Kindle Fire is the biggest threat to the Kindle, Nook Tablet/HD is the biggest threat to the Nook

The Kindle Fire and the Nook HD are the biggest threats to the Kindle and the Nook.

First, let’s understand what dedicated eReaders are up against.

The Perception War eReaders have had to Fight

Dedicated eReaders have always had to fight a lot of ‘perceptions’ and ‘prejudices’. Basically, 2007 to 2012 has been an all-out ‘Perception War’.

  1. No one reads any more. It’s a $25 billion a year business in the US (or at least was in 2007) and yet people seem to believe this nonsense.
  2. Readers will not buy a device dedicated to reading. Again, this is beyond ridiculous. For some reason it’s OK for people in every other passion/interest to buy specialized equipment and devices – However, readers are supposed to not buy a device dedicated to reading.
  3. eInk is not better than LCD. Again, we have LCD-compatibles and they exist in a world where they think of LCD-incompatibles much as we think of werewolves and vampires. Surely, they don’t really exist. How could there be someone who wants to read a book in black and white?
  4. If a device can do more than just read, then it’s the best choice for reading. This is one of the funniest arguments. A reader wants to get ‘the best reading device’ and his non-reader friend says – Why not get something that you can do more than just read on? Why do you care if the reading experience isn’t as good?
  5. Readers don’t want to let go of the touch and smell of books. Apparently, from the number of eReaders being sold, they are getting over it.

However, that wasn’t all. Reality wasn’t kind to eReaders either.

The Reality of what eReaders had to Face

In addition to the Perception War, eReaders had to fight some harsh realities –

  1. LCD screens were far, far advanced in their evolution. eInk had (and still has) a really, really difficult task in front of it.
  2. LCD Screens were evolving faster than eInk.
  3. The companies making eReaders (with the exception of Sony) had zero prior hardware experience.
  4. Getting people to spend $399 or $299 and then having to pay again for books.
  5. Users were used to books and bookstores. eBooks was very new and scary.
  6. Publishers were very reluctant to let ebooks grow.
  7. Tablets were evolving much faster than eReaders. The Tablet reading experience (thanks to things like retina displays) was coming closer to the eInk reading experience in overall satisfaction.

It’s a miracle that we are seeing 10 million or so eReaders being sold every year. We started off with forecasts of ‘40,000 Kindles sold and then it dies’. Now, with 10 million Kindles and Nooks and eReaders being sold every year, it’s again time to consider the mortality of eReaders.

Amazon and B&N are more focused on Tablets than eReaders

Somewhere along the way Amazon and B&N realized a few things –

  1. Tablets can evolve much faster than eReaders because the main ingredient (the screen) is evolving much faster.
  2. With Tablets they can sell users books and movies and music and eventually teddy bears and diapers and kitchen sinks.
  3. They can flip the Tablet encroachment (and they have). If this seems an exaggeration, consider that if it were not for Nook Color and Kindle Fire, Apple would not have released an iPad Mini and Google would not have released a Nexus 7. Nook Color and Kindle Fire created and cemented the 7″ Tablet Market.
  4. With Tablets they can reach casual readers who were choosing Tablets over eReaders.
  5. With Tablets they don’t have to wait another 25 years to get color eInk and sell movies.

It’s actually a very smart move by both companies to shift to Tablets. They are now selling to dedicated readers and casual readers. They are now selling books and movies. They are increasing their customer base.

This might be a great decision for Amazon and B&N but it’s very damaging for eReaders.

Amazon & B&N would rather sell Tablets to Readers than Dedicated eReaders

Imagine you’re B&N or Amazon. You have two options.

Option 1: Sell a reader a dedicated eReader. Then make money from ebooks sold. Also, watch while the reader buys an iPad and spends money on movies and music at Apple.

Option 2: Sell the reader both Tablets and dedicated eReaders. Then make money from everything – books, movies, music, apps.

