There are an infinite number of very good authors and an even larger number of very good books

A large portion of my time in 2013 has been spent browsing through ebook stores and app stores and finding the good books & apps out of the endless lists.

A few similarities stand out –

  1. It’s shocking how bad the search engines and discovery engines are. Apple and Google and Amazon almost seem to be trying to make it hard to find ‘the next great read’ or ‘the next great app’. It’s particularly puzzling in the case of Google. They make their money from search. Surely, they could come up with an app search engine that at least pretends to work.
  2. There’s a race to zero. People keep getting upset when this is mentioned – that doesn’t change the fact that it’s happening. Apps are all free or $1 or $3. The only app companies making non-trivial amounts of money are ones that either sell a service or product OUTSIDE of the App Stores (think Netflix) or the ones that sell people purple cows and rainbow candies for $1 each (Candy Crush, Clash of Clans, Zynga, etc.). With books we are seeing more and more authors offer free books. Book prices are going down steadily. The stores are trying various things to prevent this, but the race to the bottom can’t be stopped. The stores are just delaying the inevitable – at which point all their investment into hardware and infrastructure is going to look like Genius. NOT!
  3. There’s an unlimited supply of both apps and books. There are millions of ebooks available and hundreds of thousands of apps available. Given that it takes at least a few minutes to try out a book sample or an app, you could literally spend your entire life trying out books and/or apps and never run out of choices. You wouldn’t even have to actually read a full book. Just a few minutes per book and you’d never run out of books. Authors are writing books and publishing them faster than anyone can read books.

However, there is one area in which ebook stores and app stores differ very, very widely –

  1. There are a very small number of really good apps. For any given users’ needs, out of the hundreds of thousands of apps available, only a few thousand would classify as ‘good’ and just a few hundred would classify as ‘very good’. In fact, if you wanted to be picky you could make a reasonable claim that there are just 5 to 25 very good apps in each app category. The rest are all basically worthless.
  2. There are a very, very, very large number of very good books. In each and every genre, there are hundreds of really good books. The problem is finding them.

Note: In some ways this is an unfair comparison. With books we have thousands of years of work, while with apps we have just 4-6 years of work on apps. The point remains – there are a very, very, very large number of readable books.

Why are there so many more ‘very good books’?

To write a good book you need just three ingredients –

  1. A life that provides enough experience and memories to write a good story. Let’s call this the ‘inspiration’ for the book.
  2. The ability to put the story down in words. Let’s call this the ‘writing skills’ part.
  3. A platform to publish your work.

If you consider that 73% of people want to write a book, and that perhaps 5% to 10% of them have enough of the above two ingredients, we end up with a shockingly high number of ‘very good’ books.

The third part, a platform, is now freely available. Kindle Store. Nook Store. Kobo Store. iBooks Store. All of them accept books from ANYONE. No gilded wings or silver spoon required.

Please Note: By ‘very good’ we don’t mean ‘the best book ever written’. We mean a book that a reader enjoys reading. That’s it – a very good read.

Making a very good app is much tougher because –

  1. Firstly, you need the coordination of a lot of different skills OR the combination of a group of people with different skills. The first is nearly impossible and the second is really hard to manage.
  2. Secondly, apps cost a LOT more to make.
  3. Thirdly, in apps there are lots and lots of places you can go wrong – design, coding, testing, etc.
  4. Fourthly, the approval process for apps is painful. There are a thousand reasons an app might get rejected. Much of the credit for this goes to the ‘Closed Ecosystems’ that use ‘quality’ as an excuse to filter according to their personal biases and their own motives.

Basically, writing a good book just needs someone who can write well and who has enough inspiration and motivation. For an app you need a team of people and all/most of them have to have time and skills and inspiration and life experience.

You write a good book and every store will take it. With an app each store has its own requirements and review processes.

The second big factor is that a LOT more people can write a book than can code or program an app.

