How important are cellphones for eBooks?

This post is just going to ask some questions around this issue. It’s madness to attempt to answer it straight -

  1. You have eReader owners believing that cellphones have no role to play. Perhaps rightly so since cellphones didn’t do squat for eBook sales or traction – it’s only with the advent of eReaders that we are seeing big changes.
  2. At the same time the portion of the population that reads a lot of books on their cellphones is up in arms about how cellphones will always be important ebook reading devices – especially after, as they believe, dedicated devices have disappeared.

Consider the comments on this Teleread post – ‘Cellphones as eReaders may be important to Publishing’s future’. I’m on Richard’s side – Assuming a lot of readers read complete novels on their cellphone is probably wishful thinking.

However, let’s look at it from a neutral viewpoint.

How significant is reading on cellphones?

Flurry released their analytics in the middle of last year saying there were 3 million iPhone owners reading eBooks. Let’s figure out numbers for 2009.

Let’s consider exactly what that might equate to -

  1. 3 million owners reading eBooks.
  2. Reading Apps compete with 100,000+ other apps.
  3. Cellphones probably aren’t used for reading when books or dedicated eReaders are available.
  4. Perhaps a million or so Kindle for iPhone users. Perhaps another half million or so users for all other reading apps (as opposed to just books).
  5. Let’s say these two groups read one complete book every 3 months.
  6. Let’s say the remaining 1.5 million read a book every 6 months.

Using that very rough estimate we get – 1.5 million readers that read 4 books a year and 1.5 million readers that read 2 books a year. That’s 9 million books a year.

What about people who read a lot on their cellphone?

Let’s assume there are .2 million readers (which we’ll add on as we’re feeling generous) that read a ton of books on their iPhone or cellphone and they read a book every 2 weeks. That’s .2 million readers that read 26 books a year which equates to 5.2 million eBooks a year.

Our total is now 14.2 million books a year. This is our rough estimate for 2009.

How significant is reading on eReaders?

Let’s say the number of eReader owners are – 1.5 million for the Kindle, .75 million for the Sony, .25 million for all other eReaders (average for the year). We’re talking 2009 so we leave out the Nook.

What this might equate to -

  1. 2.5 million eReader owners. 
  2. These are obviously more likely to be big readers.  
  3. The devices are tailored to reading and there are no distractions.
  4. The upfront investment means users will be motivated to get value out of their device and read lots of books.  
  5. Let’s say .5 million are voracious readers that read a book a week (read = buy) which gives us 26 million ebooks sold.
  6. Another 1 million are frequent readers that read a book every 2 weeks. That’s another 26 million eBooks sold.
  7. Finally, we have the remaining 1 million that read a book every 2 months. That’s 6 million eBooks.

Our total comes to 58 million eBooks. A rough estimate for 2009.

How significant is reading on other devices?

We’ll take the easy way out and leave this out of the equation – The post is analyzing whether cellphones are hugely important as eBook reading devices so comparing their importance to eReaders is enough for the moment.

What do our rough estimates say about the importance of cellphones?

The two key figures are -

  1. 14.2 million books a year on the iPhone. Keep in mind that only 3 million out of the tens of millions of iPhone owners actually read eBooks.
  2. 58 million eBooks a year on dedicated eReaders. It’s important to note that almost every single eReader owner reads eBooks.

Even with limited penetration and a small user base (3 to 5 million total eReaders) we have dedicated reading devices dwarf the iPhone in eBook sales (in our estimates). The 3 to 5 million eReader owners buy over 4 times the number of books that 30 to 50 million iPhone owners buy.

Why then are people fixated on iPhone owners and cellphones?

Lots of reasons -

  1. Mistaking intent – Buying a device that is focused on reading books is much more valuable than buying a device that can be used for reading books. Yet people assume one iPhone user is equivalent to one eReader owner.
  2. Not valuing the top 20% of customers who account for 80% of sales. These will almost always buy dedicated eReaders.  
  3. Being overawed by numbers. If 35 million or so iPhones lead to 3 million ebook users that’s still just 3 million ebook users – NOT 35 million.
  4. Assuming do-everything devices can be as good as dedicated devices.
  5. Assuming people will value convenience over the quality of the reading experience.
  6. eReaders have no sex appeal.
  7. Mostly because it’s a great story – the myth of the ‘does everything excellently’ device.

