What's going to happen with eReaders and eBooks in 2011?

It’s interesting how, due to the lack of any truly significant happenings in January and February 2011, trivial things like publicly shared notes and despotic platform rules are taking center stage.

Here are some of the things we’re likely to see in 2011 –

  1. The first color screen eReaders.
  2. The first $100 eReaders from the Big 3 eReader companies.
  3. A new price point to replace $9.99. The Death of the Agency Model.
  4. Kindle 4.
  5. Kindle Tablet.
  6. Nook 2.
  7. Nook Color 2.
  8. iPad 2.
  9. Kindle DX 3.
  10. Sony Reader 666.
  11. A wave of eReaders and eWriters from Samsung, Acer, Asus.
  12. The “Invasion of the ‘iPad and eReader killing’ Android Tablets”. Android Tablets are like super-slow zombies. They started off from the town center in early 2010 – aiming to surround your farmhouse and eat you up. It’s early 2011 and they’re still a few miles away. Meanwhile, your neighbour is having a heart-attack because in just one or two more years they’ll arrive.

This post will cover all of these, starting with the least interesting.

Android Tablets and their perceived threat to eReaders

We don’t really have anything impressive other than Nook Color. B&N wasn’t even trying to make an Android tablet, and yet, Nook Color is better than all the other Android tablets. That either says a lot about B&N’s ability to deliver compelling products, or it says a lot about the other Android Tablet makers’ lack of ability to deliver products.

There are a few problems with the whole concept that Android Tablets are going to threaten eReaders –

  1. There aren’t customers of good intent so there isn’t money. That means there will not be many developers making great apps because there’s little financial incentive to make great apps for the Android App Store.
  2. Amazon’s Android App Store is a bit of a pipe dream. Can Amazon pull together the best 10% apps in the Android App ecosystem? Yes. Can it turn customers of bad intent into customers of good intent? No.
  3. If the iPad couldn’t kill eReaders, and we can say this with some amount of confidence since everyone and their cat thinks millions of Kindles and millions of Nook Colors were sold in 2010, then do we really think something like the Xoom or the Dell Streak could threaten eReaders? Actually, the Dell Streak has been discontinued. Perhaps the Press should start writing about how ‘eReaders will kill Android Tablets’.

The whole problem with Android is that it’s based on free and caters to free-loving people and companies.

Google built it to defend Search. Google gives it away for free. Google gives away free services. Google encourages free apps. All Android is, is a big moat to protect search. Everyone seems oblivious to this truth.

It’s not going to be able to transform into something other than a free OS that lives and dies by free. It calls out to people who love open and free, and they make it even more open and more free. Everyone in the ecosystem is in love with free – to the point that developers make apps for free. You can’t change the culture of the ecosystem.

It might destroy profits of other ecosystems – to a point. However, it can’t generate a ton of profits. Its only aim is to protect Google’s Search cash cow and it’s doing a decent job of that.

Samsung, Acer, and Asus releasing eReaders

Their heart’s not really in it. You can tell from how they keep hemming and hawing about what to release and when to release.

It’s like the project you get which people think could turn out to be big, but you really dislike. So you don’t really do anything much and hope it disappears, and that everyone forgets about it.

For most of 2011 we are going to be talking about the big invasion of the Beasts of the East and all the amazing eReaders they will bring to market. Apart from Samsung no one is going to bring anything impressive to market. Asus has already morphed its eReader into a Tablet-like eWriter-Something. Acer cancelled its eReader, then un-cancelled it, and will probably re-cancel it.

Showing off an eReader at CES is the surest sign that a company is either not serious about bringing an eReader to market, or that the company is incapable of surviving in the market.

Sony Reader 666

There are a few things we can count on –

  1. Sony will make the best eReader. The best looking, the technologically most advanced eReader.
  2. It will forget that it’s meant for reading books. So no wireless downloads and no decent book store.
  3. It will pick the most ridiculous name possible. And an even more ridiculous price point.
  4. Sony will talk about its focus on non-US markets.
  5. Sony will refuse to add any infrastructure to support its eReaders.

Sony’s level of incompetence, when it comes to eReaders, is exemplified by Sony managing to be the first, and probably only, eReader App company to get rejected by the Apple Store.

Still holding out hope that someone at Sony figures out that the device is meant for readers and that book prices and features should reflect that. However, wouldn’t bet even 77 cents on it.

