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.

Kindle vs Nook 2011

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

Please Note: This Kindle vs Nook review will be updated when the Nook 2 actually ships and I get my hands on it.

There are basically two Kindle vs Nook comparisons now -

  1. Kindle 3 vs Nook 1 in the Dedicated eReader with 3G category. Kindle 3 wins this easily. Please check my Kindle vs Nook Review for a Kindle 3 vs Nook 1 comparison.
  2. Kindle WiFi vs Nook 2 in the $139 Dedicated eReader category. Nook 2 easily beats Kindle WiFi here. This post looks at Kindle WiFi vs Nook 2.

Kindle vs Nook in 2011 – Areas Nook Clearly Wins

  1. Value for Money – For the same $139 price, you get nearly all the features of the Kindle WiFi plus a touch screen.
  2. Touchscreen – While Sony made a hash of how it used touchscreen in an eReader, B&N has focused on making things simple. It seems to have worked.
  3. Compactness – Nook 2 is just 6.5″ by 5″ by 0.47″ which makes it small enough to fit in your pocket. Kindle WiFi is 7.5″ x 4.8″ x 0.335″ which makes it less compact (it’ll fit a jacket pocket but not a pant pocket).
  4. Better Battery Life – Battery life for Nook 2 is supposedly two months with WiFi off. Kindle WiFi has 1 month battery life with WiFi off. B&N uses the criteria of half an hour of reading per day - not sure what criteria Amazon uses. Note: With wireless on, both have the same battery life of 3 weeks.
  5. Memory Expansion – Memory Card Slot that takes up to 32 GB memory cards.
  6. Smoothness & Less Flashing - Screen flashing happens only every 5th or 6th page when turning pages. If the screen flash bothers you then this is a definite plus. B&N also claims smoother page turns. Note: This might be all software and Amazon might be able to match this quite quickly.
  7. Faster Page Turns – Waiting to see how it is in person. It sounds very promising.
  8. Library Book Support - Amazon has promised to add this later in 2011. For now, B&N’s Nook 2 has a clear advantage as it supports library books.
  9. Personalized Screensavers – A nice personalization touch.

Kindle vs Nook – Areas Nook is slightly ahead

  1. Weight – Nook 2 at 7.48 ounces is slightly lighter than Kindle WiFi at 8.5 ounces.
  2. In-Store Extras – Free WiFi and some special offers when you go to B&N Stores. You can also browse through books for free (for up to an hour per day per book). B&N staff to help answer questions.
  3. ePub support – Lets you read books bought at other stores that use ePub with Adobe DRM.
  4. Possibly Better PDF Support – The scrolling in PDFs is really quite good. Waiting to try it out in person and see what else is supported. This might end up being a big Nook 2 advantage.
  5. Social Aspect – Nook Friends in-built social network with ‘Liking’, recommendations, contact lists, and more. Kindle WiFi is limited to Facebook and Twitter updates.
  6. FastPage – Apparently this feature lets you hold down the page turn button and quickly get to anywhere in the book. Will have to test this – it sounds really good.
  7. Simplicity – The touchscreen makes things like highlighting easier on Nook 2. Never thought Nook would become simpler to use than Kindle.
  8. Cover View – Organize your books into shelves that show book covers, browse using cover view.

Kindle vs Nook – Areas Kindle WiFi & Nook 2 are in a tie

  1. Screen – eInk Pearl screen optimized for reading. 50% better screen contrast than previous generation eReaders (Kindle 2, Nook 1). Black/Graphite casing to further enrich contrast.
  2. WiFi – Both ship with WiFi connectivity. Both have free WiFi at AT&T hotspots.
  3. Focus on Reading – Both are dedicated reading devices (Thankfully).
  4. Font options – Kindle has 8 font sizes and 3 font types while Nook 2 has 7 font sizes and 6 font styles.
  5. Retail availability – Both are available at numerous retail chains including Best Buy, Target, and Wal-Mart.
  6. Price – Both are $139.
  7. Reading Apps – Reading Apps are available for both Kindle and Nook owners for a variety of platforms including iPad, iPhone, PC, and Mac.
  8. Accessories – Kindle has a lot more accessory choices but Nook has some pretty interesting options like Nook Totes.
  9. Easy to Hold – B&N touts its contoured back but the Kindle WiFi’s back is easy to hold too.