The other factors are easily overcome – you can show the percentage of eBook sales that eReaders account for and quiet down claims that the iPhone is more important for reading than dedicated eReaders. However, the story is hard to beat.

 The ‘iPhone kills eReaders’ story

The tech savvy don’t look at eReaders as great for reading, simple to use, devoid of excess functionality. They simply see - not enough features, it looks so 1985, it’s not shiny enough.

Since they control most of the tech media and since a lot of the commenters are very tech savvy too there’s a constant portrayal of eReaders as terribly inefficient and a waste of money.

In that context we have a story -

  1. Once upon a time there was a beautiful kingdom where all the gadgets were shiny and so advanced they had functions that people didn’t even use.
  2. Then there arose a terrible plague on the land – eReaders that hurt the technocracy’s delicate sensibilities because they only did one thing and they did it without catering to the wishes of the gadget lords.  
  3. The technocracy then decided to imbue cellphones with a magical ability to read books better. The mechanics of how this was done are still unknown. However, it was a breathtaking achievement – in the space of a few blog posts (and perhaps a few ultra-powerful tech-magic spells) cellphones became the best devices for reading.
  4. The people who had been forced to read on eReaders and give up the freedom to while away their time rejoiced and threw away their eReaders.
  5. Cellphones, without even trying, vanquished eReaders. The technocracy showed how they know better than readers what’s good for readers and books. They showed how a device that wasn’t even originally meant for reading can still beat the terrible travesty that is the dedicated eReader.
  6. The kingdom was at peace again.

See – that’s a beautiful story. That makes sense to someone who values the gadget over the written word.

It’s too bad gadget lovers and the tech savvy aren’t the only people buying books or this beautiful story could actually come true.

Rumored death of ereaders

There has been a flurry of articles proclaiming the death of eReaders. Thought it’d be fun to compile all the reasons people think eReaders are doomed and see whether any patterns show up.

What are the main reasons people think eReaders are dead?

  1. The iPad is revolutionary.
  2. iPad can do multiple things – it’s not limited to being an ereader.
  3. iPad can do a lot and is better value for money.
  4. There aren’t enough voracious readers to support eReaders.
  5. The market for a single-purpose dedicated device for reading is a very, very small market.
  6. With iPad publishers can create whole experiences and go beyond ebooks.
  7. iPad is going to steal all the casual readers.
  8. iPad looks so good and it’s so sexy.
  9. Apple products are sexy.
  10. The iPad makes the Kindle look like it’s from the 1980s.
  11. iPad’s screen has multi-touch and gestures and is a pleasure to look at.
  12. iPad will have iPhone Apps and its own Apps.
  13. iPad supports ePub (Note: People are going to get a rude shock when they figure out there’s proprietary Apple DRM on the ePub).
  14. iPad’s iBooks Store and eReader Software is very good.
  15. iBooks creates a buying experience.
  16. iPad lets Publishers make more money off of books.
  17. Kindle and Nook screens are only in black and white.
  18. They were never interested in a dedicated eReader.
  19. They want a device that can do more than one thing.
  20. eReader contrast is not that good.  
  21. eInk makes no difference, its overrated, LCD screens are fine for reading.
  22. People compare the iPad with the $489 Kindle DX and not the $259 Kindle and Nook.
  23. The weight and size doesn’t affect portability.
  24. One handed reading isn’t important.
  25. My reading is broken into chunks and eye-strain is not an issue.
  26. iPad will kill larger eReaders since it delivers more at a similar price.
  27. iPad will take over education and that will limit eReader growth prospects severely. 
  28. Color is necessary for textbooks.
  29. Color is necessary for design books.

There was a commenter who mentioned that it all comes down to 2 reasons and he’s right -

  1. The iPad (or the next eReader Killer) can do more than just read.  
  2. The iPad (or the next eReader Killer) is pretty and sexy and cool.

It’s amusing that the two main reasons people think eReaders are going to die out have nothing to do with reading.

People who, for the most part, don’t read much are proclaiming the death of eReaders

That really was the big thing that stood out again and again – The Death of eReaders is being predicted by non-readers.

  1. Most of the people claiming eReaders are dead don’t read much.
  2. Most of the people who say eInk is nothing special have neither read on eInk nor do they actually read books on LCD screens.  
  3. People say they don’t want a device that just reads and then indicate that they read ‘in between other things’ and ‘not enough to warrant a dedicated reading device’.