While lots of people might WANT to make an app, a ridiculously small percentage of them can actually code or design or test. On the other hand, a huge percentage of people can write and are quite capable of writing a book. Interestingly, more people want to write a book (73% in the US) than read a book (13% to 20%, depending on what statistics company you check with).

This brings us to the topic of this post.

There are an infinite number of very good authors

By infinite we mean – so many that, for the average reader, you are NEVER going to run out of good books to read written by these authors.

The reason we still struggle to find good books to read is that

A) Lots of these authors haven’t been given a shot.

B) The Discovery process is completely broken. By design. The stores want lots of books to be able to say ‘We have 2.45 million books’ but then turn around and show only the books they want to sell. It’s a different sort of gatekeeping.

Most of these ‘very good’ authors haven’t been given a shot to even publish. That’s why you aren’t getting enough books you love at prices you love. That’s the key thing that’s going to change in the next 5 to 15 years –

  1. We’ll see tens of millions of talented and inspired and ‘capable of writing very good books’ authors get a chance to publish their books.
  2. We’ll see systems come into place to bring these ‘very good books’ to readers. Very good discovery engines and ‘what to read next’ engines and serendipity engines and search engines.

When that happens, we’ll see –

  1. An infinite number of very good authors rise up.
  2. An infinite number of very good books become available.

Try an experiment and see this for yourself.

Your Experiment: Seeing for yourself that Sales Rank isn’t indicative of Writing Talent or Book Quality

Pick your favorite Genre of Books. Go to any store (Kindle, Nook, Kobo, iBooks, Sony) –

  1. Pick out a few of the best-selling books.
  2. Pick out a few of the books just out of the Top 100 lists.
  3. Find and pick out some of the books that have very low sales ranks.

It’s important to pick out books that seem interesting to you. Basically, pick the books you’re drawn to. Just make sure to pick them from different sales rank ranges.

You’ll notice a few interesting things –

  1. There will be almost no difference between the books qualitatively. What I mean is – the books will, for the most part, be roughly as good as each other.
  2. There will be a LOT of very good books that don’t see many sales. It’s absolutely stunning how many super good books are lost in the lists and piles.
  3. There will be some rather poor books that will see lots of sales.

Where it gets really interesting is that you’ll see the EXACT SAME PATTERN if you pick books in –

  1. The Top 100.
  2. The Top 1,000.
  3. The Top 10,000.
  4. The Top 100,000.

While there will be a higher percentage of good books in the Top 100, there will still be lots of very good books outside the Top 100,000.

The first time you realize there are books with sales rank 125,785 that are really well written – It’s a huge shock.

Why are really good books not selling? Why does no one know about a really good book that even has great reviews? Why does no one know about the tens of thousands of such books that are adrift in the ‘No Visibility outside the Top 100’ sea?

If you think about it, it makes perfect sense.

Online book stores have just a few shelves – Top 100, Movers & Shakers, Store Chosen Books

What did we get with the traditional model?

  1. Publishers chose just a few thousand authors each year. We had a total of perhaps a few hundred thousand authors.
  2. Bookstores chose to display 5,000 to 10,000 books. All of these books got shelf space and visibility.

What do we get with the new model?

  1. Absolutely anyone can publish. We’re rapidly approaching a stage where we’ll have (if we don’t already) millions of authors.
  2. Online stores are stuck displaying the Top 100 and perhaps a few hundred other books. So, instead of 5,000 to 10,000 books getting visibility in each store, and the books varying across the different stores, we get just 100 to 500 books highlighted in online stores and most stores having little variance in books shown.

We’ve gone from a few hundred thousand authors to a few million (we will be there soon). But the number of books getting visibility has gone from tens of thousands to a few hundred.

