Even With Fuzzy Math, iPad Wins Another E-Book Hand Against Kindle
It was supposed to be all about the iPhone 4, but Steve Jobs couldn't resist taking a swing at Amazon (AMZN) by slipping in numbers on Apple's (APPL) e-book sales for the iPad at the Worldwide Developer Conference. And even if the figures are overstated, Jobs' swagger alone tips the scale in Apple's favor.
But there are other good reasons to hand a victory to iPad.
Sheer Potential
Downloading more than 5 million e-books (that works out to approximately 2.5 per device) in the first two months of iBooks' availability is some serious demand, even if some were free. Jobs reported that the "Agency Five" -- HarperCollins (NWS), Penguin (PSO), Macmillan, Simon & Schuster (CBS) and Hachette (LGGDY) -- estimated the app accounted for about 22 percent of their electronic sales.
Critics have pointed out that those sales don't include Random House, as the book publishing behemoth still hasn't worked out a contract with Apple to sell its digital downloads via iBookshelf. No matter. Until the publisher comes around -- and it will, otherwise it would be just as stupid as refusing to sell books to Barnes & Noble (BKS) -- iPad users can still buy and read the Kindle versions of RH's e-books (as well as plenty of other publishers that don't currently sell through Apple).
On the Right Functionality Track
Updates to iBooks include the ability to highlight text, add bookmarks, and create notes. The table of contents of each book has also been tweaked to list all the bookmarks and notes created by the user. Better yet, updated iBooks will support documents in PDF format. This adds to the app's ability to display books to a large number of new titles.
iBooks will also be available on the iPhone's next version and Jobs said users can download the same book to their different Apple mobile devices for free.
Competitively Priced
Forester Research's James McQuivey suggested shoppers would always gravitate back to Amazon's marketplace because, "Amazon has your credit card on file, they know what you like. That relationship is the key to selling books."
Will a credit card on file and algorithms to suggest similar books be able to stem the squawks of angry consumers if the price of Kindle drops? But a stand-alone device won't be competitive for much longer -- even among so-called "serious readers," so Amazon may be forced to slash its sticker price and eat the cost.
This places the retailer between a rock and a hard place because a new Kindle is set to appear in August. The stand-alone device will not only sport minor upgrades, but the older Kindle (still priced at $259) will be fresh from its turn on the sales floors of Target (TGT).
Apple is in a unique position to scarf up a big slice of marketshare if it continues to play its cards right â€" bluffs and all. The e-book business is booming. Sales of digital books from the 13 publishers that report results to the Association of American Publishers rose nearly 252 percent in the first quarter of 2010 to $91 million. Even a fraction of those sales is a mighty fine take and the volume of downloads has nowhere to go but up.
Image via Flickr User Larry Kang CC 2.0
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