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Why Amazon's Kindle Will Eventually Win the e-Book Wars

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To paraphrase Yoda: Begun, the e-book wars have.

Barnes & Noble (s bks) started the week off by cutting prices on its Nook e-book reader to $199 from $259, while also introducing a new, $149 Wi-Fi model. Not to be left behind, Amazon, which helped jump-start the e-book reader craze, decided to cut the price on its entry-level Kindle model to $189 from $259. The punch and counterpunch has prompted more than one watcher of the space to declare that an e-book price war is about to break out.

Others are musing about Amazon’s fate. All this hand-wringing is old hat for our community, because Kindle hardware or not, Amazon (s amzn) is expected to make a billion dollars from its digital book-related business this year. From where I stand, Amazon has nothing to worry about, as long as it pays attention to a few details. (And no, that doesn’t mean sharing a bigger cut of revenues with publishers.) Regardless, there are three technological reasons why the online retail giant can and will win the e-book war.

1. Buy once, read anywhere

The day I first laid hands on Apple’s (s aapl) iPad I banished my Amazon Kindle to the back of the proverbial drawer. And yet, I have been spending, on average, about $10 every 3-5 days on Amazon’s site buying a book to read using the Kindle application on the iPad. In fact, the reading experience on the iPad is so superior to that of the Kindle I often find myself staying up later than usual reading a book.

In comparison, I’ve bought three books from the iBooks store and quite frankly, see no reason to go back. It has fewer options, but more importantly, I can only read those books on the iPad. The books I buy in a Kindle store will work on an Android device, as well as on an iPad, iPhone or Mac. Oh, also on my Kindle by the way, which I can take out of my drawer at any time.

This is a big advantage for Amazon, for as more people start living multidevice lifestyles, such cross-platform availability of content will increasingly become a big deal. Unlike Amazon’s Kindle store, iBooks is going to be limited to the iPad/iPhone platform — which is not good enough for me. I like the flexibility of the Kindle app, even if it offers books to me in somewhat of a less attractive format. In other words, Amazon should be thinking about Kindle as a platform that leverages other people’s hardware.

2. We go way back

Most people already associate Amazon with buying books online. Meanwhile Barnes & Noble, while a great brick-and-mortar brand, hasn’t been able to translate its offline presence into a digital one. As a customer, Amazon has all my billing information and has built a profile of books and digital goods that I like. Could Amazon’s recommendation system be better? Absolutely. But in comparison to Barnes & Noble and other booksellers, it’s good enough.

I do wish Amazon would take some time to improve the customer experience. For example, I recently bought the printed collected works of John Cheever’s short stories — after already buying it on my Kindle. It would have been great if the service had reminded me that I d already bought a digital copy and then asked if I was sure about buying an analog version. There have been other times when I’ve reordered a book I originally purchased, say, 10 years ago — it would be nice for Amazon to ask me: Do you still want it? Or, did you lose it and want a new copy? You get the drift.

What I’m suggesting is nothing radical. Mining data and deriving intelligence from it is a fast-growing field and Amazon has 15 years’ worth that can be used to its advantage.

3. It’s always about the software

When I see companies such as Barnes & Noble try and diversify by building technology products, I laugh; they just don’t have the DNA. Barnes & Noble is a retailer first and everything else later. It’s even funnier to watch the company think it can wage wars with hardware. If that was indeed the case, Samsung, Nokia (s nok) and others wouldn’t be running scared of Google (s goog) and Apple.

The reason the mobile industry is all topsy-turvy is because Apple and Google have made the hardware industry about the software. Sure, the latest features matter, but what matters more is the ability to create and release software at a rapid clip, thus improving the platforms on an ongoing basis. Traditional handset makers are on a product release cycle that’s at odds with such agile development.

Barnes & Noble — and any other competing e-reader makers — are going to find themselves in the same place as well. I think this is Amazon’s third technological advantage: It is, at heart, a software company that sells books and other things. Given the rapid speed with which it has been innovating with its cloud computing offerings, it’s clearly also a disciple of agile development methodologies.

Amazon should indeed be spending all its energies on furthering its app experience to make it the best book-buying and reading application on any platform. That, in my opinion, would be money well spent. The user experience is why Apple is able to command a premium for its products. Amazon can do the same.

