than on connected reading devices?
4. The Reading Device is the natural place a ‘Decision/Recommendation Engine’ should sit. Each reader should have a personal decision engine that crunches their reading and buying trends and suggests books that are right for them. It would say – Look, Sally. You never read romance novels by Author X beyond the 2nd chapter. So don’t buy this book. Author Z, on the other hand, you devour. Here are 2 books from Author Z.
5. This Recommendation Engine would have two parts. The intelligent evolutionary algorithm that is processing all your actions and conjuring up your next reads. This would be on your Kindle. The second part would be the crowd sourced Curation Engine that is figuring out what you will enjoy based on millions of data points from the 10,000 readers most like you (or the million most like you, or the 12 most like you). This would exist in the interconnection of all the Kindles and Nooks and Reading Devices.
6. Devices like Kindle and Nook provide companies the ability to figure out Reader DNA and Book DNA and create a near-perfect match. Why is there no progress in these areas? Because these are buying machines and aren’t yet curation machines. These are store kiosks and aren’t yet intelligent servants to readers.
7. Fundamentally, a Kindle should be your pet dog (or cat). A reading assistant. Always at your beck and call.

Most of this can be done, albeit rather inelegantly, without the reading devices themselves. However, the most natural place to fit everything is the Kindle (or the Nook).

If a truly efficient Curation Engine were invented, Reading would Prosper Greatly

Truly efficient Curation would result in a lot of good things -

1. Readers would read more books they loved. That means their overall reading pleasure would increase. Reading would become more appealing than other activities.
2. New Readers would have a greater chance of finding reading true love in their first few books. That means more readers.
3. Authors who deserved to get read, would get read more.
4. The dependence on bestseller lists and store searches would decrease. As a consequence, the importance of stores would decrease. As would their ability to tilt things in favor of their own ‘chosen’ authors and books.
5. The dependence on Publisher approved books would decrease. The importance of Publishers would decrease greatly.
6. There would be a better fit between readers and authors. This would lead to reader-focused authors getting more exposure. It would also lead to readers finding the exact right author for them more often.
7. The absolute best authors would reach a level of sales and fame that is unprecedented. This might seem antithetical to the idea of a ‘Perfect Match’ Curation Engine. However, the very best authors are a LOT better than the next rung of authors. Curation Engines and eBooks will lead to even bigger Author Superstars.

It might seem that perfect curation would lead to lower book sales, a wider distribution/democratization between authors, less reading, and a general reduction in book revenues.

However, the pleasure of reading would increase. The bang for the buck would increase. The pleasure per reading minute would improve. This would make people tend to read more. We tend to do more of what we greatly enjoy. It would make people read the authors that deserve to be read more often. It would lead to people-created superstars. Sometimes these would be the ones the Big 6 and the Towering 2 are pushing. Sometimes it would be the People’s Champions.

We needed eBooks and eReaders to allow Reading to compete with video games, TVs, movies. They have delivered. Reading is adding readers and authors. It’s flourishing. There has never been a time, ever, when so many people were excited about writing books and reading books.

The next step is a Really Efficient Curation Engine. The Evolutionary Algorithm part tracks your reading habits and your reading reality and suggests new books. The Crowd-Sourced part finds your ‘reading twins’ and helps deliver suitable candidates for your future reading. This Curation Engine really is the next big step. It would greatly increase Reading’s ‘Pleasure Per Reading Minute’ and ‘Pleasure per Dollar’ scores. It would make reading more attractive than many of the other pursuits and passions competing for readers’ time and money.

The next big Inflection Point in books isn’t when Amazon gets 90% market share or when color eInk arrives. It’s when we get an Efficient Curation Engine that pushes Reading well ahead of readers’ other pursuits and passions.

It’s worth taking a look at Kindle Fire HD Pain Points. It’ll give us a better idea of areas in which Amazon can improve Kindle Fire HD and mount a stronger challenge in the Tablet Wars.

Please Also See: Kindle Fire HD Issues & Workarounds post that covers Top 10 Kindle Fire HD Issues.

Kindle Fire HD Pain Points – Top 9 Kindle Fire HD Pain Points

Please check out the Kindle Fire HD Issues & Workarounds post for solutions to most of the below issues. In this post we’re just covering a quick suggestion or workaround.

1. Flash. This might be the #1 Pain Point. The Situation: Adobe has ended support for Flash on Android devices. This means that you have to search around and find a browser that supports Flash. You can also side load Flash from elsewhere. Solution: Amazon should include Flash with the Silk browser and should work with Adobe to extend Flash Support or create an End of Life Release that keeps working on Android. Dangers: Flash security vulnerabilities. Workaround: See forum thread for Flash on Kindle Fire HD. Also see the section below for Amazon’s solid move to support Flash on Kindle Fire HD.
2. Books from other eBook Stores. This comes up surprisingly often. Lots of users want to read books from other stores. Solution: Sideload an Android App for B&N or Kobo to your Kindle Fire. This is mostly a case of users not knowing this is already possible.
3. Computer (PC or Mac) doesn’t recognize the Kindle Fire. Another very common issue. Solution: For Windows you have to make sure you have drivers that support MTP (the new file protocol Android 4.0 uses; Kindle Fire is built on Android 4.0). You can do this by updating Media Player to the latest version. For Mac you can get a file transfer utility. Mac users need to install a free app, Android File Transfer, to complete a USB transfer. Visit android.com/filetransfer and follow the onscreen instructions (Thanks to Kindle Forums). For PC and Mac you can also try PTP mode (Camera Mode) instead of MTP (you can change this in Settings).
4. WiFi doesn’t work with Kindle Fire HD. Very, very common. This problem is hard to diagnose. Restarting Kindle Fire HD and restarting router will occasionally fix it. Sometimes you will have to tweak the Kindle Fire’s settings. Tweaking the router settings might help. This varies a lot from case to case. Workaround: Check out Amazon’s Kindle Fire HD WiFi FAQ.
5. Email isn’t working right. Solution: Amazon to devote SERIOUS time to making email work very well and smoothly. As we see with the Camera issue below, Amazon sometimes forgets areas and features that don’t directly lead to more purchases from Amazon.
6. Camera functionality. The in-built Camera on the Kindle Fire HD is hidden. A few apps like Facebook and Skype can use it. However, there’s not really any in-built Camera App. Solution: Add a PROPER camera app that allows taking photos, taking videos, using a timer, and other features. A nice bonus would be photo sharing features and email sharing and photo printing wirelessly to printers.
7. Battery & Battery Charger Issues. There’s something about tablets and chargers and batteries. Lots and lots of people run into one or more of – Charger not working, Kindle Fire HD not turning on, Kindle Fire not charging, Charge Indicator showing wrong amount, Charger port is loose. Potential Solution: Amazon could invest some resources into strengthening the charger and charging hardware and making the battery and battery life indicator more dependable. Not saying it’s bad – just that it can be and should be improved. Potential Workaround: Treat your charger carefully BEFORE problems develop.
8. Apps not side loading. This is a strange one. Amazon rather generously (considering it hurts their own content sales) allows side loading of apps from other stores. A lot of people run into problems with this. Perhaps better instructions would help people. Can’t really think of a proper solution.
9. Kindle Fire HD will not turn on. Surprisingly common. Listing this separate from the Battery Issues since it’s so common. Potential Solution: Charge for an hour or two. Unplug. Press and hold the power button for 20 seconds. This is from the Frequently Asked Questions thread.