There’s another aspect to Option 2. You’re adding a permanent mini-Store. You can, down the line, sell the user anything you and the user want.

It’s a no-brainer. Selling Tablets in addition to eReaders. Eventually, preferring to sell Tablets over eReaders.

Without Amazon & B&N focused on eReaders they will gradually stop evolving (not that they’re doing a very good job at the moment)

2007 – The First Kindle.

2012 – A Kindle with a built-in light, a touchscreen, and more clarity.

None of that is really very impressive.

Notice everything that’s missing: Color eInk, Flexible Screens, Unbreakable Screens, Video Support, Games Support.

eReaders were already evolving at a snail’s pace. Now that Amazon and B&N are focused on Tablets, where will the fire for eReader improvements come from?

Sony? (Please stop laughing. It’s a serious question.)

So we will see Kindle Fires and Nook Tablets get better and better. We will also see Nook eReaders and Kindle eReaders stagnate. This makes the contrast even sharper. Soon we’ll have eReaders that are stuck in 2008 (2009 if you’re generous) while Tablets zoom into 2013 and 2014.

Is the Inflection Point Past Us?

There was the first inflection point – when Nook Color did well. At that point the Nook eReader suddenly became B&N’s #2 Priority.

There was the second inflection point – when Kindle Fire did well. At that point, the Kindle became Amazon’s #2 Priority.

Amazon and B&N suddenly went from

Worldview 1: eReaders are going to replace paper. We will be selling hundreds of millions of eReaders per year.


Worldview 2: eReaders are going to be a niche market. Tablets will eventually replace paper and PCs. We will be selling hundreds of millions of Tablets per year.

We don’t know if either worldview is accurate. However, that’s the shift that happened in B&N’s thinking and Amazon’s thinking.

B&N saw the Nook Color as its future. Amazon saw Kindle Fire as its future.

Have we passed the inflection point of the death of eReaders. I don’t think so.

However, there are three things we can agree on –

  1. The single biggest threat to the Kindle is the Kindle Fire.
  2. The single biggest threat to the Nook is the Nook HD.
  3. eReaders have Tablets blocking their growth path to hundreds of millions of devices sold per year.

From Amazon and B&N’s perspective this is fine. They are exchanging a ‘one digital revenue stream’ device with a ‘multiple digital revenue streams’ device. They are also effectively safeguarding themselves from a world where they are made obsolete when it comes to digital products. However, for anyone who wants ‘dedicated reading devices’ to keep improving, this is sad and unfortunate. We are not going to see very many big advances in eReaders. We might even see them become a niche product and slowly die out.

Why are eReaders no longer the flavor of the month?

The Kindle is rumored to have sold 8 million units in 2010. You’d think that would make every company on Earth want to manufacture eReaders. Strangely, if CES 2011 is any indicator, most companies seem to have given up on eReaders.

Decline of interest in making eReaders – CES 2010 vs CES 2011

Here’s a post reviewing the eReaders of CES 2010. Here are some of the eReaders shown off last January (with updates on their status in 2011 included) –

  1. Mirasol. Mirasol is the star eReader at CES 2011 – just as it was the star eReader at CES 2010. The first Mirasol device is rumored to be the PocketBook Mirasol and it’s set to debut in Q3, 2011. Note that Mirasol powered eReaders were supposed to launch in 2010 itself – so that Q3, 2011 date isn’t a given.
  2. BeBook with Liquavista Color Display. No mention of it now. 
  3. PixelQi. Notion Ink’s Adam tablet with Pixel Qi display is available – It’s a Tablet rather than an eReader. No other devices with Pixel Qi at CES 2011.
  4. Alex Reader. Arrived and was rather good – didn’t make much impact. 
  5. Entouradge Edge. Arrived and was good but very expensive. Didn’t have much impact.
  6. Copia. Released a social platform instead of an eReader.
  7. MSI Dual Screen eReader. No idea what happened to this.
  8. Cool-er. Bankrupt now.
  9. Bookeen Orizon. No idea what happened to this.
  10. Samsung E6 Reader. This is set to release in the US soon.
  11. Aiptek Story Book.
  12. Fujitsu. Still only in Japan.
  13. Skiff. Closed down.
  14. 20 other generic readers. Most didn’t arrive.
  15. Acer and Asus had plans for eReaders. Morphed into Tablet Plans. Acer does have one eReader+eWriter set to launch in summer of 2011.