So what about Kindle — the device?

If Amazon wants to keep the device around, it will have to transform it from a mere e-book reader to a content consumption device that matches the iPad in its capabilities. Otherwise, like the Nook, it’s already dated.

165 Responses to “Why Amazon's Kindle Will Eventually Win the e-Book Wars”

  1. Kelly Carter

    The winner of the eBook wars, I hope, will be the consumer. No one company will be an all-out winner, although some may become losers. I agree that people are less concerned about hardware than content and capability (usually meaning software). I’m not convinced by your article that the Kindle or Amazon will be the “winner,” but it surely brought out a lot of Kindle aficionados–which testifies to its degree of success thus far. Many reviews conclude that the iPad is inferior in reading quality, that the Nook is preferred by many, and the Kobo reader is a solid choice. So, there are lots of varying opinions out there. Consumers would be wise to do their homework. Thanks for what you brought to the discussion.

  2. If Amazon wants to keep the device around…

    I don’t know that they do. What benefit is there for them to now keep the hardware around? It was mentioned when the Kindle was first announced that Amazon was just attempting to jumpstart the digital book sale market and now that it has and it has software running on most popular platforms I can’t see what benefit there is to Amazon to continue to sell Kindles. Especially at the current price.

    Let Apple, Google and others make the hardware. Amazon has already proven they an ship software that people want to read.

  3. Wow. My sentiments exactly.
    Post iPad I’ve never picked up my Kindle. But on my iPad and iPhone all my ebooks are from Amazon/Kindle. The buying experience is great, it’s instantly available on my devices, I’ve been using Amazon for books before there was even an iPod.

  4. You know what else is lightweight, super-portable, is easy to read, but doesn’t have an entry level cost of at least $200, up to $500? A BOOK!

    Here’s an example:
    http://www.amazon.com/gp/product/B003E2UR1S?pf_rd_p=1263874022&pf_rd_s=center-3&pf_rd_t=101&pf_rd_i=2237633011&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1NGY99ASADX11K0GE33G

    I don’t know what this book is, I just took it as an example off Amazon.com. The book is $12.65 normally, $10.96 digitally. If your device ever crashes, gets erased, or is accidentally dropped, you lose that book AND the use of a very expensive device. Is it really worth saving a buck and a half a book? You’d have to buy a LOT of books to make up the difference if you purchase an iPad for it to eventually become a money-saving device, which it’s not going to be anyway because you’re buying/consuming more books than you normally would just because of the convenience, so ultimately you’ll be spending more money. And by the time you do break even, a new version of the device will come out, you’ll buy it and be starting over. Not a great deal.

    http://www.amazon.com/gp/product/B002YKOXB6?pf_rd_p=1263874022&pf_rd_s=center-3&pf_rd_t=101&pf_rd_i=2237633011&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1NGY99ASADX11K0GE33G

    This example shows that the Kindle version is actually MORE money, by more than $6 compared to the regular paperback edition. Not really any more convenient, but I’m sure you look cool at Starbucks sipping a $6 coffee and reading on your iPad than you would if you just had an old fashioned book. I’m hoping that the winner of the e-Book wars is the print industry.

    • You don’t lose the use of your ebooks from Amazon if your device goes south. You can download them again to a new device and share them with more than one of your own devices such as your phone or computer. It will synch all of them to each other so it keeps track of where you are.

  5. Amazon has already won the front as a retailer and I agree that they will probably continue to hold a major share of e-book sales. I’m skeptical, though, about whether we can really call it a “win” if the Kindle is already old hat compared to the iPad? I also think it’s possible Apple might gain a nice portion of e-book sales if it improves its iBooks store, which I think it will.

    For now, though, I guess I’m also stuck with the low-tech solution. I’ve got so many p-books (physical) at home still to read that I can’t justify buying an e-reader yet!

  6. niceguysneverfinish

    The common masses is buying the idea of the iPad as a book reader because Jobs says so. The main function of an iPad is not a book reader, its a media consumption device.

    Both of them play very different roles, despite Jobs’ argument of putting the Kindle behind the iPad. Ultimately, there will be people like me who will take the Kindle over the iPad anytime, anywhere.

