Kindle & Kindle Paperwhite under pressure from Kobo & Kobo Aura

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

Well, not so fast.

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

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

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

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

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

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

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

Does this really put pressure on Amazon and Kindle?


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

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

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

This does a few things -

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

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

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

What could make Kobo even more dangerous?

Buying Nook Media. That’s what.

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

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

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

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

It’s very unlikely.

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

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

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

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

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

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

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

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

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

Why did Nook Touch pull ahead of Kindle?

On May 24th, this was my assessment of Kindle vs Nook 2 -

With Nook 2, B&N has left the Kindle behind and temporarily won the Kindle vs Nook contest.

With a Nook 2 now in hand, that feeling is confirmed. Consumer Reports has also handed Nook 2 its Editors Choice award.

Have a pretty major Kindle vs Nook vs Kobo mega-review lined up. However, the early findings from that research only add to the raison d’etre for this post, i.e.

Pointing out that Amazon’s complacency is becoming a major drawback. Nook Touch pulled ahead of Kindle primarily because Amazon has become very complacent.

This is going to manifest in other ways. Consumer Reports listing Nook Touch as their #1 choice is a very big warning sign for Amazon to wake up and get both a Kindle 4 and a Kindle Tablet out. And more importantly – to realize that it hasn’t already won the eReader and eBook Wars.

Is Amazon really getting complacent?

If you consider individual areas in isolation it doesn’t seem that way. However, combine all the data points and it paints a pattern -

  1. Amazon didn’t really react to Sony Reader Touch Edition (the newer version that used IR for touch and didn’t mess up readability). Whereas Sony messed up pricing and gave Amazon a breather, B&N was aggressive on pricing and stole the #1 eReader crown from Kindle. Basically, Amazon has known for 6+ months that a touch based eReader could beat it, but it hasn’t reacted.
  2. Amazon hasn’t been aggressive with technological improvements in eReader screen technology. It could have pushed eInk and Qualcomm and Pixel Qi to develop screens faster – As far as we know, it hasn’t.
  3. Amazon hasn’t done much since Kindle 3 came out. Kindle 3 totally destroyed the competition – But what have we had since then? Sponsored Screensavers? A Promise of Library Book Lending? Pretend Lending? None of these are game changers (the promise isn’t a gamechanger – regardless of how important the feature itself is).
  4. Amazon has let the Kindle 2 and the Kindle DX 2 be ignored. Why aren’t all the software improvements in Kindle 3 added to these devices yet? It’s over a year since Kindle 3 came out.
  5. Amazon has assumed that its ‘devotion to reading’ means it can get careless in other areas.
  6. Amazon hasn’t responded to the colossal threat of the Nook Color.
  7. Amazon has become complacent with the Kindle App Store. It was in Beta in January 2011 and it’s in Beta in June 2012.
  8. Amazon is trying to find shortcuts – Building an Amazon Android App Store is potentially a good one; Depending on Apple for casual readers is potentially a bad one. Shortcuts don’t really work in the long-term.
  9. It had, at some level, assumed that B&N would just die and disappear. It didn’t plan for the contingency that B&N would find hidden reserves of strength.
  10. It had, at some level, assumed the fight was over. It had also assumed that the fight wouldn’t morph into something else (for example, Reading Tablets vs eReaders). Basically, Amazon was 100% unprepared for the Nook Color.
  11. It’s acting with the belief that incremental improvement by itself (without major leaps forward) is enough.
  12. Amazon is cutting ties with affiliates in various states even though B&N and Google are both making a major affiliate push. This is going to become critical down the line because websites will start sending people to Google to buy books (instead of to Amazon).

While there is still a lot that Amazon is doing right, it is making a lot of mistakes. All of the mistakes stem from the same thing – The complacency engendered by a feeling that the battle was won once Kindle 3 was released.

Amazon, quite frankly, expected/hoped Kindle 3 would be a death blow for B&N and Sony and would end the eReader Wars. It didn’t because Nook Color saved B&N and gave B&N the belief to launch Nook 2.

Why would you slow down when you’re ahead?

Amazon had the Kindle 3, it had all the momentum, and it had a fledgling Kindle App Store that it could have potentially turned into the sort of advantage that made the iPhone a monster and made Facebook the defining social network.