These are literally people who don’t need an eReader. It’s perfectly valid for them to see eReaders as ‘unnecessary’ in their lives.

Their only mistake is in assuming that eReaders are irrelevant to everyone else.

Main reasons people are saying they want a dedicated eReader

It’s interesting to see a ton of people chime in and support eReaders. Here are their reasons -

  1. eReaders are designed for dedicated readers.
  2. Kindle Store has more eBooks than anywhere else (excluding free public domain titles).
  3. eInk is great for reading.  
  4. ePaper and eReaders are going to keep evolving.
  5. LCD is tiring to the eyes and doesn’t work in sunlight.
  6. eReaders focus on unitasking.
  7. Low Price – Devices like iPad are more expensive and the subscription price adds up.
  8. Book Prices – All signs point to Apple allowing Publishers pricing freedom which would be a disaster.
  9. They don’t want to be constantly distracted by games and email.
  10. Kindle is smaller and weighs less than half of what the iPad weighs.
  11. Kindle is thinner.
  12. The iPad is not a replacement for ePaper.
  13. They want a real eReader.
  14. Much better battery life.
  15. No keyboard on the iPad.
  16. Lack of handwriting recognition on the iPad.
  17. Books at Kindle Store are much cheaper than Apple’s stated prices i.e. $12.99 and $14.99.
  18. Books available outside the US – iBooks from Apple is US only at launch.
  19. Why do some pundits reflexively assume a Swiss Army type device is always better than a single purpose device.  
  20. For trips don’t want to keep finding power outlets and plugs and worry about battery charge.
  21. Don’t want ‘more’ than a Kindle – already have a lot of computers.

Here, again, we see a simple distillation -

  1. eReaders are focused on reading and excellent at reading – people who love to read want a device for reading.  
  2. They also want lots of books and at low prices. Price is important for both books and book readers.

eReaders serve a very real need for people who actually read

Except for LCD compatible humans most people who read a lot want some very specific qualities in a reading device -

  1. eInk screen which reads just like paper. 
  2. Very long battery life. 
  3. Capacity to carry a lot of books.
  4. A focus on reading and only features that complement reading.
  5. And so on.

For these people eReaders are doing a valuable job.

Of course, they do want a lot of improvements and for eReaders to evolve. Their main requests are -

  1. Better Screens.
  2. Better ways to take down notes.
  3. More reading related features.
  4. More books and at cheaper prices.
  5. Color. 

The Color ePaper Waiters

One interesting group caught between the eReader haters and eReader lovers is people for whom a color screen is important. These include -

  1. Students who need color textbooks. 
  2. Photographers and Designers and other creative types who need color. 
  3. People who want to read comics on their reader.

Until ePaper evolves a multi-purpose color device is best for these people.

Quick Thanks

Articles referenced include -

  1. Forbes’ article – Five Reasons iPad isn’t a Kindle Killer
  2. GigaOm’s fawning iPad will kill the Kindle article. 
  3. WSJ Digits Blog.
  4. TechFlash which argues both sides of the argument.
  5. The co-founder of Blue Nile at TechCrunch who refuses to answer whether he’s ever read a book on a laptop.

The Conclusion – Two very different devices

It’s pretty straightforward -

  1. People who want to read ‘once in a while’ want multi-purpose devices and can’t understand readers ‘wasting’ $300 on a dedicated eReader.
  2. People who read a lot want dedicated eReaders and don’t understand how the multi-purpose people and the LCD compatibles get by without a dedicated eReader.

It’s two completely different markets. They’re both big, huge markets.

People underestimate how large the eReader market is. It’s much, much bigger than people realize -

  1. The current market penetration is between 3 and 6 million eReaders. A lot of people think this is as good as it gets.
  2. The estimated market size in 4-5 years is 15-30 million eReaders. This is something most people begrudingly admit – and even then they feel/wish/hope this will get eaten up by multi-purpose devices.
  3. The actual market size will be 150-250 million eReaders. Simply think of eReaders as replacing paper.

The only thing that could kill ePaper devices and eReaders is paper. Since paper isn’t evolving (except in the form of ePaper) there’s little danger of that happening.

If ePaper keeps evolving soon even multi-purpose devices will have to embrace ePaper.

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