Kindle Fire HD Pain Points – A Workaround for Flash

Here’s a solution for Flash from Laura M. Dean -

With the latest update for the Kindle Fire, Amazon has added a feature to Silk called the “Experimental Streaming Viewer” that should allow many Flash-based videos to be played on the Fire.  I have tested it with CBS, NBC and ABC, and it works.  More info:

Go to the Web tab > Menu > Settings > Accelerated page loading > turn on.

This will turn on two other settings:
- Enable Flash Forward
- Prompt for experimental streaming viewer

Complete information is here, including how to use the viewer:
http://www.amazon.com/gp/help/customer/display.html/?ie=UTF8&camp=1789&creative=390957&linkCode=ur2&nodeId=201010090&tag=thrshoguideaa-20#flash

Hopefully this works.

Kindle Fire HD Pain Points – Thoughts

It’s very surprising to see a few things -

1. Flash is a major advantage for Kindle Fire HD over iPad. Amazon shouldn’t ignore it. The move to make the ‘Experimental Streaming Viewer’ is a good move. Amazon needs to do a lot more. This could turn into a major competitive advantage over iPad and also over other Android Tablets (since Adobe has stopped Flash support for Android).
2. Android File Transfer App for Mac should be bundled with Kindle Fire. As should drivers for MTP for Windows 7 and Windows 8. It’s very strange to get a new device and then not have it work with your PC. Plugging Kindle Fire into a PC or Mac should start off a launcher that asks you whether you want to install drivers and/or the file transfer utility.
3. Not sure what the solution for Kindle Fire HD WiFi issues is. Every single device runs into WiFi problems. Note: And, of course, for people who run into a WiFi problem, the only one out of their devices not working will be that one. It’s Murphy’s Laughing at You Law.
4. Camera – These are two fundamental Tablet Use cases. It’s strange that Amazon (and B&N) ignore the Camera. At what point is Amazon going to understand – No one cares what YOU think, only what they want to do with their Tablet. Basically, a LOT of people wants dual cameras of good quality on their Tablets.
5. Email - Having email not work well is completely unacceptable. Any amount of effort Amazon can put into this would be worthwhile. At least 25% and perhaps as many as 40% of Tablet owners would prefer a Tablet with a very solid, stable, works-all-the-time Email Client/App.
6. Battery & Battery Charger issues. Again, every device seems to run into battery issues. Not sure if a solution exists.

Overall, Kindle Fire HD does slightly better than Kindle Fire 1 did on pain points. However, there are still way too many pain points. It’s very encouraging to see Amazon add the ‘Experimental Streaming Viewer’.

What are your Kindle Fire HD pain points? What things would you most like fixed and/or added?

1. The first data-point that’s interesting: On finding out I work with computers, the most frequent question is – What Tablet would you recommend? I’m thinking of getting one. I don’t think PCs are going to die, not by any stretch of the imagination. However, no one ever asks about PCs or Phones. Just Tablets. Perhaps Tablets are cool and new and unknown. Perhaps with PCs and Phones, people already know enough and/or already own one. Whatever the reason, people seem to be really, really interested in buying Tablets.
2. The second data-point: I’ve never found any user whose needs weren’t matched by the iPad. This might seem strange. However, it’s really just my experience. Online people will have a budget, prefer a certain company, be hung up on specifications, or have a certain allegiance (Android, Apple, Amazon). The people I’m meeting in real life – well, they never seem to mention price or allegiance. They just want a Tablet that gets the job done. No one ever says – What’s the best Android Tablet? iPad or iPad Mini? Which Kindle Fire? Ever. They just want something that gets the job done.

As opposed to online, in real life, people aren’t looking at a Tablet as an extension of their relationship with a favorite company, an extension of a philosophy, an accessory, or a statement of who they are.

They simply want to do X (sometimes X and Y and Z), and they wonder if a Tablet is a good choice.

Here are the two things that really surprised me -

1. 80% of the time a Tablet is indeed a good choice. People usually want to do very non-specialized things like checking email, reading books, surfing the web. A PC is overkill.
2. 100% of the time that a Tablet is the right choice for their needs, the iPad is the best choice as a Tablet. Yes – 100%.

All of this is anecdotal evidence, so take it with a shaker of salt.

The two things that keep striking me are -

1. People don’t need a PC any more. They can get by with a Tablet.
2. People don’t need any other Tablet. They can get by with an iPad.

Note: This is over a time period of 3 years. The data points have stayed consistent.

Do people not need PCs any more?

Not really. Most people don’t.

This goes against every single assumption I could make about the future of PCs and Tablets. There should be no reason for Tablets to be preferable to a PC. It’s like a Ninja choosing a butter knife instead of a katana.

However, in real life, it seems most people don’t really need a Personal Computer any more. They don’t need a desktop or a laptop. They just need a Consumption & Communication device. Most people aren’t ninjas – they just want to butter their toast.

