Kindle Fire is the biggest threat to the Kindle, Nook Tablet/HD is the biggest threat to the Nook

The Kindle Fire and the Nook HD are the biggest threats to the Kindle and the Nook.

First, let’s understand what dedicated eReaders are up against.

The Perception War eReaders have had to Fight

Dedicated eReaders have always had to fight a lot of ‘perceptions’ and ‘prejudices’. Basically, 2007 to 2012 has been an all-out ‘Perception War’.

  1. No one reads any more. It’s a $25 billion a year business in the US (or at least was in 2007) and yet people seem to believe this nonsense.
  2. Readers will not buy a device dedicated to reading. Again, this is beyond ridiculous. For some reason it’s OK for people in every other passion/interest to buy specialized equipment and devices – However, readers are supposed to not buy a device dedicated to reading.
  3. eInk is not better than LCD. Again, we have LCD-compatibles and they exist in a world where they think of LCD-incompatibles much as we think of werewolves and vampires. Surely, they don’t really exist. How could there be someone who wants to read a book in black and white?
  4. If a device can do more than just read, then it’s the best choice for reading. This is one of the funniest arguments. A reader wants to get ‘the best reading device’ and his non-reader friend says – Why not get something that you can do more than just read on? Why do you care if the reading experience isn’t as good?
  5. Readers don’t want to let go of the touch and smell of books. Apparently, from the number of eReaders being sold, they are getting over it.

However, that wasn’t all. Reality wasn’t kind to eReaders either.

The Reality of what eReaders had to Face

In addition to the Perception War, eReaders had to fight some harsh realities –

  1. LCD screens were far, far advanced in their evolution. eInk had (and still has) a really, really difficult task in front of it.
  2. LCD Screens were evolving faster than eInk.
  3. The companies making eReaders (with the exception of Sony) had zero prior hardware experience.
  4. Getting people to spend $399 or $299 and then having to pay again for books.
  5. Users were used to books and bookstores. eBooks was very new and scary.
  6. Publishers were very reluctant to let ebooks grow.
  7. Tablets were evolving much faster than eReaders. The Tablet reading experience (thanks to things like retina displays) was coming closer to the eInk reading experience in overall satisfaction.

It’s a miracle that we are seeing 10 million or so eReaders being sold every year. We started off with forecasts of ‘40,000 Kindles sold and then it dies’. Now, with 10 million Kindles and Nooks and eReaders being sold every year, it’s again time to consider the mortality of eReaders.

Amazon and B&N are more focused on Tablets than eReaders

Somewhere along the way Amazon and B&N realized a few things –

  1. Tablets can evolve much faster than eReaders because the main ingredient (the screen) is evolving much faster.
  2. With Tablets they can sell users books and movies and music and eventually teddy bears and diapers and kitchen sinks.
  3. They can flip the Tablet encroachment (and they have). If this seems an exaggeration, consider that if it were not for Nook Color and Kindle Fire, Apple would not have released an iPad Mini and Google would not have released a Nexus 7. Nook Color and Kindle Fire created and cemented the 7″ Tablet Market.
  4. With Tablets they can reach casual readers who were choosing Tablets over eReaders.
  5. With Tablets they don’t have to wait another 25 years to get color eInk and sell movies.

It’s actually a very smart move by both companies to shift to Tablets. They are now selling to dedicated readers and casual readers. They are now selling books and movies. They are increasing their customer base.

This might be a great decision for Amazon and B&N but it’s very damaging for eReaders.

Amazon & B&N would rather sell Tablets to Readers than Dedicated eReaders

Imagine you’re B&N or Amazon. You have two options.

Option 1: Sell a reader a dedicated eReader. Then make money from ebooks sold. Also, watch while the reader buys an iPad and spends money on movies and music at Apple.

Option 2: Sell the reader both Tablets and dedicated eReaders. Then make money from everything – books, movies, music, apps.

There’s another aspect to Option 2. You’re adding a permanent mini-Store. You can, down the line, sell the user anything you and the user want.

It’s a no-brainer. Selling Tablets in addition to eReaders. Eventually, preferring to sell Tablets over eReaders.

Without Amazon & B&N focused on eReaders they will gradually stop evolving (not that they’re doing a very good job at the moment)

2007 – The First Kindle.

2012 – A Kindle with a built-in light, a touchscreen, and more clarity.

None of that is really very impressive.

