The importance of apps in general, and eReaders apps in particular

The Kindle has an app store. Nook color is going to get an app store soon. If Sony stays true to form the Sony Reader will get an app store in 2020.

At the moment there isn’t really very much going on. We don’t have any eReader app store like Apple’s iPhone app store i.e. an app store that has become as important as the device itself. We don’t have any eReader apps like Facebook apps i.e. apps that have millions and millions of users using them every single day.

However, eReader apps are going to be critically important. This post will go over some of the reasons why. You could also take a look at this excellent post by Kontra at CounterNotions – How Dogma begets Anti-App Myopia.

Let’s start by looking at things that apply to all apps, including eReader apps.

The Power of Apps

Here are a few things apps do –

  1. Let users pick the winners. The importance of this can’t be over-stressed. Users tell developers whether or not an app is worth focusing on. They tell every other developer whether an app is worth competing with.
  2. Let developers provide value straight to users. Instead of a company adding 10 features in their product, they can have developers offers thousands of features – then users pick what they want.
  3. Provide free features. There are costs for the platform. However, the features are all free. There are supposed to be hundreds of thousands of iPhone app developers – Could Apple ever hire that many people? Could it ever get the variety of apps it currently has if all these people worked within Apple and followed Apple rules?
  4. Natural Selection. The fittest survive – then they have to compete against stronger rivals, and the fittest from that contest survive. It isn’t who sucked up more to the manager or who said the right things in the team meetings.
  5. Create magic customization. Each niche, and in a way each single customer, gets its own set of features.

The list is very, very long.

Fundamentally, an app store means that anyone who wants to provide value to device owners, gets a fair chance. A fair chance that doesn’t cost the app store company anything. No health insurance costs. No salary. No office space. No pain of firing the person if the app doesn’t do well.

It’s very, very low risk and high reward.

Think of eReader Apps as Developers trying to figure out ways to provide value

There’s some resistance to apps because people translate it to mean ‘things other than reading’.

There are a few other ways to translate it – value related to reading, value when in transit, value in terms of convenience, value in terms of customization, etc.

Yes, there will be apps that take away from reading, and those are probably bad. There will, however, also be apps that add solid value.

Right now we have the first few stabs – developers are trying to figure out what Kindle owners want. With time things will get better.

Let’s take a brief detour and look at the concept of 1 company vs 100,000 developers.

Can 1 company compete with 100,000 app developers?

One of the most beautiful things about an app store is that you never know what you’re going to get and you know you’re going to get things that developers really, really want to build.

The first is important because you can’t predict success – You have to take quite a few shots and try out quite a few different approaches before things fall into place. With an app store all of this is being done for you for free.

The second is important because people put in 10 times more work when they’re doing things they really, really love. An app developer making the app of his dreams is 10 times more invested than someone doing something his manager told him has to be done. This shows up in lots of ways, and it’s the difference between a feature that customers absolutely love and a feature they feel is good.

Note the ‘free’ part. Apple has hundreds of thousands of developers working for free to make the iPhone better. That is really what it comes down to.

The ‘Take It or Leave It’ aspect of apps

Something that is never given enough credit is the fact that each and every app is optional.

It’s not a feature you have to live with. It doesn’t even come pre-installed on the Phone. You choose, of your own free will, whether you want it or not.

Think of apps as an array of switches –

  1. Each switch turns on some feature. That feature provides some function – which for you is either valuable, useless, or negative.
  2. Each switch is totally under your control. You decide which switches to turn on.
  3. Each switch has a fail-safe. You can turn off anything that you find is useless or negative. You can turn it back on again if you like.

You get your phone. Then you turn on whichever switches you want and you get a stream of value flowing in. Keep the streams you like, and turn off the streams you don’t.

Developers are simply providing these streams – You control the switch.

You get to construct whatever combination of value you want. You get to change it anytime. You get to turn it all off. You control everything.

eReader Apps as optional features

 Let’s say there are 5 features Suzie’s eReader is missing – 5 features she’d really like. Let’s assume she has the Nook Color.

  1. Suzie would like Netflix.
  2. She would like an email app. 
  3. Suzie also wants a knitting app – one that lets her store photos of her favorite patterns.
  4. She would also like a Radio App. 
  5. She would like an app that searches for free WiFi.

The twist is that this list is different for every Nook Color owner. Suzie’s husband Jack would like these 5 features – Sports Scores, Stock Quotes, Email, Scrabble, Family Photos.

What should B&N do?

It can’t code each and every feature. No matter what combination of features it picks large segments of users will get left out. It’s already lost out on people who wanted eInk and people who wanted Kindle Store access – It can’t very well keep losing out on customers.

Well, with the Nook App Store it’s letting developers code all these features. Consider the Radio App – Perhaps 1 million Nook Color owners want the app and the developer makes millions, perhaps 1,000 Nook Color owners want it and the app makes $3,000.

From B&N’s perspective – either case is fine. It’s not investing anything. Whether 1 million people get value from the app or 1,000 people get value from the app the bottom line is – B&N invested nothing. Nook Color owners got extra value. B&N sold more Nook Colors because of the app being available.