Kindle DX 3

Actually, this might be a bit unlikely. Amazon is giving Kindle DX 2 zero love, and it might just decide to do away with the bigger eReader and focus on the Kindle Tablet.

Perhaps Amazon will surprise us and bring a Kindle DX 3 to market that has all the latest features.

Color Screen eReaders

The price is going to scare everyone away. The same companies that have been showing off screens at CES for 2 years, without releasing anything, are promising that color eInk screen prices are going to be very low.

Yes, of course – They’ve shown just how dependable they are. There’s no way we’re going to believe them when they claim color eInk screens will cost about as much as black and white eInk screens.

If one of them manages to become the first screen technology maker, ever, to release a new screen technology at the same price as an older, mass-produced screen technology – then that company deserves all the sales it will get.

Color screen eReaders aren’t going to be very interesting this year unless they come in at under $200 – Even then they might not be very interesting if black and white screen eReaders drop to under $100.

iPad 2

This isn’t really very interesting.

Apart from the ‘this is going to destroy eReaders’ angle and the ‘this is the most marvellous technology ever’ angle. Steve Jobs probably thinks iPad 2 is the most amazing thing since the wheel – closely followed by the invention of the aeroplane and the steam engine.

After all, isn’t it marvellous that it will be as thin as a quarter, and as shiny as aluminum foil, and as ‘pure’ an experience as bathing in a waterfall in the Peruvian Andes.

After all the hype has settled the purists will argue whether its greatness stems from it being a larger iPod Touch or a smaller iPad. Perhaps it comes from the front and back facing cameras. It had been done before – but never like this. Apple showed everyone how to really put 2 cameras on a device. They even placed the cameras such that it minimizes the amount of eye movement required to look up at the camera. It is, after all, touches like this that make the difference between the ordinary and the aesthetically and experientially brilliant.

iPad 2. Apple revolutionizes computers – Again. A revolution that will not be surpassed until iPad 3 or iPhone 5 or iHeadphones 7 arrives.

Nook 2

Nook Color is so much better than Nook that Nook 2 is pretty much irrelevant. At some level B&N understands this – it might just release a Nook WiFi 2 and kill off the Nook line.

Nook 2 is not at all interesting. At best, it’s going to introduce one or two cool new features and highlight 5 to 6 Amazon weaknesses. At worst, it’s going to be instantly dated thanks to an Amazon Kindle software upgrade which adds ePub or library book support.

Kindle 4

Even Amazon would be hard-pressed to introduce more incremental improvements to the Kindle. Kindle 2 and Kindle 3 have added about as much as you could add to the Basic Kindle. What’s left? Glitter and Stickers?

There are probably not going to be any huge new technological advances in eInk in 2011 – with the exception of color eInk. That probably means Kindle 4 will not arrive this year. If it does, then a color eInk screen is the only thing that could save it from being the sequel that makes you wish it had never been made.

Amazon is likely to focus on a Kindle Tablet and on a sub $100 Kindle. A full-fledged Kindle 4 with color eInk and 1,000 incremental improvements will probably arrive only after February 2012.

Death of the Agency Model, and of $9.99

This is pretty important.

The huge landgrab in eReaders might be for naught if Publishers and non-Indie Authors don’t figure out a way to keep ebook prices high. It’d be the fates laughing at all the companies investing heavily in eReader technology.

Imagine how the companies would feel if there were just $1 and $3 books left by the time we went from 10% digital to 90% digital.

If we end up in a world with $50 eReaders and $1 ebooks the grand eReader Wars and the grander eBook Wars would be the most pointless wars ever fought (at least in the corporate realm).

It’ll be bittersweet to see $9.99 die a fast and painful death.

Kindle Tablet

This is easily one of the most exciting things to look forward to. There’s nothing quite like the Nook Color. It’s a new device that has created its own market – the Reading Tablet market.

Amazon’s answer, the Kindle Tablet, might focus on being a reading tablet aimed squarely at the Nook Color. If that happens we will have a great contest. The other possibility is that Amazon decides to squeeze Nook Color between its dedicated eReader, the Kindle, and its general purpose Tablet, the Kindle Tablet.

