Thursday, March 3, 2011

The iPad 2 and the e-reader app situation

In the articles linked and summarized below, note the Apple-device revenue-sharing issues that were described in a blog entry Feb. 24.

Many Kindle owners also own iPads for color-intensive books, web-surfing, and shorter, lower-light reading sessions, and many are (according to article comments) waiting to hear what Apple plans are for Kindle, Nook, Sony, and Kobo apps for iPhone and iPad in July.

"Why you should wait before buying an iPad 2"
That is the headline for a Communities Canada parenting blog by Chad Skelton, who makes the following points:
' Of the people I know who have an iPad, or who want one, one of the reasons they want one is to use it as an ebook reader... in addition to Apple's own iBooks, you can also download other ereading apps for the Kindle and Kobo -- even library ebook apps like Overdrive.  It's the one device that doesn't force you to lock in with a particular book buyer -- meaning you have the broadest possible selection to choose from and can comparison shop for the best deals.

  But all that versatility is at risk.  Apple's new subscription and in-app purchase policies -- which will require apps like the Kindle to cough up 30% of every book purchase to Apple -- may well force other ereading apps off the device.
  [The wording should be "might require" rather than "will require" as the wording is still for subscription apps until we know more.]

Which would, in one stroke, turn the iPad from the most versatile ebook reader to the least.  Instead of having your choice of several ebook stores, you'd have a choice of just one: iBooks. '

Now that Random House is adding 17,000+ e-books to Apple's iStore, it could be that some Apple execs could decide to consider B&N, Amazon, Sony, et al, "middlemen" -- said to be of no interest to Apple, and the way to get them off the iPad and iPhone/iPod Touch would be to just grab 100% of the revenue-share of these competing online bookstores wishing to have their apps included on the Apple devices.  One can understand a 3-10% fee, but 30% from 'middlemen' who get only 30% in the first place would be indicative of unparalleled, open greed.

 If that turns out to be the case, I don't know why Apple wouldn't just say they no longer want competing online bookstores on their devices.  I think that's better than just saying they want 100% of the revenue that the other stores would normally get (30%).

The article ends with:
' But if you're interested in using your tablet as an ereader, you'd be wise to wait a few months to see what happens before plopping down $500 or more on what could be a very lame ereader come this summer. '
The many comments to the February 16 article linked in the quotes are an indication of how many Kindles (UK: K3's) might be bought due to such a decision by Apple.

"Apple’s new subscriptions policy takes the lustre off launch"
This mentions other apps that may not be available on the Apple devices.
The New Stateman's Jason Stamper
' Rhapsody said in a statement that, "An Apple-imposed arrangement that requires us to pay 30 per cent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is: we would not be able to offer our service through the iTunes store if subjected to Apple's 30 per cent monthly fee vs a typical 2.5 per cent credit card fee." '
  Rhapsody will be looking, with its market peers, at "an appropriate legal and business response to this latest development."

  Apple did buy Lala last year, though, and may have its own plans, Stamper said.  Also:
' The chief executive of Pearson, the publisher of the Financial Times, said on Monday that it may pull the FT out of Apple's ecosystem if it refuses to give up customer information.  "It is unclear how their proposal is going to work, we are still talking to them," said Marjorie Scardino.  "The important thing to remember is there are many, many tablets coming out and multiple devices ... [from] Kindle to mobiles.  If indeed Apple are not happy to give us customer data then maybe we will get it somewhere else." '
Stamper adds:
' It's little wonder that if the Wall Street Journal is to be believed, the Justice Department and Federal Trade Commission are "looking at" Apple's new rules for possible antitrust violations.  At the heart of the issue isn't the 30 per cent fee but that requirement that in-app subscriptions have the same price as offers outside the app. '
  The coming (March 11) iPad 2 is considered "more an update than an upgrade" by some reviewers, and as a result some expect an iPad 3 in September with real changes instead of something to keep momentum up while the myriad of tablets are released in the next few months, while others feel that Steve Jobs's statement Tuesday that 2011 will be the year of the iPad 2 means this is IT for this year unless they also release a 7" of some type (whether a large iPod or a small iPad).  In any case, those who prize the e-reader capabilities available today will be waiting for further developments before dropping money automatically for Apple's latest edition of the iPad.