Tablets are portable, they are focused on consumption, they are dead simple to use. They are cheap.

People never mention that iPad provided 80% of people’s computing needs at 50% of the price of most laptops and PCs. Apple didn’t win with magic fairy dust. It won on value and ease of use. If you think back to when iPad was introduced, everyone assumed it would be $1,000. $499 was a stunning price.

Most importantly, iPad covered 80% of what people wanted a computer for. It was a GREAT personal consumption device.

Whether we admit it or not, the world is moving to a state where we’ve run out of work for people to do. There just isn’t that much time needed to do your core work. 70% to 80% of people’s waking time is, or will soon be, taken up by consumption – news, weather, entertainment, movies, sports, books, communication with friends and family, watching photos, sharing how you feel about the bird fluttering by, sending a photo of your sandwich to the only 2,313 people in the world who care.

Tablets fit in perfectly. Perhaps 50% to 70% of people can survive on Tablets.

If you really think about a future world where robots handle a lot of the work and there are very few ‘critical’ jobs – 75% to 90% of the developed world’s population will simply have to find things to do with their free time. That’ll be humanity’s greatest challenge (it’s only partly sarcasm) – to amuse people who don’t know what to do with their free time.

iPad is perhaps the Best Tablet for nearly everyone who can get by on a Tablet

iPad is unencumbered. It doesn’t try to solve any problem other than provide people a consumption device.

iPad’s competitors keep trying to solve big problems like ‘providing a great keyboard’ and ‘providing content creation and not just consumption’. That’s like a movie theater company trying to educate its audience instead of entertain it.

There are a few things that make iPad the best tablet for nearly anyone who uses a Tablet in the Consumption-Enabler sense-

1. The widest range of apps and the best app quality. Both things are critical. The more the apps, the higher the chance that you find the apps you need. The higher the quality of apps, the better your experience. The more the apps, the better the quality - the more likely you are to get by with a Personal Consumption device instead of a Personal Computing device.
2. iPad nails the core Tablet functions. What are the main Personal Consumption areas? Books, movies, music, games, magazines, Internet, social networks, communication, photos, texting, Skype. iPad gets all/most of these right. Meanwhile, competitors like Amazon and B&N don’t even address things like taking photos and communicating. It’s as if they missed the entire ‘other people and photos and video calls are a great way to entertain yourself’ part.
3. With iPad and iPad Mini, Apple provides both high-end and mid-end Tablets. Please Note: The comparison is against Personal Computers. By those standards, iPad severely undercuts PCs, and iPad Mini goes even more extreme. Within this ‘super high value for money’ Tablet category – iPad and iPad Mini take up the mid and high ends. Everything apart from dirt cheap personal devices.
4. Extreme Ease of Use and High Quality Build of Hardware and Software. Smoothness. There’s smoothness in everything including in ease of use and hardware and software.
5. Every other Tablet isn’t addressing the core needs of the people looking for a Personal Consumption device. They are still trying to make mini Personal Computers.

The last one is interesting. There are so many Android Tablets, and there will be so many Windows 8 Tablets, that sooner or later companies will stumble across the formula. However, it’ll be fortuitous and not the result of a well-planned strategy. On the other hand, a company that goes after Consumption hard could potentially blow up the iPad and iPad Mini.

7″ Tablets were a continuation of the iPad ‘Personal Consumption’ focus, just cheaper

The rise of 7″ Tablets was very interesting.

1. Nook Color came in at $199 and demonstrated that you could get a Personal Consumption device for $199. That such a device could do 70% to 80% of what iPad could do. That’s why it did well. That’s why $199 Tablets were such a threat to the iPad. They were doing to the iPad what the iPad was doing to $1,000 laptops and desktops.
2. iPad Mini was Apple’s response. It isn’t about screen-size (and Steve Jobs was right that 7″ means nothing). Yes, it’s more convenient. However, iPad was selling just fine. It’s only when 7″ Tablets PRICED VERY LOW came out that sales growth slowed down. Very cheap 7″ Tablets answered this consumer question exceedingly well – What percentage of my personal consumption needs can this device satisfy? At what price?

iPad Mini was necessary due to the low price and high ‘consumption coverage’ of 7″ Tablets. It delivered.

iPad Mini is a distillation of the iPad. It caters to 80% of the Personal Consumption Needs of Consumers for just $329 (65% of the price).

1. Why is Apple not breaking out iPad and iPad Mini sales? Because iPad Mini totally destroyed iPad sales. A drop of 30% to 50% wouldn’t be out of question. Apple always reveals numbers – but now it conveniently doesn’t. How interesting.
2. Why are Android Tablets priced at $269 and $299 suffering so much? Because iPad Mini is just a bit more expensive ($329) - Yet it delivers 90% or more of what iPad delivers, and it delivers it in very high quality. Android Tablets deliver less, in lower quality, and at a price that is not significantly lower. iPad Mini wins when we consider Percentage of Consumption Needs Satisfied AND Quality of Experience AND Value for Money.

Android Tablets will continue to rise. There are just so many of them that enough of them will hit the sweet point sooner or later – Cover most of the core consumption needs AND do it at a cheap price point.

Microsoft Tablets will rise once they get CHEAPER ones out. There are rumors of $249 and $299 Windows 8 Tablets that have 7″ screens. Those might really hurt iPad Mini if they understand that consumers are looking for consumption enabling and consumption enhancing devices.

iPad and iPad Mini will continue to be the Best Tablet available. Unfortunately, as prices of competing tablets drop, consumers will choose cheaper options.

Why is iPad the Best Tablet available?

Well, firstly, no one else is approaching Tablets the right way -

1. Microsoft is approaching Tablets as smaller PCs. Microsoft doesn’t realize that C is for Consumption, not Computing. Its approach is great for Business, but not for everyday consumers.
2. Google is approaching Tablets as another way to gather products (people to advertise to) for its main customers (advertisers). Android Tablets will win out because they are much cheaper. However, there is a difference between ‘Best’ and ‘Highest Selling because they are cheaper and available in 5,000 flavors’.
3. Amazon is approaching Tablets as a way to gather customers and sell them stuff. Why is it that Amazon focuses so much on selling and so little on consumption and core Tablet features (email, camera, photos, YouTube, videos)? Because it views the Tablet as Personal Selling Device and not a Personal Consumption Device.