It’s IMPOSSIBLE for 95% of very good authors and very good books to get ANY visibility

Why? Well, for several reasons –

  1. The above mentioned aspect of only a few hundred books getting visibility in online stores.
  2. Stores wanting to highlight books they can sell for $10 or more and make money from. That leaves out nearly all authors trying to compete on price.
  3. Stores wanting to highlight books they publish themselves and/or books they get paid to promote.
  4. Most ‘very good’ authors having ‘no clue’ how to market.
  5. There being a huge scarcity of marketing opportunities for ebooks. Where could you get visibility when the stores are the only channels?

Why talk about all of this? Because this is hiding a New Key Reality in Books.

There are an infinite number of very good authors now

By infinite we mean ‘so many that you’ll never run out of very good authors to read’.

What you’re seeing now are just a few of the Publisher built-up authors and a few of the Indie authors who understood how to thrive in the new world of Publishing and/or got picked by the stores.

They are just 3% to 5% of the very good authors.

Most very good authors are failing in making themselves seen and read. There are a LOT of authors who are writing books good enough to be bestsellers but aren’t able to get even a few dozen people to read their books and see for themselves.

The system is failing them.

And by failing these ‘very good authors’, the system is failing readers.

There are an infinite number of very good books

Most authors write more than one book.

Sometimes, even not-so-good authors produce a gem.

Quite a few very good authors produce more than one ‘very good book’.

That means that –

  1. Only 3% to 5% of the very good authors have been discovered.
  2. Only 1% to 2% of the very good books have been discovered.

You can see this happen every single day.

There’ll be a book with 1 review or 2 reviews. It gets mentioned somewhere. In a few weeks it has 50 good reviews.

There are books that had no reviews in 2011 that now have hundreds or even thousands of 5 star reviews.

While this happens all the time in books (with new books, and sometimes with old books), it’s happening at a MUCH faster rate with ebooks.


Because more and more very good authors are jumping into publishing their books (often themselves). Because more and more very good books are being published.

On the Cusp of Infinite Very Good Books

In Summary, we’re on the cusp of a Publishing World where the both the number of very good authors and very good books is going to be infinite.

All three statements are worth thinking about –

  1. There are an infinite number of very good authors.
  2. There are an even larger number of very good books.
  3. We’re soon going to be in a world where readers can easily find ALL/Most of these authors and books.

This is what scares the Old Publishers and the New Publishers. This is what they are fighting against. All the moves you see, are the last attempts of the Gatekeepers to keep readers and authors detached from each other and from Reality.

Internet Companies you can trust; Apps you can trust


None whatsoever.

If things like these don’t help us realize, then nothing will –

  1. Washington Post: US, UK mining information from 9 companies.
  2. Guardian: UK is collecting information via the same NSA program.
  3. Verizon passing along all call data to Government.
  4. There are lots of denials. But they are NONSENSE.
  5. Michael Arrington points out the truth

    The companies sending the data have both immunity from prosecution and are also prohibited from disclosing that the NSA has requested or received the data.

    The truth of what’s going on becomes obvious.

    The U.S. government is compelling companies to turn over all personal information of users to the NSA. They have immunity for this, and they are absolutely prohibited from admitting it.

    The result is a massive NSA database that includes information about everything we do online, and everything we do offline that has any online ghost (checkins, photos, etc.).

Everything we do on the Internet or on our devices is available to Government Agencies.

That’s just the reality that all of us should wake up to.

Companies are NOT your best friends

People are DELUSIONAL that companies like Apple and Google and Microsoft are their childhood best friend who have their best interests at heart.

They are not. They are companies.

Firstly, they really don’t care. It’s a corporate entity that works for profits and shareholder interests and it isn’t capable of caring. It’d be like expecting your toaster to miss you when you were on vacation.

Secondly, they are very vulnerable. The Government can shut them down and/or massively hamper them (just ask Microsoft). So, if the Government gives them a choice between revealing some user data or being shut down/hobbled – Which do they think they will choose?

Thirdly, they aren’t as smart as you might imagine. If the Government gets ISPs (Internet Providers) to play along, then it doesn’t matter what the Internet companies or the App companies believe in or do. Everything that goes to them, goes through ISPs and therefore is available to the Government.