Notice everything that’s missing: Color eInk, Flexible Screens, Unbreakable Screens, Video Support, Games Support.

eReaders were already evolving at a snail’s pace. Now that Amazon and B&N are focused on Tablets, where will the fire for eReader improvements come from?

Sony? (Please stop laughing. It’s a serious question.)

So we will see Kindle Fires and Nook Tablets get better and better. We will also see Nook eReaders and Kindle eReaders stagnate. This makes the contrast even sharper. Soon we’ll have eReaders that are stuck in 2008 (2009 if you’re generous) while Tablets zoom into 2013 and 2014.

Is the Inflection Point Past Us?

There was the first inflection point – when Nook Color did well. At that point the Nook eReader suddenly became B&N’s #2 Priority.

There was the second inflection point – when Kindle Fire did well. At that point, the Kindle became Amazon’s #2 Priority.

Amazon and B&N suddenly went from

Worldview 1: eReaders are going to replace paper. We will be selling hundreds of millions of eReaders per year.


Worldview 2: eReaders are going to be a niche market. Tablets will eventually replace paper and PCs. We will be selling hundreds of millions of Tablets per year.

We don’t know if either worldview is accurate. However, that’s the shift that happened in B&N’s thinking and Amazon’s thinking.

B&N saw the Nook Color as its future. Amazon saw Kindle Fire as its future.

Have we passed the inflection point of the death of eReaders. I don’t think so.

However, there are three things we can agree on –

  1. The single biggest threat to the Kindle is the Kindle Fire.
  2. The single biggest threat to the Nook is the Nook HD.
  3. eReaders have Tablets blocking their growth path to hundreds of millions of devices sold per year.

From Amazon and B&N’s perspective this is fine. They are exchanging a ‘one digital revenue stream’ device with a ‘multiple digital revenue streams’ device. They are also effectively safeguarding themselves from a world where they are made obsolete when it comes to digital products. However, for anyone who wants ‘dedicated reading devices’ to keep improving, this is sad and unfortunate. We are not going to see very many big advances in eReaders. We might even see them become a niche product and slowly die out.

Are all Kindle competitors taking the wrong approach?

The Kindle has probably had a pretty good Thanksgiving Weekend. It’s certainly had a pretty good three years.

As we head into December there’s something about all the Kindle Killers and eBook-Market-stealers and ‘better than Kindle’ Kindle competitors that’s worth considering – None of them is actually trying to replace the book.  

The Kindle replaces the book

If you try to figure out what the Kindle’s unique selling proposition is you run into a bit of a problem.

The Kindle isn’t like any other electronic device. It’s not very shiny and it doesn’t do a lot of things and it’s not going to help you show off. It doesn’t do ‘new gadget’ things and it’s not focused on color or touch or jazzy new technology. It’s not the flavor of the month and it’s not ‘new’ and it’s not trying to be.

Perhaps the reason the Kindle isn’t like any other electronic device is that it isn’t one. It’s just a book – a new, evolved form but a book nonetheless.

Amazon and the Lab 126 team are replacing the book and they’re not pretending that people will drop something they’re comfortable with and move over to a completely new something else.

So the Kindle tries very hard to replicate the reading experience – it uses eInk, it tries its best to fade into the background, it doesn’t let you do anything other than read, it focuses you on reading, and it tries its best to duplicate a physical book.

People who complain the Kindle isn’t a book don’t realize how similar it is

You hear people complain about how the Kindle doesn’t smell like a book and it doesn’t look like a book. 

Well, the Kindle can’t smell like a book and it can’t look like a book. It’s not made of paper and wax.

What the Kindle can do, and what it does do very well, is replicate the reading experience. The Kindle duplicates the reading experience you would have with a book and that’s far more meaningful than the smell of wax and ink.

So, Amazon has taken the Kindle and turned it into something that mimics the book reading experience very well. eInk is a huge part of it as is the focus on reading. You get lots of book-like features – long battery life, compactness, portability, simplicity, independence from other devices.

Set aside all the extrinsics and you find that most of the intrinsics of the book reading experience are there.

Some Kindle Competitors are trying to get rid of the book

If you look at the Nook Color or the iPad or at the iPhone you get a very different message – Get rid of books. You don’t really need them. Try something else.

If you disagree consider the weight these devices are putting on color and animation and video. If they were trying to replicate books they wouldn’t care about animation or video one tiny bit. They care so much about non-reading things because they feel the book is ancient and should be thrown away and replaced with some multimedia monstrosity that spoils a good story by having low quality video and cheesy animations.