Apple is the only company that’s focused on the Tablet as a Personal Consumption device. Perhaps Personal Consumption Enhancer is the most accurate term.

iPad and iPad Mini are optimized for consumption -

1. Widest range of apps related to consumption.
2. Smoothest user experience and ease of use.
3. Most optimized software for core tablet functions i.e. reading, watching movies, email, surfing the web, taking and sharing photos, communication, video calling, games, etc.
4. Most optimized hardware for consumption. This is key – the hardware is optimized for consumption in many, many ways.
5. Focus on the user experience and on the user as a consumer. Not product, not creator, not customer for things in the future – just a consumer.

A succinct way of putting it would be – Nothing comes between you and your enjoyment of free time on an iPad Mini.

Add on to this the additional stuff -

1. iPad OS is based off of iPhone OS and has been refined for 10+ years.
2. iPad has a lead in apps and a lead in money made from apps. Therefore, for now, iPad Apps get first priority from developers.
3. iPad is standing on the shoulders of iPhone and iPod. This includes having a huge customer base to sell to.

All of this, and numerous other advantages, mean that iPad is the Best Tablet available. If you were to give ANY user 2-3 weeks with all Tablets. If they were free of any allegiances or prejudices (which, admittedly, is very unrealistic), they would choose the iPad 90% or more of the time.

Perhaps the more accurate statement would be – the iPad would meet their needs 90% of the time. It would meet their needs better 90% of the time.

In some cases, it’s absolutely irrefutable evidence – a much-needed app is only available on the iPad. In other cases, it’s harder to explain things – a much easier to use email program. However, that 90% estimate seems correct to me.

iPad is the Best Tablet and its destined to die on its own sword

iPad will die for the same reason that Netbooks were killing Laptops before iPad took over that duty. For the same reason that iPad is eating away at PC Desktop Sales.

People want more for less. Often they are willing to take less for less – especially if they think they are getting more for less.

Apple told users – Why pay $1,000 for that laptop? Here’s an iPad Tablet. For $499 you can do 80% of what you do. Apps are cheap, so all the software is cheap. The software and hardware might not let you do 100% of what a laptop does, but the software and hardware cover 70% to 80% of what a PC does.

It established precedent. It became OK to cut down what you could do with your Personal Computer/Consumption-Enabler.

As long as you got cheaper hardware and much cheaper software in return.

Now, Amazon and Google are telling users – Why pay $499/$329 for that iPad/iPad Mini? For $199 you can do 70% of what you do on an iPad Mini. Apps are free now – you don’t even have to pay. They might not be as pretty or as polished – but they are free.

Google and Amazon are just continuing down the path Apple started users on.

It’s very interesting in a way. Apple talks about not compromising and focusing on quality. However, with the iPad, it created a precedent of compromise – In what users expected their Personal Computer/Consumption-Enabler to do for them.

There was no compromise on build quality. Just a compromise in what the device can do and, most importantly, what the user could do with their device.

A switch from Consumer+Creator to Consumer+Consumer-Extraordinaire.

The net result is that users now expect cheaper and cheaper hardware and cheaper and cheaper software. And they are willing to compromise to get it.

Netbooks were doing exactly this – offering a compromised experience that focused on consumption and came at a very low price. The PC companies handicapped them because the low price killed their profit margins. It was inevitable that something else would finish the job. That’s where iPad came in. With the added bonus that it was a Luxury Product and a Fashion Statement. A prettier Personal Consumption Enhancer. For half the price. Does 80% of what you do with a PC.

The Age of the Personal Consumption-Enabler and the End of It

When Android and Amazon Tablets eat up the iPad, we’ll enter a newer age – The Age of the Personal Consumption-Enhancer & Advertiser. Where users will say – As long as the hardware is really cheap, and the software is really cheap, it’s fine if this device is mostly focused on consumption. It’s fine if it constantly advertises to me and tracks me and keeps trying to predict my behavior and influence it in subtle ways.

The Age of the Personal Consumption-Enhancer & Advertiser – a world of free-everything. Where the only thing that’s paid for is access to the consumer and to the consumer’s behavior.

There might be a 10% to 20% part of the market that looks for a Personal Computer. Perhaps another 10% to 15% of the market that looks for a Personal Consumption-Enabler. However, the majority of the market is going to shift to a Personal Consumption-Enhancer and Advertiser.

The Personal Consumption-Enhancer & Advertiser will eat away at the Personal Consumption-Enabler, just as the Personal Consumption-Enabler is eating away at the Personal Computer.

If Apple hadn’t introduced an iPad Mini, it would have lost a lot of market share to cheap 7″ Tablets. With the iPad Mini it has only bought itself some time. Apple can’t keep matching prices with Amazon and Google and Microsoft indefinitely. As prices go lower, things get very tough for Apple – it either gives up its great margins, or it gives up market share. It might even end up giving up both – because higher price is a core part of its identity and desirability.

This forced Amazon to introduce a temporary $20 discount on the Kindle Fire HD.

Soon after there were reports that B&N was considering selling its Nook unit to Microsoft for $1 billion.

TechCrunch had some additional details and two of these were very interesting (only if true) -

1. B&N plans to end Nook Tablets by April 2014. This would suggest the Nook HD and Nook HD+ are its last tablets. Which basically means an end to the Kindle Fire HD vs Nook HD competition – the battle of the tiny closed ecosystems.
2. B&N plans to let eReaders die out naturally – as users transition to Tablets. This doesn’t suggest an end date. However, it does suggest that B&N doesn’t plan to fight. Perhaps it ends Nook eReaders in 2014 or 2015. That would mean the end of Kindle vs Nook.

Both of these are very impactful things.