    I must agree with this readers assessment. I have a computer at home, anyone can find one anywhere these days. It is not a good idea for the kindle to try to compete with the ipad. I think the idea is to stick with books and see where it goes. After all Neil Stephenson has a book called ‘the diamond age’ about a young ladies computerized primer. I’d like the kindle to go into this area in the end! Buy this book on your kindle recommended!

  7. I purchased a Kindle. The wife and I loved it. The HOME button was the main complaint (should’ve been same as the left side and HOME integrated somewhere else) and the lack of sorting the books in the library (supposed to be fixed in current update). Other than that, as an e-reader, it is leagues above others in simplicity and ease of use. People say the iPad is a multifunction device. Granted, it is. But when you go to the book store to purchase a book, was the book able to surf the web, listen to music, send texts, etc.? Nope. It was to read. Plain and simple. That’s what the Kindle and other just e-readers are for: reading a book!

    When I found Kindle for PC and, now that I have an iPod Touch, Kindle for iPod, I am further impressed with Kindle. I can read my books at work (secretively on the PC) without having to use my Kindle in view so I look like I’m working when I’m actually not. :-P It has greatly increase my reading time. When I want to read at night and not turn on the lights, I use my Touch. The lighted screen in the dark is perfect although I tend to not read as long since it’s like a beacon of light in the pitch dark and my eyes get tired faster. The Touch (and I’d assume iPad) doesn’t fair well in the bright sunlight. The Kindle has no issue with lighting other than lack of it.

    Anyway, I can purchase books through the Kindle for me and my kids. I can read my books on my Kindle or PC or Touch and they can read theirs on their Touches with no extra charges. The convenience of this alone is what makes the Kindle a better choice for me and mine.

    The wife also has a Nook but the PC version seems to need to have iTunes to work and it’s not as simple as the Kindle for PC. I can’t say for sure as I haven’t used it. I’ve only helped a friend with a Nook find it and she didn’t like the functionality of it. I have the Nook app on my Touch but haven’t used it yet.

    Anyway, it’ll be hard to dethrone a champion device (like iPod vs Zune) when the champion came out doing things right from the beginning. The Kindle is an e-reader and pretty much nothing more. It’s for reading and if that’s not what you want, then you probably don’t want to just enjoy reading a book without all the other technological distractions.

  8. You picked a strange headline for this story, since you conclude that the Kindle device must change radically or be doomed. I agree completely that BN/Nook has no shot at taking over the ebook space, and so in a sense Amazon can be said to have “won the eBook war” against Barnes. 80 days of iPad sales seem to suggest that Amazon has already lost the eBook device wars, though, and Apple is certainly making a strong play for the eBook store, as well. Don’t forget that Google Editions launches later this summer, as well. I think that the real eBook war – the one for the shop – is only starting.
    Now, as for the device –
    I’ve bought over a hundred books on the Kindle platform and read them on Kindle hardware and in the iPhone, Mac, and iPad versions, and I rate the iPad highest of all. That’s for any use other than beach/pool, which might be a tenth of one percent of my reading time.
    I have found no eyestrain issues with the iPad at all, including on a day where I read what must have been over a thousand pages. Saving the beach/pool case, the iPad display is hugely superior on many counts:
    – Font quality and typesetting. Character glyphs on the Kindle look awful – pixelation, bad shapes, everything. The Kindle midword character gap issue – I assume from bad handling of soft hyphens – ought to be legendary by now. Everyone who touts the Kindle as better for pure reading ought to download the PC or Mac Kindle application and look at the same book on a real display. That’s how good it looks on the iPad, too, in the iPad Kindle app.
    – Layout. My original hope for the Kindle was that it would reduce the number of heavy, expensive technical books I had to buy and carry around. However, the Kindle device’s ability to layout images and flow text around them is so poor as to make many books completely unusable. I blame the software and hardware running in the device, as the applications available for the PC, Mac, and iPad have no such difficulty. My Kindle device went fiction-only because of this problem, which the iPad has completely solved.
    – Image resolution. It’s not just the lack of color, it’s the lack of detail in which the Kindle suffers. Pictures on the Kindle look grainy and indistinct. Again, look at the same book on the PC or Mac version of the Kindle app; it looks at least that good on the iPad.
    – Night – The Kindle needs a light in the dark, and no one here has yet mentioned the glare you get on the e-Ink display surface with a booklight.
    – Finally, color. I have been amazed at the number of books that were published in black and white in the print edition that suddenly reveal themselves in glorious color on the iPad.