The latter would be a huge mistake but it seems likely that Amazon will make that mistake. It has to protect games and movies and it has to try and take over music – the scope of Amazon’s ambition means that it might ignore just how much of a threat a dedicated reading tablet like the Nook Color really is.

Nook Color 2

Can’t think of a way B&N could improve on the Nook Color. It does need a good app store desperately. However, in nearly every other way it exceeds expectations. Unless B&N figures out a way to magically morph/switch between eInk and LCD there isn’t really much room for Nook Color 2 to improve on Nook Color 1.

What might make a huge difference is figuring out a way to cut the price even more. B&N could also attack the general tablet market – it already has the best Android Tablet without trying. It wouldn’t hurt to see what it could do if it really did focus on making a full-out tablet.

Nook Color 2 and Kindle Tablet are going to be the biggest eReader releases of 2011. Which is a strange thing to say given that they aren’t even pure eReaders.

The first $100 Big 3 eReader

B&N and Sony lost badly to the $139 Kindle WiFi in 2010. Both of them get a shot at redemption in 2011.

The first Big 3 eReader maker that makes a really good, really solid sub $100 eReader has a good shot at winning 2011. A few things would really help –

  1. Releasing in September or October to make sure you get all the features possible, and to ensure you don’t get preempted by a newer eReader.
  2. Going as far below $100 as possible.
  3. Adding on as much real and perceived value as possible – free books, wireless features, offers and promotions, coupons, a good book store, little games, and everything that would make people feel they won’t regret the sub-$100 eReader purchase.
  4. Reducing friction – make it look good, say all the right things (open, lending, easy, no-hassle), make it available everywhere, market it well.
  5. Attack competitor weaknesses. Good bookstore = Sony Reader is dead. ePub and Library Books = Competes well with Kindle. No Bugs = Competes well with Nook.

The sub-$100 eReader releases are going to be the most important eReader events of 2011. Each of the big three eReader companies is likely to release a sub-$100 eReader in 2011 – When the releases happen, and what the eReaders are like, will determine which company wins 2011.

Are we going to see any new eReader companies in 2011?

The Kindle, the Nook, and the Sony Reader are the Big 3 eReaders in the US.

It’s surprising that Amazon, B&N, and Sony are the only big companies selling eReaders in the US. For a market where the #1 eReader is supposedly selling 8 million units a year, there’s a surprising lack of competition.

Will that change in 2011? Are we going to see any new eReader companies enter the market?

Well, let’s list out the usual and unusual suspects, and see which, if any, are likely to release an eReader in the US in 2011.

Companies that might release an eReader in 2011

As it turns out, there are a surprisingly large number of companies that might enter the eReader market. Perhaps Amazon is right to hide Kindle sales figures.

Google – A Google eReader is inevitable

This is a company that’s buying its own fiber, bidding for wireless spectrum, building undersea cables, releasing its own phones, and releasing its own laptops. Any market that seems worth a shot seems to get an offering from Google.

Add on the fact that books are one of the few markets where Google has shown a very un-Google like focus – It’s digitized millions of books, been in and out of Court more than O.J., and launched both Google Books and Google eBooks. If a company like Google, that tends to kill off most product experiments in a few years, has stuck with books for this long, there’s a very high chance it’ll go all-out and build an eReader. 

It’s almost inevitable that Google releases its own eReader. At worst, it’ll get HTC or Sony to release an eReader for it. It might try to buy Sony’s eReader division – Perhaps it even attempts to buy Nook and Kobo.

A Google eReader is inevitable – We just don’t know whether it’s going to release one itself, have HTC release one for it, or buy the eReader divisions of one or more of Sony, B&N, and Kobo.

Apple – Steve Jobs might decide that he wants tens of millions of eReader sales a year

Killing off the Kindle, or at least slowing it down, is strategically very important for Apple.

Amazon causes problems – it got rid of DRM in mp3 files and forced Apple to match, it sells digital games and digital movies and books (direct competition with iTunes), and it’s even threatening to make its own Android Store and Tablet.

Steve Jobs might decide he wants to cut off the threat before it grows too big, and might release a dedicated reading device. It would probably be closer to Nook Color than to Kindle, but it would be a device dedicated to reading.

Of course, you could argue that an Apple iReader isn’t going to kill the Kindle. It might, however, slow it down.

Is the eReader market big enough for Microsoft?