As companies it’s their job to tug at your heart-strings or your emotional triggers. That’s how they survive. Google’s Do No Evil is like a Velociraptor’s Claws – it’s a survival mechanism. Same for Apple’s love for Aesthetics. These are evolutionary adaptations. They are meant to create a bond. They aren’t the core of the company.

Everything you do on the Internet is Available to Certain People

This is the first thing people need to realize.

The Internet is like a giant record of everything you do, think of doing, want to do, or actually do.

Nothing you do or search or write about or participate in is actually private.

A lot of what you do on the Internet is Available to Anyone who Looks

It gets worse. Pretty much 70% of what you do and what you add to the Internet is available to anyone who searches for it (or for you).

People get rejected from jobs for stupid things they write every day. As we build larger and larger online ‘profiles’ with our actions, we create bigger and bigger ‘files’ of ourselves. These are available to anyone who’s interested.

How do you think Google, LinkedIn, Facebook, Twitter are going to make REAL money in the future? By selling these ‘online behavior profiles’.

Where can you find privacy

Well, here’s where you can’t expect to find privacy –

  1. Internet Websites. Just doesn’t exist.
  2. Internet in General. Nah.
  3. Phone Calls. No. If Verizon is handing over all call data there’s a very high chance other carriers are too.
  4. Apps. No. With Apps you have multiple vectors of data being accessed – The App Maker, the App Store, The Device, The ISP.
  5. Email. Worst of All. Here again you can have ISPs or the Email Provider take your data.

Basically, the Internet is the EXACT opposite of what you think it is. It’s 100% anti-privacy. It’s 100% ‘an infinite record of everything you ever did or wrote or searched for’.

What kind of world are we living in?

That’s the question we have to ask ourselves.

We’re living in a world where the Government tracks every single phone call and every single website visit of every single citizen. That’s not a democracy, that’s not even a dictatorship. It’s something out of 1984 –

The Oceanian province of Airstrip One is a world of perpetual war, omnipresent government surveillance, and public mind control, dictated by a political system euphemistically named English Socialism (Ingsoc) under the control of a privileged Inner Party elite that persecutes all individualism and independent thinking as thoughtcrimes.

We’ll be given the option to be sheep.

  1. All the technology companies will claim nothing of the sort happens.
  2. The Government will claim it only tracks the duration of phone calls and the length of emails and not what’s in them.
  3. We’ll be told The Guardian and The Washington Post are lying. The reporters will be prosecuted and jailed. The people who leaked them the details will disappear.

We’ll all nod and then get back to our state scheduled programming.

OR we’ll decide that People and the Country and the Constitution are much bigger than the Government.

Is Kindle Fire HD a threat to the iPad?

Let’s start by pointing out that Kindle Fire HD is actually three devices –

  1. Kindle Fire HD 7″. This Kindle Fire HD is just $199. It has a really impressive screen that has 90%+ of the pixels per inch of the iPad 3. Which means that unless you have Eagle Eyes you won’t really be able to tell the difference.
  2. Kindle Fire HD 8.9″. This Kindle Fire HD is just $299 – that’s a HUGE discount from the $499 iPad 3.
  3. Kindle Fire HD 8.9″ with 4G LTE. This Kindle Fire HD is $499 and the most comparable to iPad 3 in terms of features.

All three Kindle Fire HDs are available in the US. The first two are also available in UK, Italy, and Germany.

The USA is the REAL PRIZE … for Now

The Next Web thinks Kindle Fire HD won’t be a threat to the iPad until it is available internationally and until it is available in more than just 4-5 countries. I’m actually going to use EXACTLY the same part that is the focus of their argument to prove my case –

Apple, to use an example, has sold around 55M iPads total as of earlier this year.

The Apple v. Samsung case opened the books enough for us to see that 34M of those were sold in the US.