It’s the ultimate win-win situation with zero risk for B&N.

Each app is an optional feature. In some cases it’s an optional feature 25 people love, and in some cases it’s an optional feature 250,000 people love. In every case it’s an optional feature that improves the Nook Color’s appeal and its value proposition.

Same for the Kindle and Kindle Apps. These are just features and mini-features that are optional and add to the appeal.

By end 2011 we’ll know how eReader App Stores are doing

By the end of this year we’ll have –

  1. A Kindle App Store that is nearly 1 and a half years old.
  2. A Nook App Store that is nearly 9 months old.

These should be at least a few really good apps in each store. There should also be at least a few very innovative apps in each store.

We’ll have a very good idea of whether or not eReader apps prove to be as powerful and important as apps on other devices.

Analyzing Kindle vs Nook Color for developers and apps

The Kindle is supported by a fledgling Kindle App Store. There are 10 or so apps so far and they’re all games.

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

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

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

Kindle vs Nook Color – The opportunity for Apps

Pros and Cons of making Kindle Apps

Here are the reasons making Kindle Apps makes sense –

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

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

Here are some of the things to keep in mind –

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

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

Pros and Cons of developing apps for the Nook Color

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

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

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

Things to keep in mind –

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

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

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

The Crux

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

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

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

Kindle vs Nook Color – Which will get better Apps?

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

However, the motivations for developers are varied –

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

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

Reasons Kindle might get better apps

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

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

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

Reasons Nook Color might get better apps

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

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

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

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

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

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

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

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

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

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

'Only' 12% of developers 'very interested' in Kindle development

A survey by Appcelerator, a company that provides hosting and services for app developers, shows that only 12% of the developers surveyed showed high interest in developing apps for the Kindle.

At some level this should not be a surprise – there aren’t that many people interested in reading, only 3 to 5 million of them have eReaders, and there are lots of other platforms that are competing. It is, however, worth investigating the reasons the Kindle app platform appeals or does not appeal to developers.

Factors that combine to make the Kindle App Store less appealing

The low interest in the Kindle is perhaps due to its focus on reading, the strength of competing platforms, and limitations of the Kindle and of the Kindle App Store.

Strong Competing Platforms

Appcelerator talk about three tiers of App Platforms –

Leaders (iPhone, Android, and iPad).

Up & comers (Blackberry and Windows Phone).

Laggards (Symbian, Palm, Meego, and Kindle).

If you look at these tiers you can clearly see that the iPhone, Android, Windows Phone, and Blackberry platforms have the advantage of each having tens of millions of units in circulation. The iPad has all the buzz and the expectation that sales might reach tens of millions of units. It’s also very easy for developers to shift from iPhone to iPad development.

At some level it’s impressive to have the Kindle on the list (given that eReaders are just starting off).

Kindle isn’t designed for Apps + Restrictions of the Technology

It’s pretty clear that the Kindle is designed for reading – the eInk, the simple design, and the long battery life. That means it’s not a blank canvas ideally suited to apps like the iPhone is. In fact the only apps it seems suited to are those related to reading.  

There are also several restrictions, including some important ones –

  1. eInk takes a lot of time to refresh. 
  2. Animation and Video are ruled out.
  3. It’s in black and white. 
  4. There’s no touchscreen. 

The lack of support for animation rules out most games – That’s pretty significant considering the biggest selling category of apps in the iPhone App Store are games.

Restrictions of the App Store

The App Store comes with its own set of restrictions that add on to the physical limitations –

  1. No advertising. A good thing in my opinion – However, it rules out all the developers who build advertising fuelled apps.
  2. No generic readers.
  3. Bandwidth limit of 100 KB a month for users. It rules out apps like weather apps.
  4. Apps using more than 100 KB a month have to be subscription apps.

When you combine the limitations due to eInk and the limitations the App Store imposes you rule out a lot of apps (and some ways of monetizing apps).

The decision to keep out advertising is probably a very good one – However, there are lots of developers obsessed with advertising and they’ll definitely stay away.

Developers have to pay for bandwidth 

This is a pretty important restriction.

The first thing the 15 cents per MB download cost does is rule out (or make rather difficult) certain bandwidth intensive apps –

  1. Browsers. 
  2. Email Apps. 
  3. Photo and Document sharing.
  4. Social Networking Apps.
  5. Instant Messaging Apps.

The second thing it does is reduce the profit that could be made from other apps i.e.

  1. Twitter Apps. 
  2. Weather Apps.
  3. Stock Quote Apps. 

The bandwidth restriction will rule out a lot of good apps, especially email and communication apps.

There’s lots of uncertainty

Here are some of the things that are unknown –

  1. When the Kindle App Store will open. 
  2. How many people will buy apps.
  3. What types of apps they will buy.
  4. What priced apps will work.
  5. How many people will be offering free apps and which apps.
  6. How much competition there will be. 

It’s hard to plan when there are so many unknowns.