Kindle vs Nook – A Quick look back

Kindle vs Nook has had many twists and turns -

1. Amazon introduced the Kindle eInk Reader in November 2007. Everyone (except people who actually read) pretty much wrote it off. However, by mid 2009 it began to seem that the Kindle had a good chance of becoming a hit.
2. B&N introduced the Nook eInk Reader (with a tiny LCD panel at the bottom for navigation) in October 2009. After this, Amazon and B&N have gone head to head in the eReader market ever since. They have been #1 and #2 for most of that period.
3. Apple introduced the iPad in March 2010. This threw things off for eReaders as people tended to prefer a multi-purpose Tablet over single purpose Ereaders, especially casual readers. Strange that companies focused on selling books would care about people who don’t want to buy devices dedicated for reading. However, that’s the path Amazon and B&N chose.
4. B&N introduced the Nook Color. This was a reading Tablet, priced at $200, and focused on reading and reading related functions. The Nook Color took off in a major way - Illustrating that there was huge demand for a low-priced Tablet. At the time, iPad was $499.
5. Amazon introduced the Kindle Fire in end 2011. B&N introduced the Nook Tablet, an improved version of the Nook Color, around the same time. Thanks to Amazon’s huge customer base, and to strong marketing, Amazon was able to get the lead in ‘Small Tablet’ sales over the Nook Tablet. By lead we mean a 3:1 or 2:1 lead.
6. 2012 was eventful as we got the iPad Mini and the Nexus 7. Amazon introduced the Kindle Fire HD and the Kindle Fire HD 8.9″. B&N introduced the Nook HD and the Nook HD+ (9″).
7. Two things happened. Firstly, Amazon and B&N’s attempt to target the iPad failed – mostly because the iPad Mini was a huge hit and beat them to the ‘let’s kill the iPad’ game. Secondly, Kindle Fire HD sold decently but B&N’s Nook HD sold poorly.
8. Meanwhile, all through 2012 we saw more and more sales go to Tablets and 7″ Tablets and less to eReaders. eReaders were still selling 10 million+ units a year. However, they were no longer growing markets and the long-term future became unclear. We don’t know whether the lack of evolution of eReaders led to poor sales, or whether it was Tablets. However, eReader growth seems to have stalled.

This leaves us in a very interesting position.

1. In eReaders, we have Kindle at #1, Nook at a strong but distant #2, and Kobo at #3. After that, we have a lot of smaller competitors and Sony. Kindle vs Nook is still very important. B&N routinely advances the state of the art in eReaders and drives innovation.
2. In 9″ and 10″ Tablets, we have Kindle Fire HD 8.9″ and Nook HD+ as almost non-factors. So Kindle Fire HD 8.9″ vs Nook HD+ is mostly an academic comparison. Most people seem to prefer iPad Mini. Basically, 7″ Tablets and iPad Mini have begun to kill off the 10″ Tablet market.
3. In 7″ and 8″ Tablets, we have iPad Mini vs Nexus 7 vs Kindle Fire HD (vs Nook HD). Kindle Fire HD vs Nook HD isn’t that important any more – Mostly because Nook HD has lost mind share. With the addition of Google Play Store it’s winning that back. So, perhaps, by mid 2013, Kindle Fire HD vs Nook HD will be meaningful again.

When you consider all this context, it’s going to be a bit sad if B&N leaves the Tablet space in April 2014 and the eReader space in early 2015. Kindle vs Nook will just be an old memory.

What happens if B&N leaves the Tablet space?

Not very much for the general Tablet space.

The best-selling Tablets are – Apple, Samsung, Google and Amazon. Depending on what month you check, one out of Google or Amazon has the #3 spot. By Google we mean the Asus manufactured Google Nexus 7.

Nook was perhaps 5th or 6th. The 5th or 6th player leaving a space doesn’t do much.

The one place it creates an impact is in the space of ‘Reading Tablets’ – a nebulous space catering to people who primarily want a Tablet for reading.

For readers, it made more sense to get a Tablet from Amazon or B&N. If B&N exits the space, then Amazon becomes the clear and obvious choice. This would mean a clear boost for Amazon and Kindle Fire HD sales. Which in turn would greatly strengthen Amazon’s lead in ebooks.

B&N’s supposed 2014 and 2015 strategy  of ending device sales and focusing on Reading Apps runs into a roadblock – Kindle Fire HD does not have a Nook reading App. If most serious readers looking for a Tablet start picking Kindle Fire HD, B&N loses these readers.

Fundamentally, B&N’s strategy is flawed. The 20% of Readers that account for 80% of book sales tend to pick either a dedicated eInk Reader or physical books or a Reading Tablet. By leaving the Reading Tablet space, B&N leaves all these users to Amazon.

These 20% ‘Best’ Customers are the stars of the rest of this post. Their importance grows as we look at Kindle vs Nook in the dedicated eReader Market.

What happens if B&N leaves the eReader Space?

We could partition out serious readers (‘Best’ Customers for Books) as readers who will buy one or more of -

1. Paper Books.
2. A dedicated reading device i.e. an eInk Reader.
3. A Reading Tablet.
4. A general purpose Tablet.
5. A mix of one or more of the above.

By leaving the Reading Tablet space, B&N would hand over ‘serious readers’ (the ‘Best’ customers) who want a Reading Tablet to Amazon.

If B&N also leaves the dedicated reading device space (eInk based eReaders), then it also hands over the ‘Best’ Customers who want to buy a device optimized for reading to Amazon.

This creates a huge problem.

1. Firstly, at least 25%, and perhaps as many as 50%, of the most important readers (those who buy 80% of books) will choose an eInk Reader and/or a Reading Tablet. By leaving these two areas, B&N is giving Amazon the best book buying customers.
2. Secondly, as Amazon has stated before, people buy MORE books when they get Kindles. 2.7 times more. So these very good customers become great customers after they own an eInk Reader. Perhaps there’s a similar, though not quite as strong, effect when people buy a Reading Tablet.
3. Thirdly, that 2.7 times figure includes paper books. It makes sense that a person who owns a Kindle and/or a Kindle Fire HD would buy their paper books from Amazon more often. If nothing else, convenience and the relationship/trust means that Amazon is likely to become the #1 choice for paper books too.

Somewhere between 25% to 50% of the ‘Best’ Readers switch over to Amazon.