That leaves some 21M for the rest of the world. That’s over 38% of Apple’s iPad business overseas. The worldwide market cannot be ignored.

The facts seem to suggest the exact opposite – That the worldwide market can be safely ignored for the moment.

Why worry about 38% of the business when 62% is right here in the USA?

America also happens to be the country where Amazon is the strongest. 34 million iPads sold in the USA in 2012 so far. Amazon wants a piece of that.

The question is – Can Kindle Fire HD carve out a piece of the Tablet Market for Amazon?

Well, actually, we sort of have THREE Kindle Fire HDs

The first thing we need to clear up – There are actually THREE Kindle Fire HDs and each of them is going for different market segments.

Instead of – Is Kindle Fire HD a threat to the iPad?

We should actually be asking ourselves – Are the three new Kindle Fire HDs a threat to the $499 iPad 3 and the $399 iPad 2?

We might as well complicate things and assume an iPad Mini is in the works – Are the three new Kindle Fire HDs a threat to the rumored $249 iPad Mini?

In this post we’ll attempt to answer these questions.

The Hard Core iPad 3 Market Segments

There are certain market segments that are NEVER going to choose anything other than an iPad –

  1. People invested in the Apple ecosystem in terms of content. If you have a lot of books and apps and movies in iTunes – you are going to stick with iDevices.
  2. People invested in the Apple ecosystem in terms of devices. If you have a Mac Book Air and an iPhone – you are very likely to choose an iPad as your Tablet.
  3. People who TRUST Apple.
  4. People invested in the Apple ecosystem in terms of credit card information, convenience, and familiarity. People who are used to, and comfortable with, buying from Apple.
  5. People using Tablets to signal status.
  6. People invested in Apple as part of their identity.
  7. People who simply want ‘The Best Tablet’ without regards to money. Kindle Fire HD has to unseat iPad 3. It hasn’t yet. So, for people who just want to buy ‘The Best Tablet’, the only choice is iPad 3. I’m not saying it is the best. I’m saying the perception is that iPad 3 is the best and perception is reality until it is shattered by actual reality.
  8. People who want the Easiest to Use and Smoothest Tablet. Kindle Fire HD has to show it’s easier to use and smoother (which is, to be honest, very unlikely).
  9. People who don’t want Ads on their Tablet.
  10. Certain other demographics such as people who dislike Amazon and people who highly value aesthetics and people who feel 10″ is the perfect size.

There are certain core groups of people who will NEVER switch from Apple. It might be as high as 35 to 50 million people. They are locked-in to the ecosystem or they are focused on the aesthetics or they identify themselves with Apple in their very core or they are focused on the status signalling aspects.

These are the people who must have the latest iPad. Amazon isn’t interested in them at all. Even if if were it wouldn’t matter because they won’t leave Apple (unless Prada starts making smartphones, bonus points if you get the reference).

The Hard Core Kindle Fire HD Market Segments

Luckily for Amazon, it has some very strong market segments of its own. People who will ALWAYS choose Kindle Fire HD (provided Kindle Fire HD is at least close to the iPad 3) –

  1. People who TRUST Amazon. Amazon has had customers since 1995. That’s 17 years and that means a lot of long-term customers. An excellent post on Amazon’s strategy and how it focuses on its customers.
  2. People invested in the Amazon Store. They are used to the store. They have their credit card information. They know all the ins and outs. is the path of least resistance for these people.
  3. People focused on value. Irrespective of how rich or poor people are, there are certain groups of people who always want ‘value for money’ and they will often choose Amazon.
  4. People too lazy to try other stores. is the path of least resistance.
  5. People invested in the Amazon ecosystem or in Kindles. If you already have Amazon content and/or Kindles, then you will go with Kindle Fire HD.
  6. People invested in Amazon Prime.
  7. People who want choice or prefer a 8.9″ or 7″ screen. The availability of both 7″ and 8.9″ Tablets is an advantage for Amazon. It might be nullified once iPad Mini comes out.
  8. People who can’t afford a $499 Tablet. This is a fact lost on a lot of journalists who get all their devices for FREE. $499 has to come from somewhere.
  9. People who can’t afford a high cost data plan. Anyone who actually tallies up the data costs knows just how ridiculous data plans are.
  10. People who want a low-price Tablet for their kids. Again, the iPad Mini will complicate this if it’s sufficiently cheap.
  11. People who prioritize value for money over smoothness and aesthetics.
  12. People who gave up on Apple after the anti-1984 Patent Strategy. Apple going after Samsung Galaxy SIII after it sold 20 million units in 100 days is beautiful strategy on Apple’s part. It’s also seems despicable to anyone who finds patents annoying and who realizes that protectionism is detrimental to progress.
  13. Certain other segments such as people who love Amazon for some reason or who disdain form over function or who find Apple Device flashing people annoying.