If the threshold for Apple is tens of millions of units sold per year, for Microsoft its 50 million units sold per year.

It’s highly unlikely the eReader market will be big enough in 2011 to draw more than a few cursory glances from the biggest tech company in Seattle. It is worth noting that it has a lot of the elements in place already – its Research division has shown off ePaper, it  has a decent Cloud Computing offering, it has done some book digitization work, and it won’t have a problem with software.

This might be the company Amazon is most afraid of. You have to look at the ridiculous amounts invested into Xbox and Search – Would Amazon really want to take on a company that is willing to lose a billion or more dollars a year to win over a market? A company that is willing to keep losing billions of dollars year after year until it finally wins?

Qualcomm – Why does it have a 3-screen reading tablet patent?

Last year Qualcomm got a patent for a 3 screen device that contorts into various things – movie player, tablet, book reader. Combine that with the hottest ePaper technology, Mirasol color ePaper, and you have the makings of a very decent reading tablet.

The question is – Would Qualcomm prefer to sell Mirasol screens, or would it prefer to sell Mirasol screens and also its own eReader?

It is the largest fabless chip supplier in the world, has total assets of around $30 billion, and makes around $3 billion a year in profits (courtesy Wikipedia).

It’s also invested $2 billion into a Mirasol screen production facility, and claims to have won a major eReader client. If it decides to make an eReader of its own, it could definitely shake things up.

Samsung – Will Samsung bring its eReaders to the US?

Samsung is selling a pretty decent, albeit expensive, eReader in the UK and Europe. It also has another eReader in the works.

Will it bring one or both of these to the US?

Samsung had $117 billion in revenue in 2009, with $8.33 billion in profit. It isn’t exactly the type of company you want jumping into your market.

It’s already shown it isn’t scared of challenging a market leader by releasing the Samsung Galaxy Tab to take on the iPad. It’s sold over a million of those. Samsung’s also got the #1 spot in TVs, and the #2 spot in smartphones. It’s interesting how Samsung isn’t on anyone’s radar.

Hitachi – Is Hitachi’s ePaper ready for an eReader?

Hitachi is another company that is on no one’s radar. It makes TVs and camcorders and computer hard drives. What’s interesting is that it’s working on ePaper. Given its focus on electronics, it wouldn’t be a stretch to imagine that if it succeeds in its ePaper endeavors, it’ll move on to making eReaders.

Hitachi has $95 billion in assets, had revenue of around $96 billion in 2010, and profits of $1.145 billion (which is quite close to Amazon’s $902 million profit in 2009).

It’s shown solid intent by working on ePaper – While it’s unlikely it’ll be ready to release an eReader in 2011, it might eventually play a part in the eReader wars.

Toshiba Biblio Leaf Solar-powered eReader set to arrive in 2011

Toshiba was supposed to launch its solar-powered Biblio Lead eReader in Japan on Christmas. There’s a chance it makes it to the US in 2011 itself.

Toshiba had $19.7 billion in profits in 2010. That’s almost as much profit as total 2009 revenue for Google ($23.65 billion, $6.5 billion profit) and Amazon ($24.5 billion, $902 million profit).

If their eReaders are as good as their laptops, Toshiba will be a dangerous, dangerous competitor.

Fujitsu – Will the Fujitsu Color eReader make it to the US?

Fujitsu has released two generations of its FLEPia color eReader in Japan. Nothing in the US.

It’s quite likely that Fujitsu will make its way to the US. Its first generation color eReader was a large screen one for over $1,000 – However, you have to imagine it’s figured out how to cut costs, and it might be the first company to bring a reasonably priced color eReader to market.

Fujitsu is a pretty big company – $32 billion in assets, $46 billion in revenue, and $824 million in profits for 2009.

Sharp’s Galapagos Reading Tablet reaches US in 2011

Sharp has already released its Reading Tablet in Japan, and promises to bring it to the US soon. There’s a 5.5″ variant and a 10.8″ variant – both use LCD screens.

This list of Global Tech Companies with the Highest Revenue at Wikipedia is fascinating, and Sharp is at the 18th spot – right between Intel and Motorola. We’re talking about $34 billion in assets and $33.6 billion in revenue in 2010.

Sharp makes everything from TVs to smartphones – it’ll have a lot of experience to draw on as it fights in the eReader wars.