Instead, it’s done little in the last 1 year. It makes no sense – All it had to do is push hard and hit $100 last Holiday Season and release a Kindle Tablet last holiday season and release a Kindle 4 in February 2011. It would have extended its lead and pretty much wiped out B&N.

Now it’s created a monster – A B&N that is hardened from the pains of near-bankruptcy and battle-tested from its experience of surviving as the fringe #2/#3 eReader maker. Kobo too is turning into a little Godzilla with its ridiculous ability to keep up with billion dollar companies.

How could Kobo come this close to Kindle?

At this early stage of my experience with Kobo Touch and Nook Touch, there’s a very simple question I couldn’t answer -

Is Kindle at least better than one of them?

That’s a scary thought. Both Nook and Kobo have pulled so close to the Kindle that you can’t tell in 15 to 20 minutes which is the best eReader. That means – Everyone making the Kindle vs Nook vs Kobo purchase decision will be confused.

How can the clear #1 eReader company let the #2 company beat it? How can it let the #4 company pull so close?

When Publishers brought out the Agency Model and killed Amazon’s ability to compete on book prices – It should have focused on every other area and won all those battles. It hasn’t and we’re beginning to see the consequences.

Where is the Kindle Book Deals section?

Kobo hands out coupons like its Groupon. B&N has a clear section for Bargain Books. Amazon has done only two things – run a Sunshine Deals promotion in June and run a short-lived Kindle Deal of the Day promotion in January.

That’s just not enough. If Publishers have taken away your ability to cut prices, then at least build up a deals section and compensate to an extent.

Incremental Improvement cannot beat Leaps in Technology and Thinking

You could joke that the only reason Kindle doesn’t have touch yet is that there was no incremental way to get to a touch screen from the Kindle 3. Except – it probably is the real reason Amazon never added in touch.

You improve every area of the Kindle 10% and it adds up to a big gain. The problem is that there’s a competitor who improved its device’s user interface 100% by replacing a kooky eInk-LCD dual screen design with a simple touch eInk screen. It then improved its battery life 100%. Add up a few big jumps like these and 10% incremental improvements can’t compete.

At some point Amazon needs to add huge jumps. Things like Color and Touch and full-blown features – as opposed to 15% better this and 20% better that.

How difficult is it to make Custom Screensavers?

The two biggest pain points for Kindle owners (apart from the really big stuff) have been Folders and Custom Screensavers. Amazon took 2 years to add Folders and still hasn’t added custom screensavers.

Even Kobo Touch beats the Kindle’s Dead Authors Society by using the book cover as the screensaver.

How many more warning signs does Amazon need?

Here are a few -

  1. August/September 2010 – Sony releases the IR touch powered new Sony Reader.
  2. December 2010 – Nook Color comes out and creates the Reading Tablet market. Selling nearly a million units a month.
  3. January 2011 – Both B&N and Kobo start talking about 1 million+ customers and 1 million+ books sold in a day.
  4. Early 2011 – Apple does its whole ‘pay us 30%’ dance.
  5. June 2011 – Consumer Reports gives Nook Touch its Editor’s Choice Award.
  6. June 2011 – Kobo, a small start-up, releases a touchscreen eReader before Amazon.
  7. June 2011 – In 2 months Nook App Store is up to 254 apps.

The warning signs are coming up faster and faster. Whatever room for complacency Amazon earned with the release of the Kindle 3 – it disappeared long ago (in 2010 itself). Now Amazon is just surviving on momentum. It’s probably got 6 months left to turn things around. If Nook Color 2 is as impressive as Nook Color (and as much of a jump), and if iPad 3 launches in October, then Kindle Tablet won’t have the ‘guaranteed hit’ Christmas Season Amazon is probably counting on.

Most interesting is what Kindle vs Nook will look like for the rest of 2011. Firstly, it’s now Kindle vs Nook vs Kobo – which should be very worrying for Amazon. Secondly, Amazon is no longer a clear 1st choice – It isn’t even the 1st choice. If Amazon doesn’t have a Kindle 4 lined up for second half of 2011 then $99 might be its only savior.