Books = Think Different, Non-Books = Think What We Want You to Think

Take a look at the Alice in Wonderland story app for iPad that was being touted as a big deal.

Would you rather have your kids imagine what Alice looks like when she’s growing and shrinking or would you rather they have it spoonfed to them with over the top animations?

A lot of these devices are approaching books from a TV mentality – let’s show people, let’s advertise to them, let’s inculcate desire, let’s introduce homogeneity. A non-book is simply an image created to further some other goal.

A book paints a story as a rough outline – your imagination fills in everything.

When we discard books for non-books, which have images and video and which flesh out the story completely, there’s nothing left for the reader to do. We aren’t even readers at that point – we’re passive consumers.

We aren’t ‘enriching’ books by overloading them with multimedia. We’re discarding their best part – our imaginations.

The Kindle is excellent at the Imagination part

The Kindle replicates the two qualities of the book that make it so great for exercising our imaginations –

  1. There are only words – The story lets you fill in all the details. 
  2. There are no distractions – You can commit to the story.

None of the multitude of tablets and smartphones which supposedly ‘destroy/kill/maim/murder/castrate/decapitate/flagellate’ the Kindle every few months have either of these two crucial qualities.

People who truly want to use their imaginations will choose books or Kindles.

Of course, we have LCD-compatible, never-distracted superhumans amongst us whose eyes burn so brightly that LCD screens seem dim and actually improve their sleep habits. For them, Tablets are perfect. Us humans – we need books or something that replicates books.

The Kindle isn’t going to be beaten by a device that is trying to destroy books. You might sell 50 million TV-watching, Game-playing tablets and call them eReaders – that doesn’t change a thing.

No Tablet is ever going to replace books. It might destroy books – it’s definitely not going to replace them.

That leaves us with the dedicated eInk Readers from Sony, B&N, and other companies. Fortunately for Amazon, all these ‘Kindle Killers’ are making a very fundamental mistake.

The Kindle makes everything easy and convenient – just like a book

When you have a book with you – you can read it anytime, you never have to worry about battery life, you don’t need a computer, you don’t need to start it up, you don’t need a WiFi hotspot, if you’re into the book you don’t really care what’s going on around you or in the world. It’s easy to forget everything else and get lost in the book.

It’s very easy. There’s no friction. There are no distractions. The battery never runs out.

There are also no additional charges – You don’t have to pay per use or for bandwidth or for anything else.

The Kindle is mimicking that. Battery life is weeks. Everything except reading is terrible so there are no distractions. Everything is easy. You don’t need a computer. Books download in 60 seconds – You don’t even have time to go check the mail while you’re waiting. The dictionary is built-in. There are no wireless charges.

Basically, the Kindle is doing its best to be as easy and convenient as a physical book.

It misses out in some areas (durability, low price, free sharing) and improves on the book in other areas (carrying thousands of books, in-built dictionary, reference, search).

Rival eReaders are losing out by being difficult to use

Consider the Nook – It added a touchscreen to show book covers and for navigation.

What book needs a touchscreen?

99% of the time you’re doing page turns. You don’t need a touchscreen. You also don’t need to be able to see book covers in color. That’s replicating a supermarket book display shelf – not replicating a book.


A book is simple, Nook isn’t

A book is painfully simple to use – you open it and start reading. That’s it.

With the Nook 1 you have difficult to use menus and the touchscreen-eInk discord – It’s complicated and it’s just not a very book-like experience.

Only a non-book would require a computer

Lots of people defend the Sony Reader and say it takes them 30 seconds to load a book from their computer. That’s not the point. The point is that they have to use a computer. .

It’s not about laziness. It’s about having to do a very non-book thing with something that’s supposed to replace your books. Imagine if every book had to be taken to a computer before you could start reading it.

The Sony Readers simply don’t care about convenience – If you want to add a note you have to go into a special mode. That’s the most non-book like thing they could have possibly come up with. Imagine if your book required you to transform it into a special form to be able to take notes in it. Then you had to press a special button to be able to highlight. Then another special button to turn pages.

It’s a mockery of the simplicity of a book.

Kindle rivals need to take the path of least resistance

eReader companies have very different perspectives on how to make a great eReader.

  1. Sony thinks – How can we make a great electronic device to read books on? What cool features can we add? Can we add a touchscreen?   
  2. Sony is so engrossed in making a great electronic device it doesn’t figure out that page turn buttons make more sense on the side. There are a dozen other small but important details Sony misses because it’s not really thinking about replacing books.
  3. B&N thinks – Let’s match a lot of the Kindle’s features. Let’s add a lot of the features that Kindle owners are asking for.
  4. B&N is so focused on replicating the Kindle and then improving on it that it forgets – It’s supposed to replicate a book and not the Kindle. B&N’s focus on one-upping the Kindle results in the complicated, hard to use interface. It wants to beat the Kindle by having lots of options and a touchscreen but it forgets that a book has neither.