Of course, this doesn’t factor in that Amazon and B&N have a rough 60% and 30% share of the ‘Best’ readers who have already switched over to eReaders and Reading Tablets. Amazon goes from strong to ridiculously strong. B&N goes from decently strong to very weak – Because the 30% share it already has will move to other devices if B&N stops making eReaders and Reading Tablets.

The Concept of the ‘Best’ Readers

In this age of political correctness, where a customer who spends $1 a year wants to be considered equivalent to a customer who spends $1,000 a year, it is perhaps unacceptable to point out that, in any market, 20% of customers are the ‘Best’ customers. The ones who basically keep the market going. It exists for every market -

1. In movies, these are the people who watch movies in the theater and buy DVDs and digital movies. Lots of them.
2. In video games, these are the people buying $60 games and $300 consoles and $2,000 PCs.
3. In books, these are the people buying hardcovers and lots of books and lots of ebooks.

Whether it meets the political correctness threshold or not, the truth is that the people contributing 80% of the revenues are the ones who are keeping the industry going.

For example: On Pandora, artists get a few pennies per 1,000 songs streamed. A user might listen to Band X 50,000 times and might generate 50 cents for Band X. However, the customer who buys a concert ticket for $50 is 100 times more important. The customer who buys the CD for $10 is 20 times more important.

This is a critical distinction and this also applies to books, whether the Lives in Switzerland, Recycles 5 times a Day, Warrior Chief of Political Correctness likes it or not.

We have the ‘Best’ Readers that are perhaps just 10% to 20% of the customer base – However, these customers generate 60% to 80% of the revenue. They are, in effect, keeping the books industry alive.

There are two distributions that are generally accepted -

1. 20% of the customers are the ‘Best’ customers. They generate 80% of the revenue.
2. 10% of the customers are the ‘Best’ customers. They generate 60% of the revenue. 30% of the customers are ‘Good’ customers. They generate 30% of the revenue.

In either case, it’s the Good and Best customers that matter. The remaining customers don’t really matter. Of course, woe to anyone who reminds them of it.

It’s a big assumption to make. However, the facts will bear this out. Facts that only Amazon and B&N have. Which makes B&N’s decision to shift to Reading Apps even stranger.

By ending Reading Tablets and eReaders, B&N would lose the Best Customers and the Good Customers

Firstly, it’s pretty safe to say that the Best customers and the Good customers will end up with a reading Tablet and/or a dedicated reading device (if they go with ebooks). If you’re the exception that proves the rule, you’re exactly that – an exception who reads 53 books a year on your Device X which is not focused on or optimized for reading.

If B&N leaves both spaces, then it leaves behind the 20% to 30% of customers that account for 80% to 90% of book sales.

What does that leave? The remaining huge numbers (70% to 80%). Wow – that’s a lot of users. The only problem – they contribute just 10% to 20% of book sales.

Please keep in mind that this is for ebooks. B&N isn’t walking away from the Best Customers and the Good Customers in Physical Books. However, it is making them Amazon customers (via eReaders and Reading Tablets) and making them likelier to shift.

B&N might be walking away from the core audience it needs to survive

If B&N were to analyze all the data it has on reading patterns and purchase patterns, it would find the following -

1. 30% to 50% of its ebook sales come from eReader owners.
2. 25% to 40% of its ebook Sales come from Nook Tablet owners.
3. The rest of its ebook sales comes from other reading apps. This might be as low as 10% or as high as 45%.

It might also find that Nook and Nook Tablet owners account for as much as 25% to 35% of paper book sales from B&N stores.

I would be willing to bet serious money that B&N never took the step of analyzing this data, especially the ebook sales & paper book sales inter-relationship. For that matter, it never even properly tried to build a connection between ebook sales and physical book sales.

By walking away from dedicated eReaders and reading tablets (and this is still an IF, based on rumors and hearsay), B&N is giving up the customers that are accounting for 65% or more of its ebook sales and 25% or more of its paper book sales.

Those users aren’t going to switch back to 100% paper books. They are going to switch to other devices that are optimized for ebooks and reading. Those, rather inconveniently, happen to be from Amazon.

If B&N ends the Nook eReader line and the Nook Reading Tablet line, it would be handing over 50% or more of its Best Customers and its Good Customers (for ebook sales) to other companies, mostly Amazon. If B&N tries to replace dedicated Nook eReaders and Nook Reading Tablets with reading apps for iPad and Android devices and Windows 8 devices, it would be switching from the Best Customers and the Good Customers to the ‘Not so Dedicated’ Readers who account for just 10% to 20% of book sales.

It’s the absolute worst strategy decision B&N could make. We wouldn’t see Kindle vs Nook replaced by Kindle vs B&N Reading Apps, we would see it replaced by Kindle vs Kobo and by Kindle vs Don’t Read. There’s no room for B&N in eBooks if it doesn’t have both a reading focused eInk eReader and a reading focused Reading Tablet.

Amazon has two paths it could take -

1. Make Kindle Fire HD 2 a more polished version of the Kindle Fire HD. Lots of incremental improvements in various areas. Since Kindle Fire HD is a pretty decent Tablet, this would seem a reasonable path to take.
2. Add one or two or three really killer features that put Kindle Fire HD 2 head and shoulders above other Android Tablets. Killer Features that turn Kindle Fire HD 2 vs iPad Mini 2 into a Real Contest.

We know what path Amazon likes to take – the boring one with incremental improvements.

However, in 2013 and beyond, this might not be enough. Why?

Kindle Fire HD’s competitors are set to improve drastically

We will likely see each of the top 4 Kindle Fire HD competitors improve rapidly and drastically in 2013.

1. iPad Mini 2 might be iPad Mini Retina. This would instantly fix one of the two main iPad Mini disadvantages (lower screen resolution). The other possibility is that iPad Mini 2 is a lower priced iPad Mini. This would be worse as it would eliminate the key things keeping Kindle Fire HD sales decent – higher value for money & lower price.
2. Nook HD has already improved massively by adding Google Play Store and offering users frequent discounts. Users can get a Nook HD for $149 to $169, depending on what sale they catch. They get a great piece of hardware and also twin stores – the curated Nook App Store, the open Google Play Store.
3. Nexus 7 2 is rumored to arrive soon with 1920 by 1200 screen resolution, wireless charging, NFC, and front and rear cameras. Nexus 7 2 is also rumored to be priced cheap at $199. This instantly makes it very competitive with Kindle Fire HD and Nook HD. Perhaps clearly better, depending on how it performs in real life.
4. Samsung is improving its Tablets rapidly. It’s attacking both the value -end and the high-end. Thanks to the incredible success of its phones, it has a very large customer base. It sold 7.7 million Tablets (analyst estimates) in Q1 2013, which is likely to be more than Kindle Fire HDs, Nook HDs, and Nexus 7s combined.