    The Kindle device is dead. I think eInk itself is dead – as good as the iPad looks now, I can’t imagine what it’ll be like in a year or so when it gets the iPhone Retina display. Color, resolution, high-quality legible typefaces, speedy rendering – if you’re chained to an eInk device, you have no idea what you’re missing.
    The Kindle store and application suite, though, I could easily see winning overall. But it’s not over yet.

    SK

  9. No Kindle or IPad or Nook for this girl. I refuse to pay good money to rent books. You certainly don’t own them. I want to be able to read the book and have the options of 1) keeping it, 2) lending it to friends, 3)donating it to the local library book sale, etc. See?

  10. I bought the Kindle DX in fall of 2009. Loved it when nothing out there was comparable.

    Right now I highly regret buying the Kindle. It sucks badly. I cant read PDFs right, there is no light. The features are so gimped I am not sure if I should have bought paper books with the $500.

    The only reason I didnt go out and buy an iPad was because it still hurts that I paid $500 for a Kindle DX that pretty much does nothing but read books, and a bad job at it most of the time.

  11. Deruta

    Apple is traditionally a hardware company. I think the sole reason they have iBooks at all is because they want to have an option in addition to the Kindle store – they don’t want to be solely dependent on Amazon for a core function of their device. If it doesn’t “win” there it’s not a problem for them as long as it’s available on the iPad.

  12. Chris K

    On the contrary, the death knell of the Kindle would sound if Amazon ever tried to turn it into an iPad clone.

    Instead the way to keep the Kindle around is by sticking to the strengths of e-ink.

    No back lit screen. Easy on eyes. Weeks of battery life. Lightweight. Low-cost. …..

    IN the videogame marketplace, the Wii looked dated graphically speaking against the competition, but won the war even though all the gaming media pundits predicted its demise. Same thing with the DS.

    Not saying Kindle is going to win here, but it seems like we’re seeing a similar situation where not enough credit is being given to the strengths of the Kindle. And too many are falling too much for the flashiness of an iPad.

    And cost-wise you can now get a Kindle and a 32gb iPod Touch for less than the price of the lowest end iPad.

    There’s room for the KIndle.

  13. oldsalt1942

    As for me, I’ll stick to the low-tech solution of actually buying a real book. Though I do make one electronic concession. I download books to my Ipod from Audible.com and let people read to me. The nice thing about it is that you can do other things while listening…walk the dog, drive your car, garden, go fishing. Tons of things like that whereas reading a book whether real or on a reading device means you have to curl up somewhere to do it. Additionally one advantage of an actual book over electronic devices is that the batteries never give out.

    • As a 59 year old, I agree with you – up to a point! I just moved 73 (count ’em: 73) book storage boxes filled with the bulk of my library. I would much rather have had all of these books on my Kindle!

      • oldsalt1942

        I just moved, too. I retired to Panama and brought exactly 8 that’s EIGHT books, total, with me, three of those are: Spanish/English dictionary, Spanish verbs, and “Madrigal’s Magic Key to Spanish.” Since I’m a sailor and plan on living in the Bocas del Toro archipelago I brought along two cruising guides for Panama, the “Oxford Companion to Ships and the Sea,” “The Admiral of the Ocean Sea” and “The Life of the Admiral Christopher Columbus.” On Columbus’s fourth, and final, voyage, he spent a great deal of time in Panama and I intend to visit those places.

  14. I didn’t read all the comments so someone may have already mentioned that iBooks is available on iPad/iPhone/iPod Touch so your “buy once, read anywhere” point needs updating. It will also sync your booksmarks, notes, and settings wirelessly at no additional charge

  15. thedailydrinker

    I too echo what others have suggested: the eye strain using back-lit devices. I had Lasik in 2002 and went from a negative 9 coke-bottle-glasses-wearing nearsighted, to 20/20 overnight. For me it’s comfort and try as I might the iPad wears me out, whereas the Kindle can keep going and going. The harsh bright light before bed leaves me feeling brain fried, whereas the Kindle has no effect on my eyes. I think Kindle will win because they will make that breakthrough which combines an iPad and an eInk device in one, allowing you to switch in a single-side device from bright LED/LCD screen, to plain eInk with the push of a button. Then you get the usefulness of the iPad (which I admit is pretty snazzy) but the traditional, easy-on-the-eyes reading of the Kindle.