Kindle vs Nook – Areas Kindle is slightly ahead

  1. Software Dependability – Both Nook 1 and Nook Color have suffered massively from glitches. Until Nook 2 is in readers’ hands and working well (without lots of bugs) the Kindle is a safer bet.
  2. AdKindle Option - You can get AdKindle for $25 less. It’s a version of Kindle WiFi with sponsored screensavers and an ad on the Home Page. 
  3. Landscape Mode – Kindle WiFi offers reading in landscape mode which is very useful for web browsing and for PDFs.
  4. Physical Keyboard – While it increases the size, it also makes it easier to type notes.
  5. Looks – While Kindle WiFi looks sharp and svelte the Nook 2 looks a little boxy and chunky.
  6. WhisperNet – Kindle comes with lots of Cloud based services like seeing popular highlights for a book you’re reading and accessing your notes and highlights online. B&N has begun to catch up and has promised a MyNook portal.
  7. Amazon.com Site – Easier to navigate and use than B&N’s website.

Kindle vs Nook – Areas Kindle is clearly better

  1. Kindle has Text to Speech. While some Publishers disable this feature it’s still present in 40% to 60% of books. Plus you get text to speech for all documents and public domain books you add yourself. 
  2. Web Browser. A big feature especially as the browser is relatively decent.
  3. Book Range and Prices. Kindle Store has more books available. For books other than Agency Model books (which are the same price everywhere) Kindle Store tends to have slightly better prices. Note: B&N counts Google’s free public domain books and claims it has more books – That’s patently false as public domain books are available for Kindle too (Google Books PDFs work, as do Internet Archive’s 1.8 million free texts).
  4. Kindle App Store – You now have 70+ Kindle Apps for Kindle WiFi. Nook 2 does not have apps (they are only available on Nook Color).
  5. Kindle WiFi comes with 4 GB of memory of which approximately 3 GB is available to the Kindle owner. Nook 2 only has 2 GB memory of which only 1 GB is available to the Nook owner.
  6. Customer Service – Amazon really puts effort into providing great customer service.

Overall Conclusion – Kindle vs Nook goes to …

Nook 2.

  1. Nook 2 wins several key areas – value for money, touch screen, compactness, battery life, memory expansion, less flashing, faster page turning, personalized screensavers, and library book support.
  2. Nook also edges Kindle slightly in the following areas – weight, in-store extras, ePub support, possibly better PDF support, simplicity, Nook Friends social network, and Cover View.
  3. Kindle edges Nook 2 slightly in some areas – software dependability (might turn into a big advantage), cheaper AdKindle option, physical keyboard, landscape mode, looks, WhisperNet, and website.
  4. Kindle clearly wins some key areas – Text to Speech, web browser, Range and Price of books, Apps, more in-built memory, and customer service.

Nook 2′s touch screen, its compactness, its library book support, and its faster and smoother page turns are probably the four key differentiators. Amazon has to find a way to match or counter these. It has promised library book support but it only means something when it arrives.

Engadget has a Nook 2 video and some photos that very clearly show the Nook 2′s strengths.

Unless Amazon drops the price of the Kindle WiFi by $39, and adds some big software improvements, B&N is going to increase its market share in eReaders significantly. Nook 2 is the clear winner in the Kindle vs Nook comparison.

Kindle vs Nook 2 starts this week

This week, the Kindle finally gets a worthy competitor (we can hope, as it will push Amazon to lower prices and add features). The Kindle vs Nook 2 comparison/contest will hopefully revive the eReader landscape – which has been as boring as Two and a Half Men sans Mr. Tiger Blood.

Some rough predictions:

Monday, May 23rd: Amazon strengthens up its defences against Nook 2

Amazon makes 2-3 moves to reinforce the Kindle’s charms to current and prospective Kindle owners.

Probably more free book offers than usual. Perhaps a date for when Library Lending will arrive. Amazon will wait until it knows the details of Nook 2 before launching a full attack – However, if information leaks out today, it might move early.