  Already, although Android apps are not plentiful yet, the Xoom WILL support Adobe Flash, will have true multi-tasking (apps actually running in the background rather than suspended, and their activity showing in a window), have a USB port and an SD slot and, most important for book readers, will run the various e-reader apps.

Kindle 3's   (UK: Kindle 3's),   DX Graphite

Check often: Temporarily-free late-listed non-classics or recently published ones
  Guide to finding Free Kindle books and Sources.  Top 100 free bestsellers.
UK-Only: recently published non-classics, bestsellers, or highest-rated ones
    Also, UK customers should see the UK store's Top 100 free bestsellers. Below are ways to Share this post if you'd like others to see it.
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  1. There is no way that I can consider an iPad 2 until the ebook situation is made clear and the Kindle app is 'safe'. The recent questions regarding the app's status are enough to make me worry that even if it is safe for now, Apple might pull something in a year or so. Especially if Amazon eventually releases a tablet of their own.

    It has made me wary enough that I catalogued the iPad apps that I use on a daily basis and made sure that they were available in the Android marketplace. They are so I can migrate to that platform if Apple forces me to.

    Kindle, Twitter, Sally's Spa, WWF, Dropbox, Angry Birds, Yelp, Netflix & Sirius are all available on Android so I can rest easy.

  2. Apple's problem could be greed, it could be stupidity, it could be yet another illustration of their obsession with control. Here's how I see the three scenarios.

    GREED: For us, 30% is too much for an Apple service that amounts to little more than processing a credit card transaction. But there areindications in executive remarks that Apple thinks that it's not getting enough from us for creating iPads and iPhones, even though Apple makes a healthy profit on their sales. Grabbing 30% of a steadily growing number of business transactions that take place on their devices is a way to give Apple the sort of profit it thinks it has earned. In this scenario, Apple is starting with book publishers because it sees them as weak and desperate, much as music publishers were when the iPod took off. But the logic of what Apple is doing will drive it to tax all sorts of business related apps that depend on some sort of subscription, with only the provision being that Apple will want to have a comparable scheme of its own in place before it evicts competitors.

    STUPID: For the publishers of glossy magazines, Apple's 30% slice is actually a good deal, since it saves them the cost of printing and mailing, as well as the cost of developing their own turnkey billing and distribution system. In this scenario, Apple execs are confusing that with the far different and more established market for ebook sales. There, publishers already have relationships with online stores that handle the sale and distribution for 30% of retail and provide ereaders that are as good or better than iBooks. For them, Apple is inserting itself into an existing transaction and demanding a lot while providing nothing. Apple execs, knowing nothing about this enormous distinction, are simply being stupid. If glossy magazines seem happy, why are book publishers so angry?

    CONTROL: Apple is certainly obsessed with control and some of their app evictions do seem to flow from that attitude. One of the first apps I got was a free and extremely popular WiFi sniffer called eWifi. Apple yanked it from the app store, allegedly for duplicating the functionality of the WiFi section of Preferences. That's nonsense. In front of my apartment, eWifi gives me detailed information about 14 WiFi stations. Standing on the same spot, Preferences gives me limited information about only 3. The most charitable thing I can say about Apple is that, while it removed eWifi from the app store, it didn't attempt to yank if off my iPhone. I can continue to use it until some iOS upgrade does it in. But why did Apple do this, given that they aren't selling a competing app or service? Jealousy that someone was doing something better than they may have been a factor. But control was also a major issue. eWifi did things for happy users that Apple did not want us doing.

    Which of the three scenarios is the most important? I'm not sure. But the situation has changed my POV. As a publisher, I could benefit from an iPad that'd show me how my ebooks actually look on all the major platforms. But it makes no sense to get one while Apple is creating fear and confusion about whether the Kindle app will still be on an iPad after July. It makes more sense to get a Kindle 3 and make sure my ebooks look good on the largest platform and let the version in iBooks look however Smashwords automated conversion utilities make it look.