  16. Pamela

    Love my Kindle. Reading on the iPad is more difficult because of the strain on the eyes, the weight, & the glare from the sun. I use the iPad for photography & photographic resources & games, but my Kindle will always be my primary reading device.

  17. The only problem I have with the Kindle as it stands right now is that the Kindle only uses the Kindle format. EPUB is quickly becoming a standard among publishers. iBook and B&N both support EPUB (though the DRM is not compatible). Allow the Kindle to support EPUB and you have a killer product.

  18. Om, I think you’re absolutely right. Apple wins on the gadget front, but Amazon wins on content. You know, the iPhone is a great device, but I still get nearly all my music from Amazon or eMusic because it’s cheaper there and I can play it anywhere. If there’s a Kindle app for the iPad, and Amazon has a wider selection and better prices, why buy books anyplace else?

    http://www.toddpack.com

  19. Seong Bae

    Hi Om,

    I agree with Ram. I consider myself very tech-savvy but I am considering purchasing Kindle for just reading books. I do not want a fancy e-book reader that does many other things. At the same time, Ipad seems too big, compared to Kindle, to casually carry around for reading books on public transportation like subway (I live in NYC)

    Seong

  20. We’re a two-iPad family with a serious Kindle book buying habit. We’ll never consider buying from the iBook store until they can be shared between devices. Kindle gives us up to five devices — iBooks, one. Fail.

  21. Thank you Mr. Malik for the thoughtful article.
    Amazon’s and Apple’s revenue approaches are very different from each other. Amazon has a more classic, “razor-blade” approach. They make the majority of their profit from the purchases after the initial purchased product (like how a shaving company makes the majority of their money from the selling of replacement razor blades after the initial razor). Apple, on the other hand, is interested in the initial purchase. The iTunes Store, the App Store, and the iBook Store all exist to give the customer more motivation to buy an iPod or iPhone. Apple makes very little money from the iTunes Store and the App Store, relatively speaking, of course.
    So, a couple thoughts:
    1. Apple may not care if, once you have an iPad, you are buying from the Kindle store. You have already bought the major purchase that makes their profit. However, I am sure Apple would like you to stick around with their iBook Store.
    2. There is always room for two winners. If Apple does end up dominating the hardware sales, Kindle can still win the ebook retailer “war”.

  22. Henry Webb

    “For example, I recently bought the printed collected works of John Cheever’s short stories — after already buying it on my Kindle. It would have been great if the service had reminded me that I d already bought a digital copy and then asked if I was sure about buying an analog version.”

    Really? Maybe you’re buying too many books if you can’t even remember what you’ve already bought.

    • Actually it was a few months ago I bought the book on Kindle so there is a time lag — and yes I do buy a lot of books. On an average about 75-90 books a year, depending on what kind of a year I am having. The year I was sick, I was actually reading a book every three days. Oh… and that is when great mysteries and classics came in handy. :-)

  23. Charles

    One underlying assumption here is that Apple will not expand its iBook application to other platforms. If they see this as a “big deal” they probably will write it / distribute it for the other ones. See what happened with iTunes? It was exclusively available on Macs, then they pushed it to Windows.

    I’m not sure Apple will be forced to do this since they’re building out and expanding their already wonderful ecosystem. But if they see Amazon as a threat for this reason, it’s just a matter of porting over the iBook application to other platform. Something they have ample resources for.

    • Charles

      Historically Apple has been pretty reluctant to expand to other platforms, Safari and iTunes being the only exceptions. I am pretty sure they have no reason to go beyond their own devices for iBooks. Given the fight between them and Google, do you see it being offered on Google’s tablets or phones? I don’t. Maybe on a PC, but is that where a lot of eBook reading is going on? Not sure.

  24. “For example, I recently bought the printed collected works of John Cheever’s short stories — after already buying it on my Kindle. It would have been great if the service had reminded me that I d already bought a digital copy and then asked if I was sure about buying an analog version.”

    Om, this is not an Amazon issue, this is a Gingko biloba issue. :)