Amazon is in a bit of a pickle. It can’t be Samsung and release 10-20 tablet models a year. It can’t be B&N and give up its entire ecosystem to Google. It definitely can’t be Apple with its large customer base of people who already own Apple hardware - People who tend to prefer Apple products, all other things being equal or close.

This makes it imperative that Kindle Fire HD 2 is -

1. Good enough to compete in the Holiday Season.
2. Good enough to be competitive in 2014 until Kindle Fire HD 3 arrives.
3. A significant improvement over Kindle Fire HD. Adding dozens of incremental improvements to the Kindle Fire HD features might not be enough. Amazon must add a few killer features that set Kindle Fire HD 2 apart. Kindle Fire HD 2 needs to be a big step forward from Kindle Fire HD.

The problem with incremental improvements is that they don’t really stand out.

The Time for Incremental Kindle Fire HD Improvements is Gone

Let’s say Amazon improves Kindle Fire HD in 8-17 areas via small, incremental improvements -

1. Higher screen resolution in the Kindle Fire HD 2.
2. Some small interesting feature like wireless charging or NFC.
3. Slightly better battery life.
4. More compact and lighter.
5. Slightly lower price.
6. More features for enhanced reading.
7. More Sharing and Social Features.
8. Addition of some small free content streams for Kindle Fire HD owners.
9. 10 more small incremental improvements.

On paper this sounds good. It also makes Kindle Fire HD competitive with iPad Mini Retina and Nexus 7 2 on paper.

However, iPad Mini and Nexus 7 have much older and stronger and richer ecosystems. What incentive is there for a user to pick Kindle Fire HD 2 instead?

Users need Killer Features to Switch

There’s no Killer Feature in the Kindle Fire HD that will make users say – Yes, iPad might have 350,000 Tablet optimized Apps, and it might be prettier and shinier, but Feature X and Feature Y in the Kindle Fire HD 2 make it the better choice.

The Best Speakers are a Killer Feature only for audiophiles. We need a Killer Feature that applies to 80% of the technology device buying population.

Amazon thinks it can cobble together 10-20 small advantages and turn them into a Killer Feature. However, people want simplicity. They don’t want to read an entire table and add up the little wins.

They want a BIG feature that will get them to buy Kindle Fire HD 2.

Apple understands this and pushes this hard. Siri. Retina Display. FaceTime. Apple will talk about all the improvements. However, it will focus on 1-4 main Killer Features and drum those into users’ heads.

So when the user has to decide what Tablet to buy, the user has a table of 27 technical specifications from one company, and it has a list of 3 Killer Features from Apple.

Guess which device the user goes with more often.

Note: If you notice the Samsung Ads, they don’t just make fun of Apple, they also highlight their own product’s killer features (sometimes even when they aren’t killer features).

A Killer Feature isn’t a tangible thing – At least the Killer Part of it isn’t

It’s almost a construct. Siri isn’t powerful for what it is. It’s powerful for what it speaks to. The message it gives – New! Only With Us! Human! Special! Magical! Your Willing Assistant! Makes You Feel Better! Makes Your Life Simpler!

You could take ANY decent, attractive feature and if you polish it a bit, package it right, and message it right - you have a Killer Feature. This is what Amazon needs to understand. A Killer Feature isn’t always born, sometimes it’s made. Sometimes it’s made out of thin air and emotions and the human touch.

What Killer Features could Amazon add to Kindle Fire HD 2 to make it ‘The Chosen Tablet’ for Holiday 2013

Well, first let’s set some ground rules -

1. It must appeal to 50% or more of the Target Market. It can’t be a Killer Feature if it’s a Killer for just 10% or 20% of the target market.
2. It must have a human and emotional connection. It can’t be impersonal or non-emotional.
3. Real People should clearly understand how it benefits them. Basically, you want to show what the feature does for the user and how it feels to use it. Show the ‘friendship’/'human connection’ the feature creates with the user. This, in turn, creates a simple rule – It must be real people focused. Real People Focused – Light on an eReader. Tech Focused – NFC chip. Real People Focused – Easier payments for people in shops.
4. It must be something your competitors can’t recreate. This is really hard to put into words. You’re telling a story. Make sure the narrative is something your competitors can’t steal or duplicate.
5. It must have enough value or uniqueness or newness in itself to stand up to scrutiny. It doesn’t have to be a Killer Feature in value delivered. However, it absolutely must be a Killer Feature in narrative and positioning and dream selling.

With those ground rules in mind, here are some possible Kindle Fire HD 2 Killer Features -

1. Color eInk or IGZO LCD screens. A screen technology new enough to create a distinct edge.
2. A Book or Movie Subscription Service that’s very comprehensive. We mean something big. Perhaps a deal with the Big 5 Publishers for a paid monthly Netflix type subscription. Perhaps a deal with the top movie studios to have new releases available instantly.
3. Folding Tablet. Super convenient 4″ device when not reading. Opens up to 8″ when you’re using it.
4. Voice Driven Interface. Make Kindle Fire HD 2 such that you can operate it completely via voice commands (with touch also available).
5. Gesture Recognition + Eye Tracking. Put in a tiny Kinect clone and let users do crazy things like turning a page in front of the screen to turn pages.
6. The 3D projection screen technology that’s rumored to be arriving in a Kindle Phone 3D. An actual projecting screen would be absolute gold for selling Kindle Fire HD 2.
7. 3D screen (same technology as 3D TVs, without requiring glasses). This is a bit risky because 3D TVs haven’t really taken off and customers still consider 3D a bit of a gimmick.
8. Unbreakable Kindle Fire HD 2 Screen. If a mix of flexible screen technology and frame/casing improvements can deliver this, it would be a huge competitive advantage. Note: Samsung has already promised this in phones for 2013. Samsung might deliver it for Tablets by early 2014.
9. What else? What would be a Killer Feature for Kindle Fire HD 2?