These are the market segments that Amazon was losing. By having only a budget $199 Kindle Fire, Amazon was losing huge chunks of these market segments to Apple.

There are a LOT of people who would NOT buy an iPad if ANY decent alternative were available. All those people now have a decent alternative. In fact, they have three.

The Three Kindle Fire HDs win ALL these market segments for Amazon. It might be as little as 5 million people a year. My guess is that it’s more like 15 million people a year.

These three Kindle Fire HDs are going to win Amazon 15 million people a year out of its core market segments – People who would prefer an Amazon device.

Note: Microsoft Surface Tablets might/will/could split this segment with Kindle Fire HD.

The ‘Anything but an iPad’ Market Segment

There are hundreds of millions of people (perhaps 50 million or more in the US alone) who love Android and/or Microsoft and dislike Apple. There are also people who just find the Apple focus on aesthetics and minimalist design and nouveau riche status signalling rather annoying.

These people were stuck. There really wasn’t any good Android or Windows Tablet. Until Nexus 7 came out.

For them, suddenly, there are three additional very good non-iPad options – the three Kindle Fire HDs.

If you use an Android Phone and/or if you love Windows and/or if you detest most of the things Apple stands for. Then which would you rather choose –

  1.  An iPad 3.
  2. A Kindle Fire HD.
  3. Nexus 7.

A significant number will choose Nexus 7 and a significant number will choose the three Kindle Fire HDs.

The ‘anything but an iPad’ market segment is a HUGE segment. People are going to be VERY surprised when Kindle Fire HD and Surface Tablet and Google Nexus 7 sales figures are revealed at the end of 2012. There are a LOT of people who have been patiently waiting for non-iPad Tablets that are very good.

The Undecideds

Perhaps the largest market segment is people who are undecided. These people had just two good options (iPad, Google Nexus 7). Please Note: At any given time there has just been one good non-iPad option. It was Nook Color in 2010 and 2011, Kindle Fire in Holiday Season 2011, and Nexus 7 since its launch.

Now they have a LOT of options. The Three Kindle Fire HDs come in at $199, $299, and $499 (with a cheap data plan for the first year for this one). This means that users have to make some hard decisions on what they value most.

If we keep in mind that most people use Tablets for surprisingly mundane things – email, surfing the web, movies, reading books, playing games. Well, the price and size differences are accentuated. Paying $499 for a device where your top 3 uses are email, surfing the web, and movies is rather hard to rationalize. Especially when there are $199 and $299 devices that are just as good at these three core things. Plus the cheaper Tablets are a more convenient size for a lot of people.

This huge market segment of Undecideds had ONLY the iPad as a good, safe choice in 2010 and most of 2011 and most of 2012.

Now it has iPad and three Kindle Fire HDs and Nexus 7. Soon it will have Surface Tablets and Nook Tablet 2 (we shouldn’t discount the potential value of having 700+600 stores to sell Nook Tablet 2s from).

What are we driving at?

