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.

Death and destruction amongst eReaders and eReader companies

While the Kindle and the Nook Color continue to do well, there are lots of problems in eReader Land –

  1. Smaller eReader makers are dying out.
  2. Both Amazon and B&N are getting hammered by Wall Street for their investment in eReaders. B&N more so than Amazon.
  3. Apple seems ready to cut off the oxygen supply to eReader apps on the iPlatform.

Let’s take a quick look at each of these.

Kno and Alex are dying

Kno eReader is being phased out and the company is going to focus on making software. It’s a bit ridiculous – that a company making a dual screen tablet is considering selling off its hardware business and moving to making software for other people’s tablets. What a capitulation.

All Things D has a report on No-Kno –

Sources said Kno execs have recently decided that the quicker-than-expected uptake in tablet production by a multitude of powerful device makers had made its efforts to package a seamless offering less critical.

Instead, the company will focus on its robust software and services to offer students on the Apple iPad, …

BoomTown could not determine which two companies Kno was in serious discussions with about unloading its hardware business …

Made its efforts to package a seamless offering less critical?

They ought to be honest – They got destroyed in the Tablet market.

Almost in parallel, the Alex eReader is being phased out. It’s not clear whether the ‘phase-out’ is to introduce a new model or whether Alex is about to join Kno in the Beautiful eReader Graveyard.

B&N stock gets punished for B&N’s focus on the future, i.e. eReaders

Amazon’s stock got hammered after its last earnings release – Wall Street didn’t like Amazon’s focus on the future, i.e. eReaders. The same happened with Barnes and Noble today. Thanks to Roger Knights for the link to Bloomberg’s article on B&N and eReaders.

It’s some sort of joke where Wall Street isn’t willing to look beyond the next 6 months.

Barnes & Noble Inc., the largest U.S. bookstore chain, declined as much as 15 percent after suspending its dividend to conserve cash and invest in electronic books

What alternative does B&N have – Should it forget about ebooks and eReaders and go bankrupt like Borders?

You should be handing B&N a prize. What other company can compete with a giant like Amazon, survive a huge transition in its business, and come up with decent products that speed the democratization of Publishing.

B&N has the best Android tablet released so far. It has it for $249. It has around 20% of the market in both eReaders and eBooks – a larger share than it had in physical books. It should be getting an award for Most Adaptable Company of 2010.

Instead the stock is down 15% as Wall Street worries about its annual bonuses.

The problem is that for both Amazon and B&N this negativity from Wall Street has consequences. Amazon and B&N have to plan out 10 to 40 years into the future but they are hobbled by the geckos of Wall Street and the geckos’ focus on the next 6 months.

The threat of Platforms reneging on their (implicit) promises

So B&N and Amazon made a smart calculation –

  1. If we make eReader apps we reach all these casual readers.

It seems to have worked because, supposedly, 40% of ebook sales on iPad are via Kindle for iPad, and another 20% are via Nook for iPad.

However, B&N and Amazon either disregarded or didn’t realize two other things –

  1. A not insignificant portion of people who wanted a reading device got an iPad because they could get a choice of stores and/or they could get their favored provider (Amazon or B&N) on the iPad. Those were lost Kindle sales and lost Nook sales. It might be just 5% or 10% of iPad sales – but it was sales that Amazon and B&N lost thanks to their own iPad apps.
  2. Apple controls the platform. It can kick out Amazon and B&N any time. It can impose a tax and take all the profits for itself anytime. Now, its trending in that direction.

Basically, Amazon and B&N ought to realize now, if they haven’t already, that they are strengthening the enemy. For two companies that are forward-thinking for the most part, this was an amazingly short-sighted move.

Every platform is the same – a risky gamble. Perhaps not the Web and not the PC. However, Android, Mac, iPhone, iPad, and other platforms are just a gamble.

Not only is the grand ‘reading apps for every platform’ strategy a long-term impossibility, it’s strengthening the enemy.

What happens when the 10,000 hours rule kicks in with eReaders

The Kindle has been in the market for around 3 years and 3 months. It was in development for around 3 to 4 years before that.

Sony Reader has been in the market for nearly 4 years. Perhaps there was 2 years of development before that.