The path of least resistance is to simply make a book. Not a Kindle killer. Not a beautiful ‘Sony’ electronic device that happens to be an eReader. A book.

All these companies are trying to replace books and yet they are focused on making electronic gadgets. They have to make something as simple as a book and yet they keep finding ways to add complexity.

There isn’t really a true Kindle competitor

iPad is trying for a bit of a paradigm shift – It wants to replace books and reading with something else entirely. Same for smartphones and Android Tablets.

Nook Color is a great device that misses out on the two things that most make eReaders like books – eInk and a lack of distractions.

Nook 1 and the new Sony Readers miss out on the simplicity aspect and the fact that they are replicating books and not making shiny electronic gadgets.

The Kindle is, unfortunately, the only eReader that’s actually trying to replicate books. At some level it’s a sort of respect for readers – We know you love books and you love to read. We aren’t going to tell you that your reading and your books ought to share the stage with something you don’t like to do. We’re just going to try and make what a book would be like if it were invented in the 21st century.

Kindle, Nook causing Apocalypse – New Book sells more ebooks than hardcovers

The Kindle 3 has just begun to reach readers and already Kindle, Nook are causing a huge seismic shift. We have the first major book release that is selling more ebooks than hardcovers.

Laura Lippman book sells 4,739 e-books and 4,000 physical hardcovers in first 5 days

We get this interesting snippet from the Wall Street Journal about the new Laura Lippman thriller –

Laura Lippman’s thriller, “I’d Know You Anywhere”, went on sale Aug. 17, and in its first five days sold 4,739 e-books and 4,000 physical hardcovers, said News Corp.’s HarperCollins Publishers.

Harper Collins is predictably stunned –

“This is the first book of ours of any consequence that has sold more e-books than hardcovers in the first week,”

It’s also beginning to realize some of the advantages of ebooks –

… if a book gets a good review, it gets a faster lift on the digital side than it does on the physical side because people who have e-readers can buy and read it immediately

Who would have thought there were advantages to selling ebooks?

Perhaps Publishers will now stop trying to kill ebooks and start focusing on how to make the most of them. HarperCollins sold more ebooks even though it had hardcovers lined up in bookstores and grocery stores and online. Surely, that’s a sign.

Is this a random occurrence or the beginning of a trend?

Around a month ago, Amazon said it’s selling more ebooks than hardcovers. However, it was counting Kindle ebook sales (which are probably 80% to 90% of total ebook sales) and comparing them against its own hardcover book sales (obviously much less than 80% of total hardcover book sales).

It was impressive but nowhere as impressive as today’s announcement from Harper Collins.

The Laura Lippman book from Harper Collins is selling more ebooks than hardcovers. It’s doing this even though it’s overpriced at $12.99.

The higher ebook sales mean sales through eReaders like Kindle, Nook, and Sony and via devices like iPad resulted in more ebook sales than there were hardcover sales. Hardcovers were probably sold through Amazon, WalMart, B&N, Grocery stores, Target, and everywhere else – It’s just absolutely stunning that eBooks outsold all those channels combined.

If we assume Kindle and Nook eReaders accounted for 80% of ebook sales (feel free to argue that 80% of ebook sales were through iPhones or smartphones) that would mean 3,791 ebook sales were via Kindles and Nooks. That’s almost as much as ALL physical channels combined.

It may very well be the start of a trend 

In a few weeks we’ll have perhaps half a million to a million Kindle 3s and Kindle WiFis in people’s hands. In a month or two after that we’ll have Nook 2s and Sony 650s and even more Kindle 3s in readers’ hands.

If a book is already selling more ebooks than hardcovers then in a few months we might see a lot more books sell more ebooks than hardcovers.

A commenter at the WSJ article makes a very good point –

 Often publisher-reported sales are equivalent to the number of units that get sold to distributors/retail outlets, and judging by the round number “4,000″ physical sales, consumer purchases may not even be represented here.

In fact, could this number be even lower??

He’s the founder of BookSwim so he might be biased against Publishers. However, it does seem that the 4,000 number could be an exaggeration – books shipped as opposed to books sold.

Things are getting very, very interesting.