Wednesday, December 9, 2009

Four Reasons Why Apple's Tablet is Irrelevent to the eBook Market


As if there wasn't enough confusion and uncertainty over the development of the growing eBook market, it's still common to hear people making grand predictions about how Apple's long rumored "tablet" is going to sweep in, take over the market, and make everything that's happened before (especially Amazon's Kindle) obsolete and irrelevant.

Well, I'm here to put that to rest.  It isn't going to happen.  Whatever happens in the eBook market, Apple's tablet is going to be almost completely irrelevant.  Here's why:

1.  It may not exist

Okay, I wouldn't put big money on this one, but remember, this is just a rumor we're talking about here.  Now don't get me wrong, I have no doubt that Apple has some tablet prototypes floating around somewhere.  It's a concept they've toyed with for years.

But having a prototype is a long way from shipping a product, and Apple is far too smart to just shove a product out the door unless they think they have a winner.  (Not that Apple hasn't had it's share of failures.  Anyone remember the Newton?  Or the Pippin?  No?  Google them.)  Companies often invest large sums in prototypes and designs, tease them around, and never bring them to production.  Anybody remember Volkswagen's "New Minibus" of the mid-90s.  It was shown at car shows, announced for production, and even hatched a number of toys (including die-cast cars and a Barbie vehicle) before it vanished with no explanation.

There could be any number of reasons for Apple to not bring it out, or at least delay marketing it.  Maybe they're waiting for just the right display or battery technology or price point to come along.  Maybe they're waiting for more wireless data capacity to come along (since the iPhone has already logjammed large parts of AT&Ts network).  Maybe they're worried it will compete with existing product lines that are already highly profitable.  Maybe they don't want to launch a major new product line into a dead economy.  Maybe they just don't think it will sell.

So, while I think it's likely that Apple will sooner or later ship something like the rumored tablet product, it's not a certainty.  (And for that matter what is this "tablet?"  Is it a souped up iPhone with a really big screen?  Is it a new flavor of Macintosh?  Is it the sort of unheard-of new-category product that Apple is famous for?  People seem to be assuming it has something to do with eBooks based simply on the shape.  Certainly it will have a screen, memory, and processing capability, which means it can display an ebook.  So can your existing laptop or cellphone or the Jumbotron at the stadium.  Doesn't necessarily make it an ebook game-changer.)


2.  It costs too much

Okay, assuming that the rumors are true (and I'm going by the very latest rumors I could find), the Apple tablet will sell for about a $1000.  That's way too much to be a significant factor in the eBook market.  The entry-level Amazon Kindle and Barnes and Nobel Nook sell for about $250, and a slew of other eBook readers (mostly without wireless capability, and some with LED screens) are on or entering the market at even lower prices.

Given the rumor-factor, that price could be wrong, but we can make a couple of safe assumptions about this myth-product, whatever it is, if it is.  It almost certainly won't close less than an iPhone, and probable will cost more.  AT&T is selling no-contract iPhones for $600-700, and new MacBooks start at $1000, which seems to put $1000 somewhere in the sweet-spot for this product.  Unless the rumors are completely wrong, it definitely isn't going to sell for under $500, and that just makes it a non-player.

The future of eBooks is with products cheaper than the current front-runners, and with non-eBook-specific products that huge numbers of people are already carrying with them anyway (primarily phones and computers at this point).  To make significant market penetration, a eBook reader either needs to be in peoples pockets and purses already, or to be cheap enough that they won't hesitate to carry it everywhere with them, or to be cheap enough that they'll own several and keep them handy where-ever they might want to read.

Of course, while it's pretty certain this product may be used as an ebook, it's also pretty certain Apple won't be marketed as one anyway (Steve Jobs is on record as saying nobody actually reads any more, and relative to the kind of financial numbers he's going for, he might be right).  If people buy this product in large numbers, and they might, it will be primarily for reasons totally unrelated to eBooks.  All of which means that, if the tablet does hit the marketplace, it will likely sell in far larger numbers than a $1000 eBook would.

It doesn't matter.  At this price, this isn't going to be an "everyone has to have one, now" product like the iPhone, and it's going to be priced way above most people's impulse threshold.  There's no way it will sell (in the near term, anyway) in the kind of numbers needed to remake the eBook market.  Of the numbers that do sell, many will be to people with little or no interest in eBooks, and it's going to be to valuable an item to carry around in a the casual way an eBook needs to be used.

 3.  It's Too Late

Going back to the rumor-well, latest word on the street is that the tablet might ship in the spring.  By that time the Nook will have shipped in significant numbers, half-a-dozen new eBook readers will be on the market, and the Kindle 2 will have been on the market for well over a year.  Amazon has a commanding, but perhaps not unshakable, lead in the market.

There's a short list of candidates to unseat them, all of them already in motion: Barnes and Nobel with their Nook, Sony with their Reader line, newspaper and magazine companies that might offer reduced price reader hardware as part of subscriptions, phone companies, who might offer reduced price devices as part of a contract deal, and who already have eBook-capable smart-phones flooding the market in Kindle-smashing numbers.  Apple's Tablet isn't even close to making this list.

Which brings us to the final reason...


4. Apple's eBook game-changer shipped a long time ago

The most significant development in eBook readers isn't an eBook reader.  It's the iPhone.  Not just for the phone and its market penetration, though these are significant factors, but for popularizing the full-featured smart-phone market and the app-store concept.  Over 30 million iPhones have already have already been sold, all with instant access to multiple eBook apps (including Amazon's).

According to an article at MediaBistro.com, Android-based phones (which include the hot new Verizon Droid) are projected to sell 6.5 million units this year, increasing to 31.8 million units in 2013.  According to the same article, Android users have already downloaded just one eBook app 120,000 times.  These are huge numbers, relative to the most optimistic projections of dedicated eBook readers.

Current generation smart phones like the iPhone and Droid are far from ideal eBook readers.  The screens are too small, too hard to read, and the battery life just isn't there.  They're definitely too small for the older audience who are currently the early adopters of eBooks.  But they don't have to be perfect.  They're already in people's pockets, they're there when people need them, and if they aren't ideal as a primary eBook reader, they're perfect as secondary ones.  They're also a great way for people to sample eBooks without making the major outlay of a dedicated eBook reader.

As for the future, it's only a matter of time before smart-phones add larger fold-out or roll-up screens.  Battery life will probably improve,   Streaming video and web-browsing will be the driving forces here, but eBook apps will come along for the ride, and that could be a the biggest game-changer yet.

When will we see these big-screen phones?  Maybe the next iPhone?  You know Apple.  Always the game-changer.

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