CES 2010 was all about eReaders. More importantly, it was about new companies jumping into the eReader market.

Contrast that with CES 2011 –

  1. Hanvon’s color eReader which won’t be released in the US.
  2. The two CES 2010 stars – Mirasol and Pixel Qi.
  3. iRiver’s Story HD.
  4. A few more. Just a few.

From 40 to 50 new eReaders at CES 2010, we’ve gone down to 10 or so at CES 2011. We have almost no new companies trying to release eReaders. Tablets have replaced eReaders as the flavor of the month.

Why has there been such a sharp decline in interest in making eReaders?

For all intents and purposes eReaders are doing great –

  1. Amazon has definitely sold millions of eReaders. It might have sold as many as 8 million eReaders in 2010.
  2. B&N is selling half a million Nook Color reading tablets a month.
  3. B&N has sold millions of Nooks.
  4. Every eBook store and app is talking about ‘millions’ of sales and ‘millions’ of customers.
  5. eBooks are 10% of the market now.

You have to wonder why there were 50 companies jumping into eReaders in January 2010, when just ‘millions’ of eReaders had been sold, and now there are close to zero companies jumping in – even though 10 million or more ereaders have been sold.

Why is everyone shunning the eReader market?

Here are possible reasons –

  1. Companies believe Tablets will kill eReaders.
  2. Companies feel Tablets are a much bigger market than eReaders – that Tablets could become as big as laptops, while eReaders will always be a 10-15 million eReaders sold a year market.
  3. There are not that many companies excited about eReaders – They find tablets more interesting.
  4. With Tablets, companies see an opportunity to compete on price. iPad at $499 means a lot of opportunity for lower priced tablets.
  5. Companies feel Amazon has wrapped up the market. That there’s a small 10 million eReaders a year market, and Amazon has most of it.
  6. They feel the major markets are US and UK, and those are very difficult to get into. With Tablets they feel there is more of an international market.
  7. Companies don’t feel they can compete with the trifecta of Kindle, Kindle Store, and Free WhisperNet.
  8. Companies don’t want to deal with Publishers. Can’t really blame them.
  9. Companies get a free Operating System they can use with their tablets – the ‘optimized for Tablets’ Android Honeycomb. Even more of an opportunity to cut prices. Note that there is no version of Android optimized for eReaders.

Whatever the reason, it’s pretty clear that companies have moved on from eReaders, and are fully focused on tablets in 2011.

Comparative sizes of eReader and Tablet markets

Apple supposedly sold 10 to 12 million Tablets in 2010. There weren’t really any other Tablets in the market.

Sales of 10 million or so iPads in 2010 might mean a lot of different things –

  1. That Apple got most of the market, and the actual market is 15 million Tablets sold a year.
  2. That Apple could barely produce enough to meet demand (as is claimed), and the actual market is 30 million tablets a year.
  3. 10 million iPads sold is just the tip of the iceberg, and the Tablet market is actually 100 million tablets a year.

Companies jumping into the Tablet market seem to believe one of the latter two possibilities.

In the eReader market, Amazon supposedly sold 5 to 8 million Kindles. B&N and Sony sold a million or more eReaders each. B&N sold a million reading tablets. Other eReader makers probably sold 1 or 2 million eReaders.

What might ’10 million eReaders sold in 2010′ mean?