Tuesday, May 24th: B&N finally reveals Nook 2.

Haven’t been this excited since Dairy Queen introduced a new flavor (or was it Baskin Robbins).

  1. Features most likely to be part of Nook 2 – $150 price, improved lending, eInk Pearl screen with optimizations to make the screen contrast slightly better than Kindle 3′s screen contrast, touch using IR technology (the way it’s done in the new Sony Readers), text to speech (50% chance it makes its way in).
  2. Features most likely to be part of Nook 2 WiFi – $125 price.
  3. Slight possibility – B&N forsakes 3G totally and introduces only a WiFi model.
  4. 5% possibility – B&N blows Kindle 3 out of the water by introducing a Qualcomm Mirasol powered color eInk eReader.
  5. The most interesting possibility to me is B&N introducing a Nook for Kids. That would totally derail Amazon’s push into schools. It’s not inconceivable that B&N will release both a $150 Nook 2 and a $100 Nook for Kids. After Nook Color, it would be foolish to underestimate B&N’s capacity to surprise.

How will Amazon respond?

Amazon will probably make at least 2 big announcements on the 24th to deflect some of the attention away from Nook 2. If the 5% possibility turns out to be true (Nook 2 has a color eInk screen) then look out for some falling Kindle prices. If Nook 2 comes in at $150, or seems to offer more value for money than Kindle, then Amazon will probably do a $25 Kindle price-cut or offer a $25 gift card with the Kindle.

It’s unlikely that Amazon would have an answer for Nook for Kids.

Amazon probably has a clear-cut strategy and execution plan for responding to Nook 2 -

  1. A few features it has implemented but not introduced. It will definitely announce a few new features this week.
  2. The date for library book support and perhaps even a date for ePub support.
  3. A few new WhisperNet related services.
  4. Perhaps expansion of the Kindle App Store internationally and the introduction of free Internet browsing for all Kindle owners (not just those in the US). These two are especially likely if B&N does an international launch for Nook 2.
  5. A few special offers on bestsellers and perhaps even a few Living Social deals.
  6. Perhaps a subscription plan.
  7. Perhaps a Kindle+Prime subscription deal.

Amazon will probably announce 2 or 3 big things immediately if it feels Nook 2 is a real threat. If not, it might save them up to hand out over the course of the summer.

Wednesday & Thursday (May 25th and 26th) – Spy vs Spy

Time for B&N and Amazon to decide how they will fight the Kindle vs Nook 2 battle. To fathom out each other’s strategies and attack.

B&N will probably do a repeat of its ‘announce a month or two before release’ strategy with Nook 2. That gives Amazon ample time to respond. If it feels it’s been left behind technologically, it might prepone the Kindle 4 release to end of this year (from February 2012).

The real advantage B&N can get with Nook 2 is hardware/technology. In particular a touch screen and/or a new screen technology. While Amazon can match software improvements easily it will be stuck if B&N introduces one or more clear hardware advantages.

B&N might make some other moves – stronger tie-up with Google, a partnership with Apple, expansion of book lending. None of them would be game changers though. It’s hard to think of anything other than hardware improvements that could have huge impact – perhaps a subscription plan B&N introduces in partnership with Publishers.

Could B&N pull off something in the software space? Software is hardly its area of expertise – but you never know. Hardware wasn’t its area of expertise either and it managed to produce the best non-iPad tablet.

Rest of May 2011 – The Kindle vs Nook 2 battle is decided (in effect)

How strongly Amazon responds to Nook 2 will be a clear indicator of whether it sees Nook as an after-ran in the eReader market or whether Nook really has captured 23% to 25% of the eReader market (DigiTimes mentioned this figure).

If Amazon does not have a Kindle 4 slated for launch in October or November 2011, and there’s a high probability it doesn’t (since it’s probably waiting to release a color eInk based Kindle in Feb 2012), then we will see it respond to Nook 2 very, very agressively.

If B&N introduces a Nook for Kids then Amazon is likely to struggle mightily to respond. It’s ignored the student eReader market (school and college) and B&N might wrap up a large portion of that market even before Amazon can release something built for students.

2011 is going to be a great year to be an eReader owner – current or prospective.

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