Asus should be releasing its eReaders in the US in 2011

Asus made a lot of noise at CES 2010, and then changed its plan of introducing two low-priced eReaders in early 2010. It finally started shipping the Asus DR900 eReader in December. Not sure when it gets to the US.

The Asus DR900 has a 9″ screen, and would end up being one of the few Kindle DX competitors. Asus also has a smaller eReader in its lineup.

Asus has been having a bit of a rough patch as the netbook market has stalled. However, it’s still a monster – $21.2 billion in revenue in 2009 and $520 million in profits. It’s also very good at cutting costs, and isn’t the type of company you want to be competing with very often.

Acer Lumiread set to arrive in 2011

Acer talked about its eReader plans in early 2010, then said it’s backing off, and now is saying it’ll be releasing the Acer Lumiread eReader soon. The Acer Lumiread has already reached the FCC – hopefully we’ll be seeing it in early 2011.

Acer itself is a solid company – $17.9 billion in revenue in 2009, with $384 million in profits. It’s also the second biggest notebook manufacturer in the world (unconfirmed).

Additionally, it stole the netbook market from Asus – So it has some experience of dethroning a market leader.

A lot more new eReader Possibilities than expected

Have to say it’s a little surprising to find out that so many tech giants, from all over the world, are looking to release their eReaders in the US in 2011.

We started with Google, Apple, and Microsoft – but they are all a bit unlikely to actually produce and release a dedicated eReader in 2011.

A lot of the remaining companies, however, are very solid bets. These are companies that already have eReaders in production, in most cases have an eReader out in another country, and are very likely to actually release eReaders in the US in 2011.

It’s a surprise that there are so many of them (at least 6 sure bets), and it’s a surprise that they have such rich pedigree.

eReaders are already a hot market – It doesn’t matter whether Amazon and B&N hide sales figures or not

If you look at the Wikipedia link above (Top Global Tech Companies by revenue), you realize something startling –

  1. Samsung, which is 1st on the list with $117 billion in 2009 revenue, is releasing an eReader in the US soon. Samsung’s E6 eReader is already out in Europe.
  2. Hitachi, which is 3rd on the list with $99 billion in 2009 revenue, has an ePaper product, and might have an eReader in the works. 
  3. Sony, which is 5th on the list with $79 billion in 2009 revenue, started the whole eReader fire. It’s continued to invest in eReaders.
  4. Toshiba, which is 6th on the list with $76 billion revenue in 2009, has its Toshiba Biblio eReader out in Japan. It’s promised to bring its eReader to the US soon.
  5. Fujitsu, which is 12th on the list with $46 billion in revenue in 2009, has had a color eReader out in Japan since 2008.
  6. Apple, which is 14th on the list with $42.9 billion in revenue (please note that its 2010 revenue is around $65 billion), already has the iPad out and is attacking the eReader market with it. There’s talk that the iPad 2 will focus on reading and will include a screen that minimizes glare.
  7. Sharp, which is 18th on the list with $33.6 billion in revenue in 2009, has a reading tablet out in Japan, and is bringing its reading tablet to the US in 2011. 
  8. Google, which is 23rd on the list with $22 billion in revenue in 2009 and $6.5 billion in profit, might be working on an eReader. It’s already jumped into ebooks.
  9. Asus, which is 24th on the list with $21 billion in revenue in 2009, has a large screen eReader arriving in Taiwan very soon. Asus delayed its US release after the iPad came out, but might bring its eReaders to the US in 2011.
  10. Acer, which is 25th on the list with $17.9 billion in revenue in 2009, has the Acer Lumiread eReader. It should be out in 2011.

7 out of the 25 highest revenue tech companies in the world already have eReaders. Only 1 of those is currently available in the US – the other 6 will almost certainly arrive in 2011.

Another 3 companies (Hitachi, Apple, Google) might jump in with an eReader or a reading tablet. Apple has been trying to pass off the iPad as an eReader all through 2010, and will probably paint the iPad 2 as an eReader all through 2011.

2010 was the Year of the eReader. 2011 might be the Year of the eReader Wars.

Not sure which competitor Amazon is fooling by not releasing sales numbers. You can bet it’s costing Samsung, Asus, and all the other companies on the list just a few thousand dollars to send recon workers into Foxconn, and get full details on how many Kindles and Nooks are being produced, shipped, and sold.