    Chad Skelton is right. Apple has managed to turn one of the key advantages of the iPad as a reader into potentially one of its chief liabilities. If serious readers are forced to make a choice, most will opt for Kindles and Amazon (at one third the price) over iPads that only offer the iBookstore.

  3. We don't know how the subscriptions/e-readers app issue will resolves itself. But even putting that aside, I can't get excited by an iPad or any other tablet for reading until the resolution is higher and the price is lower.

    On the other hand - I think the iPod touch 4G with its 326 PPI display is an awesome device for reading. I like it so much that I stopped using my Kindle and sold it (and write extensively about the differences between the iPod touch and Kindle for reading, here:

    I could get interested in an iPad-like device for reading it if were smaller, lighter, less expensive, and had a higher resolution display. Until then, I'll stick with an iPod touch for reading - though I may get a Kindle as well for reading in bright conditions once it hits the $99 price point (which we all know is coming).

  4. I don't need much incentive to refrain from spending $600 on a device I'm not even sure I would use much, but certainly the logic of waiting until June or July to see what happens with reading apps on iOS is as good a reason as any to me. But I don't think that would be true of most people. Plus every day seems to bring a new Android tablet to market; eventually there will be a few that match up well against iPad, particularly once Honeycomb ships.
    I would have liked to see a higher resolution screen (say 1280x1024) of the same size or even smaller. I love my iPod Touch's hi-res screen, and imagine a larger tablet could also benefit. Maybe that's the iPad3.

    The publishers wanting the customer information is understandable, but that's not what Apple is offering to anyone. And it is not clear to me if publishers are still able to offer subscribers the option to pay without using their iTunes account, or to launch a web browser to complete the purchase in the web browser (and without paying Apple anything).

    And where does this leave Zinio? Any subscription available for iOS can also be read with their AIR app. But the act of subscribing does not force you to read on iOS.

    Guess we'll have to wait and see..but I kinda don't care about paid subscriptions, because RSS gives me more than I can handle, for free...

  5. Tom,
    Re what is 'possible' with subscriptions, please see my blog post at

    I use a combo of RSS and Kindle subscriptions because I like the navigation in the Kindle app.

    As for Kindle subscription apps, see the one they have for Android. It includes the magazines and newspapers. Obviously the one they made for Apple devices does not include these though.

  6. Tom,
    The Xoom (though it has drawbacks) does have a higher resolution screen and some who like watching movies will like that it's in the usual widescreen format though others prefer the 4:3 shape. It has real multitasking, not suspended apps. It will get an update for Flash support.

    $600 for now, with a data plan at $20 or $30. 32 gig mem and 3G of course. USB port, sd slot. But slower than the iPad 2. Does have Honeycomb.

  7. "If that turns out to be the case, I don't know why Apple wouldn't just say they no longer want competing online bookstores on their devices. I think that's better than just saying they want 100% of the revenue that the other stores would normally get (30%). "

    Because a lot of people are stupid and can't do the math.
    This way Apple makes everyone else look greedy to the masses who're incapable of adding 1+1 to make 2 for not agreeing to let Apple have a "reasonable share of the profits" as the service provider.
    It's a big marketing game, and one that Apple (outside of places like the Kindle forums and anti-trust departments in some countries) seems to be winning.

  8. Anonymous, that's true. Good point. I've seen only one column that mentioned Apple in essence (if they do insist on 30% of one-off e-book sales) would be wanting 100% of a bookstore's share of the sale.

    I was actually shocked to see it in print at all, since the others fly right over that for some reason.

  9. Apple, Steve Jobs, has a view that people do not care about choice, rather they like simplicity, and closed systems are the best way to provide the customer the better product. People want something that just works. Apple's closed Mac lost big time to Windows running on more open hardware. iPod using iTunes was a big winner and closed except for iTunes for Windows and mp3. A big exception, as most music on iPads is mp3 and most music is purchased on iTunes for Windows. The iPad, in many ways is the most closed yet. No way in, no way out. Steve's dream product.

    Without the Kindle App I believe sales would have been much slower. I for one will eBay my 2 iPads if Kindle App is not available in the future. There are good alternatives which will be available to Amazon and they will more open.

    There is no way of knowing which path Apple will take, but Apple is on a tear and has always been about closed systems, win or loose.


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