Nook has been in the market for 1 year and 3 months. It was in development for around a year before that.

We’ve seen eReaders evolve and improve over that time period. However, you have to wonder how close we are to a truly glorious eReader. An eReader that is timeless.

Let’s consider two questions that might help us figure out how long we have to wait before the superstar eReaders arrive –

  1. Does the 10,000 hour rule apply to products people make (in that same way that it, perhaps, applies to skills people learn)? 
  2. When would eReaders hit the 10 years/10,000 hours mark?

And after that we’ll wonder –

  1. What happens when eReaders hit the 10,000 hour rule?

Let’s start by jumping into the 10,000 hours rule and our assumption that such a thing as the 10,000 hour rule exists.

10 Years/10,000 Hours = Mastery

A concept brought up in numerous books like Talent is Overrated and Outliers is that it takes a certain amount of ‘deliberate practice’ to attain mastery in a skill.

These books talk about the process of mastering a skill as something very distinct from randomly doing something for fun.

  1. They claim Mastery requires deliberate practice. Deliberate Practice is a special type of practice that involves a very conscious, almost painful, focus on improving/learning.
  2. They also claim it usually takes 10,000 hours of deliberate practice to master a skill. For some areas it takes 20,000 or more hours.
  3. Additionally, they claim that this 10,000 hours of deliberate practice is usually spread out over a period of 10 years.

If we make a giant assumption that such a 10,000 hours rule exists, we have to ask ourselves what happens when a person has attained mastery. One possible answer is that the person starts working on her/his masterpieces.

How long does it take an ‘expert’ to make a masterpiece?

We have an expert. She has spent 10,000 hours over a period of 8 to 10 years and attained mastery in her craft. Now she sets off to create her masterpiece.

How long would it take her?

That’s a good question, and one assumption we could make, one that seems awfully convenient, is that it would take her another 10,000 hours of ‘deliberate application’ of her skills to create her masterpiece.

Let’s run with the assumption because, well, it is rather convenient. Plus it’s better to overshoot the figure than undershoot it.

It’s better to assume a 10 year period than a 2 year period

Let’s take eReaders. If we say that truly skilled people can create a masterpiece in just 2 years we would have the Nook 1, the Sony Reader, and the Kindle all labeled masterpieces. While they’re all good, it’s doubtful that any of them represent an eReader masterpiece.

If, on the other hand, we assume a 10 year period, we can hope that in around 2013 the best Kindle ever made will arrive. That in 2013 Sony too will exceed itself. That the best Nook ever will arrive in 2015.

What happens then?

What happens when eReaders get 10,000 hours of deliberate application?

We haven’t really gotten close to where we could be with eReaders.

Kindle – 6 to 7 years. Sony Reader – 6 years. Nook – 2 years.

Yet, already, we have around 10 million eReaders sold. We have eBooks at 10% or so of the US Book Market. We have the beginning of the democratization of Publishing and the rise of indie authors. We have a fall in book prices.

What happens when eReaders get their full 10 years and become true masterpieces?

Everything accelerates – the quality of eReaders, the adoption of eReaders, the spread of eBooks, everything.

Perhaps these are the main improvements we’ll see by 2013/2014 (when at least Kindle and Sony Reader have hit their 10 years) –

  1. Prices around $50. 
  2. Color support.
  3. eReaders you can also use as eWriters. 
  4. Unbreakable eReaders.
  5. Flexible eReaders.
  6. Availability of 90% of books that are published.
  7. eReaders that can be folded out into screen sizes that are larger than their carrying sizes. 

It’s hard to say what features we’ll see over the next 3 to 4 years. Text to Speech wasn’t really a feature many people anticipated. Neither was the free-hand drawing that Sony Reader added in its second generation eReaders. Hopefully, there will be lots of good surprises.

We are still in the beginning stages

Perhaps the biggest takeaway from this ‘eReaders still have to hit 10,000 hours’ post is that we’re still only 50% or 60% into making good eReaders. By 2013/2014 we’ll get our first superstar eReaders. The real masterpieces.

By then lots of other things will have improved too – resources for authors, publishing, platforms, services, software.

It’s going to be a very different world and it’ll be interesting to see how the people who are predicting 25% market share for ebooks by 2015 handle the new reality.