  1. That the eReader market is already stable, and will stay at around 10 million eReaders sold per year.
  2. That the eReader market jumped from 4 million eReaders sold in 2009, to 10 million eReaders sold in 2010. That it will continue to boom, and will reach 20 to 30 million eReaders sold per year before it stabilizes.
  3. That 2010 eReader sales are just the tip of the iceberg, and that the eventual market will be one hundred million eReaders sold per year.

Most companies seem to believe the first possibility. Perhaps they believe 2. but feel they have no chance.

So, for some indecipherable reason, every company dabbling in eReaders has either assumed that eReaders will stop growing, or it has assumed that Amazon and B&N are unbeatable.

That seems rather defeatist.

It makes very little sense – In a year when every eReader company is claiming record sales, all other companies are running away from the eReader market, instead of towards it.

Dedicated eReaders vs Tablets, musings about specialization

There’s an almost constant stream of criticism directed at Kindle, Nook, and other dedicated reading devices. Underlying the criticism is the belief that any device which focuses on one task must be inherently inefficient.

The Kindle is assumed to have survived only because of its low price.

Just you wait – As soon as my darling Tablet gets reduced in price to $300 all the eReaders shall die out.

It’s quite strange.

Why is there such hate against devices that specialize in one task?

The same people who would only want a highly trained surgeon to operate on them, who would refuse to let a cook design their house, who wouldn’t board a plane piloted by a circus clown – are upset that a device is built to specialize in one thing.

How ridiculous that a device would do just one thing, and do that exceptionally well. It should instead do 5,000 things in an unexceptional manner.

It’s almost as if they want to find the device equivalent of the TV. Instead of people going out into the real world, and doing things they love, let them stay in and find artificial sustenance in their TVs. No matter what your interest – There’s a channel for that.

Instead of people buying specialized devices, that greatly increase their enjoyment of their favorite pursuits, let them all use one device which isn’t specialized for anything. Let’s take away the entire concept of specialized devices made solely for people who are very passionate about one particular activity. You don’t really require a device that’s perfect for your favorite activity – There’s an app for that.

3 devices that specialize in what they do

Bought a $99 PSP Go. Have no idea why. Perhaps because it was half price and came with $80 worth of games.

Bought a Kodak Zi8 – for taking videos of eReader screens.

Combine those two with the Kindle, and suddenly I’ve angered every Tablet worshipper in the world. According to the Tablet-Cult the iPhone or the iPad 2 with dual cameras should take care of all these things. It saves me from the infinite pain of owning three devices which each specialize, horror of horrors, in just one thing.

Except, you have to wonder – Do we want to minimize total number of devices, or do we want to maximize the joy our devices give us?

Has convenience become more important than quality of experience? Has being able to carry just one device become more important than the amount of pleasure we get from our devices?

  1. The Kodak Zi8 has a macro mode that’s invaluable for shooting close-ups of eInk screens. It’s also a great mini-camcorder. Do we really have to take low-quality video just so that we can tell people how few devices we carry?
  2. The PSP Go has some amazing games on it. 15 minutes of God of War is worth more than 5 hours of Angry Birds. Not to mention you get 4 hours and 45 minutes as a bonus. Do we have to give up on physical buttons and high quality games because carrying around an extra device might kill us?
  3. The Kindle is just a lot better for reading. If you aren’t LCD-compatible, and/or aren’t a member of the Tablet-Cult, you’ll get a lot more pleasure from reading on a device dedicated to reading. A device that is built just for people like you. Do we have to give up the only devices built for readers because there’s a golden rule that says you can never carry more than one device?

The whole argument is best illustrated by two games that deal with Vengeance.

Two types of Vengeance

The iPhone and iPad have Angry Birds. Here’s the back-story –

Green Pigs stole some eggs. Some flightless birds were, understandably, very attached to the eggs, and decided to wreak havoc on the green pigs by throwing themselves out of catapults. A tale of unbridled Vengeance.