Five things –

  1. Talking about the international market is premature. It’s the third year of the iPad’s availability and America is still accounting for 62% of iPad sales. Whoever wins America has a better chance of winning the world.
  2. Amazon increased the number of GOOD VIABLE Tablets from 2 (iPad, Nexus 7) to 5 (iPad, Nexus 7, $199 Kindle Fire HD 7″, $299 Kindle Fire HD 8.9″, $499 Kindle Fire HD 4G LTE). That’s a BIG jump. B&N and Microsoft might increase it to 9.
  3. There are market segments that would definitely prefer an Amazon device and Kindle Fire HD is going to definitely win over those.
  4. There are market segments that would NEVER buy an iPad and Kindle Fire HD is going to win parts of those.
  5. There is a very large UNDECIDED Market Segment and Kindle Fire HD is going to win part of that segment.

Fundamentally, the Kindle Fire HDs do a lot of things that make life difficult for Apple.

Ways in which the three Kindle Fire HDs make things difficult for iPad

  1. Users get THREE new good Tablet options. It’s absolutely inconceivable that ZERO people considering an iPad or iPad Mini will not instead pick one of the three Kindle Fire HDs.
  2. By pricing at $199, $299, and $499, Amazon has created a huge Value Gulf. Yes, people are willing to pay more for iPads (especially people who view them as status signallers and/or part of their identity). However, people also start questioning whether what they are paying is justified. $299 for an 8.9″ Kindle Fire HD or $499 for an iPad 3 – You have to fill that $200 Value Gulf somehow. There is only so far that a minimalist design asethetic can take you when trying to cross that huge Value Gulf.
  3. People who are for Amazon or against iPad will be FAR MORE LIKELY to pick a Kindle Fire HD.
  4. Apple has to release iPad Mini which creates less profit per unit than iPad. We’re talking about a company that makes $200 to $400 per iPhone and $200 or so per iPad. Now it is being forced to sell $249 Tablets. At most it will make $50 to $100 per iPad sale. That’s far less profit per unit. Even if Kindle Fire HD loses to iPad Mini it kills Apple’s profit margins.
  5. Apple is following market trends instead of creating them. We also see this with the iPhone screen size increase. This is the sort of thing that really affects the perception of people who are going for the fashion statement or status signalling aspects of Apple products. These people will be pained to be seen as followers. Apple better have pico projectors or magic talking screens soon.
  6. [SECOND BIGGEST] Lifetime Sales are lost. If a user buys an iPad, then that user is more likely to buy an iPhone and an iCar and an iTV and an iBrick and a Mac. That user is more likely to buy music and movies from iTunes. That user is more likely to buy iCloud services. One iPad sale lost is not just that lost $200 of profit. It’s the loss of hundreds and hundreds of dollars of lifetime profits from that user.
  7. [THIRD BIGGEST] Loss of Social Proof. Notice an Apple presentation – It’s very focused on Social Proof. Apple takes pains to say – LOOK HOW MANY OTHER PEOPLE BOUGHT THIS. THAT MEANS YOU SHOULD BUY IT TOO. If Apple loses sales then it loses Social Proof. That leaves just things like aesthetics and smoothness and those are FAR LESS POWERFUL.

All these are, however, just icing on the cake. The cake is far more delicious.

The single biggest way in which the three Kindle Fire HDs will hurt the iPad is that they will greatly damage the perception of Apple being ‘untouchable’ and ‘far ahead of the pack’.

Kindle Fire HD shows EVERYONE that Apple has weaknesses and it’s not very far ahead

Nook Color came out at a time when people believed ‘There is only an iPad Market, and no Tablet Market’. B&N was selling 700,000 Nook Colors a month in Holiday Season 2010. It had to hire an EXTRA plane to ship them over.

What did that do?

It showed other people that it was possible to take on Apple. It gave other companies a blueprint. It began to create cracks in Apple’s Great Wall of Perceptions.

Amazon came out with Kindle Fire in Holiday Season 2011 and was supposedly selling 1 million Kindles (of all types) a week. Google came out with Nexus 7 and is supposedly on track to sell 6 million this year.