All of this becomes critical because Kindle Fire HD might have just 1 or 2 years left to make a dent.

Killer Features might be the only way for Kindle Fire HD to survive in the Tablet Market

Consider the things Kindle Fire HD 2 and Amazon will have to work against -

1. Emotional Lock-in. There are hundreds of millions of people locked into the Apple and Samsung and Android ecosystems/brands.
2. Actual Lock-in. People in ecosystems have bought apps and movies and more. They can’t just walk away from that. Well, they can but they don’t want to.
3. Larger App Stores. Apple has a very large, very high quality app store. Android has a very large app store that is slowly picking up in terms of quality (although it’s still way behind Apple).
4. Large Traffic Streams and/or Customer Bases. Apple has hundreds of millions of people on iPods and iPhones and iPads. It has hundreds of millions of credit cards. Google has a billion people on Search.
5. Time and Experience. Apple and Samsung have a lot more experience with hardware and software.

The longer the race goes on, the harder it gets for Amazon to win with Kindle Fire HD. Why? Because more and more people get locked into one of the Big 2 Mobile Ecosystems (Apple, Android). Because the customer attachment and relationship becomes deeper.

The two most powerful ways to break the Apple+Android dominance would be -

1. Reinvent phones and tablets. Do to Apple and Android what Apple did to Blackberry and Nokia and Motorola.
2. Create a brand new category of device that makes Tablets and/or Phones redundant. If netbooks can disappear in a few years, then so can Tablets.

These two are easier said than done. If we’re talking about the most realistic path forward, Amazon only has one choice – create/invent/make/add/conjure up really, really strong Killer Features for Kindle Fire HD. Release a phone or a tablet with 2 or 3 Big Important Killer Features and you can carve out enough market share to start building something big. A 3rd mobile ecosystem that can win double digit market share.

Quick Aside: eInk Kindles would be great to create a 3rd Ecosystem

Amazon ignoring eInk Kindles is a bad, bad idea. It could really go after the book and notebook and paper markets and sell 100 million eInk Kindles. It could then do what Apple did – slowly release more products for these loyal users, slowly build up the ecosystem. Amazon should really rethink its lack of focus on eInk Kindles and Readers. This is a $25 to $35 billion a year market (eReaders, Books, Publishers). Perhaps larger. There’s very little competition. Perhaps most importantly, it allows Amazon to create its own iPod and iTunes. To create a hundred million users attached to Amazon devices – all in an Amazon ecosystem.

This was a clear path to success for Amazon. Amazon messed it up by not realizing the real opportunity. It didn’t help that Amazon built two separate App Stores – one for eInk Kindles and one for Kindle Tablets. That same Amazon vulnerability - reinventing the wheel needlessly.

Back to Kindle Fire HD 2 and Killer Features

Amazon needs to get to 100 million devices sold which share the same ecosystem and the same book store and the same app store and the same OS.

Since it has separated eInk Kindles and Kindle Tablets, and since it is reluctant to devote real resources on the eInk Kindles (why focus on a market that has little competition, and where you have the lead, when you could fight for the #3 spot in Tablets), Amazon only has one option.

Succeed wildly with Kindle Fire HD 2 and Kindle Fire HD 3.

Fundamentally, Kindle Fire HD 2 needs Killer Features to succeed. Kindle Fire HD 2 needs Killer Features for there to be a Kindle Fire HD 4. If Amazon doesn’t hit it out of the ballpark with Kindle Fire HD 2, it almost certainly means the end of Kindle Fire and Amazon’s ambitions in the Tablet Space.

Please Note: This is not an endorsement. I’m just mentioning something interesting. I don’t know whether the case actually is ergonomic or not and I’ve never used it. I also have no relationship with the people making the Wingo. Just looks like something Kindle owners would be interested in.

They aim to collect $55,000. They already have $17,619 collected and still have a massive 29 days to go.

What’s interesting is that they are trying to make an Ergonomic Kindle Case -

1. Wingo has a Scientific Ergonomic Design that looks to me to be better than existing Kindle cases by a lot. They have medical stuff on their website.
2. Protects the Kindle.
3. Could potentially prevent Carpal Tunnel Syndrime.
4. Versatile design to accommodate multiple reading positions.
5. Existing Kindle, Nook, iPad users were consulted – including those suffering from arthritis and other hand ailments.
6. It looks cool.
7. They have a LOT of design details and information on the Wingo website and on the Ergonomic Kindle Case Kickstarter Page.

There are 90 or so spots left for the $38 Early Bird price.

Do I think an Ergonomic Kindle Case is a good idea?

Yes, very much so.

I use an ergonomic keyboard (Microsoft’s), and it pretty much saved my wrists and hands.

A lot of Kindle owners read a lot. Often for hours at a stretch. Often in awkward positions. It makes sense to get a case that is very ergonomic and keeps your hands and wrists healthy. Even if the ergonomic part is overstated, it should still be more comfortable than existing cases.

Things to be aware of -

1. Kickstarter is not a ‘If I pay then I get it’ type thing. It’s like funding a startup. You might get it and help create something cool. Or you might just lose $38 forever.
2. The Wingo case is going to be made of high quality materials – ABS Plastics, flexible rubber housing, etc. No, no aluminium.
3. They’ll try to manufacture it in the US.

Why do they need crowdfunding?

In order to partner with a high quality manufacturer in the U.S. our first order must exceed a minimum number of units for them to take on our project. A manufacturing facility must go through an intricate series of changes to establish a process to produce a product, especially a product like Wingo Case, which is surprisingly complex (from hollow-core internal structures all the way to soft-finishing the exterior).

I think the figure they are going for is really interesting. $55,000 is really small. If they publicize this properly they could easily get $1 million or more. However, no idea if they have any marketing budget and/or a PR firm working with them. I hope they pull it off. It would be good to get an ergonomic Kindle case.