There are various plot twists such as Green Pigs escaping using hot air balloons and the Pigs tricking the Birds by using cardboard cut-outs of eggs. It makes the most of poetic license without doing anything poetic.

The PS3 and PSP have God of War. Here’s the God of War back-story (courtesy Wikipedia) –

Kratos is a warrior serving the Greek Gods of Olympus. He used to serve Ares, the God of War, but Ares tried to make Kratos the ultimate warrior (free of earthly bonds) by tricking him into burning down a village in which Kratos’ wife and child had been placed. Kratos is overcome by what he has done. Then Athena tells him that if he murders Ares he’ll be forgiven for the murder of his family.

Kratos, through the course of the various God of War games, fights the Gods, allies with the Titans, fights the Titans, and goes through most of Greek mythology.

God of War isn’t a one-off. Another PSP game is Dante’s Inferno. It’s based on Dante Alighieri’s Divine Comedy, and follows Dante through the nine circles of Hell.

We are supposed to throw away Greek Mythology and the Classics, and beautiful games built on those.

Why? So that we can instead embrace an inferior gaming experience? 

Stories about birds taking vengeance on pigs, and games revolving around feeding candy to pet monsters.

Catering to Lovers Vs Catering to Dilettantes

It’s the same story every time.

  1. We have the person who has a superficial knowledge of, and a cursory interest in, an art/area like photography or writing or reading or games.
  2. We have the other person who loves that art/area irrationally. Who’s spent countless hours mastering it and realizing the infinite beauty of it. Who’s understood the impossibility of ever knowing even 5% of all there is to know.
  3. The first person is bemused that the second person is buying a device that is built just for that one art/area.

It’s fine. 

A person who reads 10 minutes a week is free to think that a Tablet is the best device ever invented for reading. A person who plays games to kill the time is free to think Angry Birds is the best game ever made. A person who shoots 3 videos a year is entitled to his opinion that the iPhone has destroyed the camera and camcorder market, and that Cisco is crazy for buying Flip Inc.

However, where these three people make a mistake is that they assume that their cursory interest in an area makes them an expert. It is precisely their ignorance of the skill/art/area, which makes them feel so strongly that no specialized device is required. It’s knowing 0.01% of what there is to know which grants them the ability to assume they know 99% – not to mention their unshakeable belief that a specialized device is a mistake. 

Dedicated eReaders are going to be fine as long as people love reading

Dedicated eReaders are going to do well for the same reason Reading Tablets are going to do decently well – People who love to read want a device built for them.

Readers are amongst the smartest people. They have also never had devices built just for them. Dedicated eReaders and dedicated reading tablets are a special gift. Assuming that readers will turn their backs on dedicated reading devices is like assuming people who love photography will turn their backs on SLR cameras and lenses and Leicas and tripods and DSLRs.

If a critic doesn’t understand the irrational love felt by someone who is truly dedicated to a pursuit – then it’s easy to pretend it means nothing. To rationalize it away. However, that rationalization is only in the critic’s head. Reality is created by the person feeling the irrational love and acting on it.

A quote that says it best

Take this quote by Desiderius Erasmus –

“When I get a little money I buy books; and if any is left I buy food and clothes”

If you find a person who doesn’t really read, and let him read this quote – to him, it will sound like a joke. At some level, he can’t understand the feeling captured by the quote. He can’t even imagine it. For him it’s an impossibility for anyone to value books more than clothes or food. In fact, he can’t even imagine people valuing books much.

Dedicated readers are made for the exact opposite kind of person. One who knows exactly what it feels like to value books more than food and clothes. One who has had at least a few times when she/he picked books over eating and sleeping and other meaningless things. 

There isn’t really a battle between dedicated eReaders and tablets. The battle is in the heads of people who don’t have a love of reading. For them, these strange inexplicable things exist, and do nothing except make reading better – which is such a terrible waste of a device. So, in their infinite kindness and infinite wisdom, they are trying their best to save us readers from what we love.