Not enough of a User Base

If we assume the number of Kindles in circulation is between 2 million and 5 million there might not be enough potential buyers for certain apps.

If you have 40 million smartphones using a platform then even an app that appeals to just 5% of users has 2 million potential buyers.

With the Kindle an app that appeals to just 5% of Kindle owners might have just 200,000 potential buyers. Throw in a few competitors and things get pretty sketchy.

With time this disadvantage ought to reduce – provided Kindles keep selling. At this point of time it’s a big concern.

The fact that it’s an eReader – Not knowing how interested people would be in Apps and Games

People are buying the Kindle to read books. No one knows if people will be interested in games and apps that are not related to reading.

What if only 20% of Kindle Owners actually buy apps that are not related to reading?

Then we’re talking about a potential audience size of hundreds of thousands of users – probably not enough to sustain many apps.

Books aren’t allowed

The apps that would make the most sense are books and reading apps – However, generic readers aren’t allowed which rules out books. It’s worth noting that one of the biggest categories in the iPhone App Store are Book Apps – all of those are automatically ruled out.

If Book Apps aren’t allowed on an eReader then the most natural fit is excluded.

Factors that make the Kindle an interesting platform

The list of factors in the previous section is pretty overwhelming – However, it has some big advantages which explains why 12% of developers are ‘very interested’ in developing Kindle Apps.

Kindles (and eReaders) are exploding

The number of Kindles and eReaders being sold is increasing rapidly (at least it has so far) and it’s not inconceivable that in a few years we have tens of millions of Kindles in circulation.

It’s a new market

There are lots of positives here –

  1. Users don’t have any apps at the moment.
  2. There will be much less competition than in established app markets. 
  3. There is no precedent in terms of what users expect. 
  4. If you do well and get a foothold then as the market grows your profits grow too.
  5. It’s easier to get visibility – You can experiment and try out a lot of different ideas without getting drowned out by 150,000 other apps.

There’s lots of opportunity and lots of freedom.

Users of Good Intent

We’re talking about people who pay $259 or more for their devices and $10 for books.

These are people who are likely to gladly pay money for apps that provide value. They won’t expect free apps supported by advertising (since there is no advertising). They won’t be expecting all apps to be $1. They also won’t be trying to steal apps and perhaps best of all there is no precedent of free.

Reading related Apps ought to do well

While there might not be tens of millions of owners there are a few million users and they share a few important qualities –

  1. They love to read.
  2. They are willing to pay for books.
  3. They have a lot of reading and books related needs.

Apps that could potentially be bestsellers are –  

  1. Apps that provide Reading Shelves.
  2. Review Apps.
  3. Recommendation Apps.
  4. Translation Apps.
  5. Thesaurus and Dictionary Apps. 

Any app related to reading will likely appeal to most Kindle owners.

It’s a challenge

Let’s be quite frank – It’s quite an exciting challenge to work against strong hardware and software limitations and still create a work of beauty.

It takes a lot of optimization – making the code work around eInk refreshes, making it work around the bandwidth limitations. It encourages simplicity and optimization and it’s going to result in developers creating some beautifully crafted apps.

Developers get paid

By excluding advertising, making the system closed, and excluding user information gathering the Kindle App Store keeps out some apps –

  1. Apps from people who believe in free and open (most of them). 
  2. Apps that use advertising to monetize and spoil the market for paid apps. 
  3. Apps that sell user information.

A lot of the people who were using free apps as a lure to get other things out of users are kept out as are the free/open believers. That means developers who create good apps can earn money for their apps and not get undercut. 

Development is easy (relatively)

The development is in Java. There’s a Kindle Simulator for PC, Mac, and Linux. There’s no charge for signing up.

The Beta is pretty straightforward and there’s good documentation and it’s relatively straightforward to develop apps.

There are just two devices to test on

Since there are just two product lines the Kindle App Store targets i.e. Kindle DX and Kindle, it’s relatively straightforward to test out apps.

Of course, it gets a little complicated if you think of it as US and International versions. Perhaps it’s safe to assume that the only changes are related to what wireless service is  used and testing for the International Kindle version takes care of the US version.

Another related benefit is that Amazon updates Kindle OS builds automatically which means nearly all devices are on the same build and there are just two configurations to test against at any given time.

12% developers being ‘very interested’ is a good sign

The Appcelerator article paints 12% as a very low number and lists the iPad’s 53% in comparison. However, we’re talking about a dedicated eReader with an eInk screen and an app store that isn’t even open yet.

With the iPad you have the success of the iPhone motivating developers and with Android you have all the openness and other things developers love (things that actually make it harder for them to make money). iPhone’s app platform and the other mobile phone app platforms have tens of millions of users and a lot going for them.

The Kindle App Store being just a little behind Palm and Symbian (16%, 14%) is really impressive given the Kindle is just starting off and that users will probably be focused on reading.

Within a few months we should see the Kindle App Store debut and we’ll gather a lot more about users’ intentions and what sorts of Apps they prefer. It’s certainly going to be interesting to find out what developers come up with, which apps users choose, and how much they pay for them.