Is Apple about to kick out Kindle App and Nook App?

The Kindle has had a strong ally in the Kindle iPad/iPhone reading app.

In fact, some estimates and surveys claim that 40% of books bought for the iPad are through the Kindle for iPad app.

Well, Apple might be getting tired of that.

Sony’s iPhone eBook App gets rejected

Courtesy Peter Craine at the official Kindle forum we find out that Sony’s iPhone app just got rejected -

Tuesday’s New York Times reports, “The company [Apple] has told some applications developers, including Sony, that they can no longer sell content, like e-books, within their apps, or let customers have access to purchases they have made outside the App Store.

“Apple rejected Sony’s iPhone application, which would have let people buy and read e-books bought from the Sony Reader Store…

Wow. That’s a really big move by Apple.

Details on Apple’s new Rules

The New York Times has the details on Apple’s new approach to eBook Apps.

  1. It seems that ebooks bought outside the app store will not be allowed into apps. 
  2. Sony’s iPhone App has definitely been rejected.
  3. Apple has said that all in-app purchases will have to go through Apple.
  4. NY Times points out that Amazon might get affected.
  5. Analysts think this shift suggests Apple wants to make more money from its platform.

    “This sudden shift perhaps tells you something about Apple’s understanding of the value of its platform,” said James L. McQuivey, a consumer electronics analyst at Forrester Research.

    “Apple started making money with devices. Maybe the new thing that everyone recognizes is the unit of economic value is the platform, not the device.”

This is nothing short of a disaster for Amazon and B&N. Both are seeing very healthy ebook sales through their reading apps. A large portion of that is sales through iPhones and iPads. If those disappear, or begin to get taxed, it would be really tough for B&N and Amazon to profit from ebooks sold to iOwners.

Why would Apple do this now?

Three possibilities spring to mind -

  1. Apple was only allowing these ebook reading apps to sell iPads. Now it feels iPad is powerful enough to stand on its own. 
  2. Apple is getting serious about iBooks and wants to turn it into a solid revenue stream. It probably feels that iBooks can’t take off until Kindle and Nook apps are handicapped.
  3. Apple really does intend for iPad 2 to be more of an eReader/Reading Tablet. It wants to make sure that reading apps from other companies can’t piggyback on iPad 2.

Whatever the reason for Apple’s new stance, it’s a rude awakening for Amazon and B&N. A painful lesson that if you don’t control the device, you can get kicked out at a moment’s notice.

What could Amazon and B&N do?

Perhaps they could offer Apple a 10% cut. Perhaps they could put more energy into Reading Tablets – B&N is already doing this with Nook Color. Perhaps they could stir up readers, and get them to protest – though that is unlikely to work.

There’s not very much Amazon or B&N can do. They are at the mercy of Apple.

If Apple really does force Kindle and Nook Reading Apps to pay a toll, it’ll prove, once again, that there is no such thing as a free lunch. That you have to build your own direct channels to customers.

The Book Wars have well and truly begun.

Wondering about B&N’s strategy, especially Nook Color, Nook Study, and Nook Kids

The Kindle might have won the first few eReader Wars (War for Book Readers in 2009, War for Book Readers in 2010) – However, a few recent observations have been making me wonder whether B&N has a more effective long-term strategy.

A strategy it has been forced into because of Kindle’s excellent success in books.

Is the Nook Color built specifically for Children’s Books?

If you look at the retail box of the Nook Color, you notice something rather interesting about the Nook Color displayed on it -

  1. There are 3 books displayed in the top row (on the screen of the Nook Color on the box). 
  2. The second row on the screen has 2 magazines and 1 newspaper.
  3. The third row is 3 children’s books.

That, in a way, signifies the focus of Nook Color – Books, Children’s Books, Magazines, and Newspapers. Or, to view it in terms of target demographics - readers, parents, magazine readers, and newspaper readers.

Nook Color is undoubtedly better for parents and magazine readers. It represents a big shift from Kindle and Nook, which were both great for books/readers and terrible for everything/everyone else.

Nook Kids highlights B&N’s focus on parents and children

It’s not just that B&N has built Nook Color with a view to capture the children’s eReader market. It’s also released an iPad app specifically aimed at children. It’s called Nook Kids and there are already 100 books available for it – all of the read-along and picture-book variety.