The Three Kindle Fire HDs will do the same, and on a much more massive scale.

It will give motivation to, and also force, companies like Microsoft and Samsung and Google and B&N to up their game. For a long time people were under the perception that NO ONE ELSE CAN MAKE ANYTHING LIKE THE iPad. And certainly not at comparable prices.

But here they are. A Kindle Fire HD 8.9″ with near Retina screen at $299. How on Earth could this have happened?

Samsung sold 20 million Galaxy SIIIs in the first 100 days of availability. But we were told they were just clone factories.

The Great Wall of Perception is beginning to fall apart.

The success of the Galaxy SIII shows that even the mighty iPhone can be beaten (albeit temporarily). No wonder Apple is running to the courts. It has to try and hide the reality that it is losing the smartphone wars to Android.

It’s the exact same situation with the three Kindle Fire HDs. All Amazon has to do is sell 1 million Kindle Fire HD 4G LTEs and suddenly every technology company will think – Even the main iPad can be taken on.

Once that idea, that belief, is born, then it’s the beginning of the end. Apple’s ‘Perceived’ superiority is far more important than its actual superiority in range of apps and smoothness and aesthetics. That perceived superiority, that Great Wall of Perception, is developing more and more cracks as Samsung and Amazon attack it and show that it doesn’t really exist. It’s all Perception.

Three Kindle Fire HDs are as little of a threat to Apple as the iPod was to Microsoft

People forget that Apple used a stupid music player and white headphones to build the foundation and customer loyalty and Empire of Perception and Aesthetics on which it founded the iPhone and iPad empires.

Can you imagine the conversations in companies like Microsoft when Apple started selling iPods?

They must have thought Apple has gone crazy. That all those years of 5% worldwide market share in the PC market had driven it insane.

It was, however, the foundation. Without the iPods there never could have been an iPhone or an iPad. The halo effect is very real and very powerful.

It’s the EXACT SAME with these three Kindle Fire HDs.

People laughed at Amazon when Kindle came out. A website retailer making devices. Amazon was told it would be lucky to sell 40,000 Kindles lifetime. However, people forgot the years and years of trust customers had in Amazon. People forgot that lots of people love to read and that a device meant just for reading makes as much sense to people who read as a device meant for nothing but checking Facebook and Twitter does to others.

Kindle was a HUGE hit and it (along with Sony eReader and Nook and Kobo) TRANSFORMED the book market and the publishing business.

It’s also given Amazon a platform and a huge customer base of Kindle owners. It can leverage these to jump into other areas. To do inconceivable things like take on Apple.

Seriously. Who would have imagined that B&N would show Apple has a weakness and that Amazon would make the next logical move? Certainly not me.

This is still the learning phase for Amazon. The learning phase for lots of tech companies. Apple has very strong brand loyalty and very good products. Apple links people’s identities to its products better than anyone else. However, people are realizing that those are just competitive advantages and competitive differentiators. That there are dozens of other areas Apple can be beaten on.

The Truth is that companies have almost caught up with Apple on the products front. They are beginning to beat it on the market direction front. They might never be able to catch Apple on the product-user bonding front – but they don’t have to. All they have to do is find other differentiators and focus on those. To compete in areas where they have a competitive advantage. To compete in markets where they have a competitive advantage.

Amazon and B&N are doing that and showing the value of that. Google is finally beginning to get it. Microsoft, depending on what Surface pricing is, might be beginning to get it.

The biggest threat the Kindle Fire HDs pose to iPad and to Apple is that they are showing every other tech company that Apple has weaknesses. That attacking Apple on those fronts is not only a good idea, its the only idea that works. That a large part of Apple’s perceived ‘untouchability’ is just a Great Wall of Perception which doesn’t really exist AT ALL.

Kindle Fire HD isn’t a threat to the iPad. It’s a HUGE threat to everything that makes Apple successful.