If you go to B&N’s NookKids section on its website, there are books for various age groups – Up to 2 years, 3 to 5 years, 6 to 8 years, 9 to 12 years. The books include classics like Curious George and Thomas the Fire Engine. There are both picture books and read to me books.

Perhaps most interesting is a section called ‘Mom Favorites’. B&N is clearly targeting parents.

Nook Color is the #1 eReader for parents

If you’re a parent, there’s little doubt what you’ll pick – either Nook Color, or Nook Kids for iPad.

B&N might be behind Kindle in books. However, in Children’s books it’s far, far ahead. Not only does it have an iPad app tailored for kids, its reading tablet, the Nook color, caters to parents and children as one of the main target demographics.

And all those kids will grow up with fond memories of Nook Color, and with their books locked into B&N’s special format.

Getting tired of writing this – If Amazon doesn’t release a Kindle Tablet soon, it’ll be in a lot of trouble.

B&N is going after the textbook market too

B&N has Nook Kids and Nook Color to go after parents. It also has Nook Study to go after the textbook market and students.

Nook Study = B&N going after another demographic Kindle has ignored

Amazon did do university trials with the Kindle DX. However, the DX wasn’t really built for students – note-taking was horrible, there were very few features built for students, there were no page numbers, there was no color or touch.

Nook Color is much closer to the type of textbook eReader students would want – although with a screen that’s too small. However, it isn’t Nook Color that B&N is using to go after students – It’s Nook Study.

The Nook Study hard-sell

Got an email from B&N about Nook Study, and here’s what they’re advertising -

  1. The 132 free textbooks from Kaplan.
  2. Save up to 60% on eTextbooks.
  3. Nook Study for PC and for Mac. Features advertised include – ability to take and share notes, search, customize highlights.
  4. Free $5 gift card if you rent a textbook by January 21st.
  5. Save 90% on used textbooks, and 30% on new textbooks.

Visit the site and more things hit you -

  1. B&N is offering eTextbooks free for 7 days.
  2. It’s offering access to 1 million free books.
  3. It’s offering a College Kick-Start Kit.

The software itself is pretty well done. In fact, it’s downright impressive. Nook Study is a very decent option for eTextbooks – All that’s needed is an iPad app and a 10″ Nook Color and B&N will suddenly be in prime position in the War for Students.

637 B&N College Bookstores

B&N has a great channel to advertise Nook Study, sell the Nook Color, and (in the future) sell the 10″ Nook Color- its 637 college bookstores.

Which means that all it has to have is a textbook Reader and a textbook reading app that are as good as the competition – From there its retail channels will give it the win.

B&N is better placed than Amazon in Children’s Books, and might be better placed than Amazon in Textbooks

Let’s consider three separate wars that are part of the larger eReaders Wars -

  1. The War for Readers and Books – Amazon is clearly the leader here.
  2. The War for Parents and Children’s Books – Nook Color and Nook Kids give B&N a lead here. In fact, Amazon isn’t even trying much in this area.
  3. The War for Students and Textbooks – Amazon tried to sell a general eReader to students. B&N is selling a reading app, and has 637 college bookstores. They’re about even. Whichever company is the first one to release a reasonably priced textbook reader, one that’s built from the ground up as a textbook reader, is likely to win.

These are 3 of the most important wars making up the greater eReader Wars. We have others like the War for Magazine Readers and the War for Newspaper Readers. However, these three are amongst the pivotal ones.

That does leave a fourth war and a fifth war – the War to replace Paper with an eReader+eWriter, the War for the Enterprise. Amazon and B&N are not fighting those wars at the moment. There might be others.

For the 5 huge wars that make up the core of the eReader Wars -

  1. Amazon has almost fully won one (books).
  2. B&N is set to win one (children’s books).
  3. There’s a third (textbooks) that’s just starting off.
  4. There’s a fourth (eReader+eWriter) which neither company seems inclined to fight.
  5. The fifth war (Enterprise) is still far off.

If you consider the huge importance of getting children and students on to your platform – the War for Parents and the War for Students might end up being far more important than the War for Readers.

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.


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