With Apple’s release of the iPad, and their move into eReader book sales through the iBook, some have argued that Apple has just rung the bell, tolling the death of the Kindle.  Others argue that, among other things, the Kindle meets a certain “niche” (just as the iPad serves a niche) and thus will not only survive but thrive.  In fact, an Amazon spokesperson said, in that NY Times article:

Customers can read and sync their Kindle books on the iPhone, iPod Touch, PCs, and soon BlackBerry, Mac and iPad. Kindle is purpose-built for reading. Weighing in at less than 0.64 pounds, Kindle fits comfortably in one hand for hours, has an E Ink display that is easy on the eyes even in bright daylight, two weeks of battery life, and 3G wireless with no monthly fees — all at a $259 price. Kindle editions of New York Times best sellers and most new releases are only $9.99.

This is a key strength of the Kindle –the portability of reading. As I have written before, in several places, a move to ubiquitous reading seems to be the greatest opportunity facing publishers.  Make reading your books, or magazine, tied to the reader, not the device.  With the Kindle publishing/software reader business unit Amazon is heading down that road. I can move from Kindle-enabled device to device, and when I pick up a device, it will automatically sync to where I last was reading in any of the other devices.  This actually makes having several different devices quite attractive, so that I can use the device that is most convenient for the task (or location) at hand.

So that brings us to the “Kindle reading experience” on the iPhone.  I personally like the Kindle app for the iPhone.  In some ways it is superior to the Kindle itself, specifically in how it handles highlighting and notetaking.¹  This makes the iPad a very attractive device to me, as a Kindle reader for those tasks when I want to highlight and take notes, generally for work-related reading.  I can even see Amazon enhancing the app on the iPhone/iPad even further, perhaps blending the Kindle App with Stanza for a better reading experience.

Even the author of the article in the NY Times that put forward “Three Reasons why the iPad WILL kill the Amazon Kindle” has conceded that the Kindle app has significant draw:

Kindle’s store and its reading application for the iPhone are both excellent, simple experiences for purchasing and consuming books. Amazon understands this market better than anyone and could easily sell more books on the iPad than Apple could through its new iTunes bookstore. Amazon also offers an excellent recommendation system, and I can envision some users opting for the Kindle application on their fancy new iPads.

I can actually envision more than “some users” opting for the Kindle application–especially if they are able to develop a similar flashy interface for showing your bookshelf, and helping you “buy” books from Amazon.  Don’t forget–a significant number of people have already heavily invested in the DRM’d (copy protected) books sold  by Amazon, and they will not want to leave that investment behind.  Will they opt then for what will be (most likely) another DRM’d book format?  Say what you will about the fact that the Amazon books aren’t portable, there is some comfort in having all the books you purchased available for download from a single repository.  Avid Kindle readers may not want to leave that behind.

So the question becomes: will Apple now “ban” the Kindle App (and possibly Stanza) for the same reason that it banned other apps, including the Google Voice app?   The reason, as you may recall, was that the app “duplicated functionality” that the phone provided.  Other apps have been rejected (er, “not approved” — sorry) for the same reason.  Clearly, by entering into the eBook sales business they are seeking to directly compete with Amazon in this “space.”

What do YOU think? Will Apple ban the Kindle App in the near future?

This can make for a very interesting future.  I can imagine a very fluid world with digital books, using much of the technology already existing.  Let’s discuss briefly the existing tech (in the Kindle) and the look at how we can imagine a new reading world.

Ease of Delivery First, the Kindle allows the purchase of books through the Sprint cellular network (a service Amazon has called “Whispernet.“)  Books are delivered relatively quickly (in my experience in less than a minute) and are ready to read.  I actually ordered, and was reading, a book for our Sunday School class before the sign up sheet to order the hard copy of the book even made it to my row.  So here we have the first component to the future.

Fluid Movement Between Devices For those readers that are unaware, Amazon has released a Kindle app for the iPhone that lets users read Kindle books on their phone.  As with any book that you read, when one goes from one device to another (or pick up a different copy of the same book) one must search for where they left off.  A different copy means no obvious book marks.  Amazon makes this simple–they synchronize where you were in one device when you pick up the other.  It tells you that you have read further ahead, and asks if you want to move to that spot.  Pretty “cool” in my book.

Devices for Different Settings As noted above, the Kindle is no longer just the “device” but it is the operating and reading application.  One can not only read on the “Kindle” that you purchase through Amazon (see the link on the right column of this page) but you can choose two different size Kindles.  In addition, you can also read using the free application for the iPhone.   As you move through the day, you can read using the devices that best fit your lifstyle at that time.

Currently books, magazines and papers are sent to “Devices” and are thus tied to the device.  You can move easily between those devices, but cannot pick up a different device.  But imagine a different world.

Imagine a world where the books,magazines and papers are associated with the person rather than the device.  As you move through the day, you pick up a “Whispernet capable” device (iPhone, Kindle, or something new) and “log in” to the Kindle.  You are presented with a list of items you have purchased, and you select which one you want to read.  Quietly, and quickly, the book or paper is downloaded to that device, and it picks up right where you left off when you were last reading.  In this way, you are able to read your books, without being tied to a device.

But what could this mean?

• Libraries can have “digital reading rooms” where people (especially students) can sign out a device, log on, and read their books simply, and easily.
• One could have several devices in the house and work place, shared between family members or co-workers.  Just grab the closest device, log on, and start reading.
• With the digital voice technology (available in the Kindle2) we can even imagine a device that, when we log on, will read to us as we drive.  Satellite Radio replaced by books!

Reading can become what we do, when we want to, not when we remember to bring our books, or our devices.

The possibilities seem almost endless.  How could you imagine this world?

• Text books have a limited audience, resulting in smaller volumes of sales and prin runs (10′s not 100s, of thousands).  Limited runs mean that the overhead and setup costs of printing a run are spread across a fewer number of books. Historically to make a book cheaper they either had to reduce the quality of the materials, automate the process, or produce larger production runs hoping to sell more of the books.
• The costs associated with distributing books are high (packaging, warehousing, and shipping to name a few key ones)
• The inability to accurately forecast demand for “new” editions at locations, because of the…
• Strong used  book market that publishers compete against

My support for digital textbooks has emphasized that digital textbooks drive out  out the costs associated with physical books, and thus allow for both a reduction in price, and an increased margin for the publisher.  This can be seen because:

1.  Publishers no longer need the overhead necessary to design the packaging (including the covers), presses to print the books, warehouses to store the books, or distribution systems to ship the books.   Oh, and they don’t need the management to manage all of that.  This drives costs out of the process. (hint–what could this do for prices?)

2.  Because the books are delivered, directly to the student through digital means, there is no need to keep safety stocks of book inventories to cover the sales of the books.  No physical inventory drives costs out because it means there is:

• No capital outlay for bookstores to buy a “forecasted” amount of books
• No shelves required for the books
• No possibility of stockouts (I had a class where there were only enough books for 10% of my students well into the second week of class!)
• No need to ship back the unsold books, because the forecast was “wrong” (due to used book sales, borrowed books, or just students “dropping” the class.)

3.  The digital rights management (DRM, or “copy protection”) of digital books appears to be rock solid, so students are not likely to “give” copies to their friends.  Publishers would be guaranteed sales², allowing them to lower prices. This would mean that:

• Publishers don’t compete with a ‘re-sale’ market. Think about this.  Part of the reason the costs are so high for the textbooks is that the publishers know that they will only “fully” sell out in the first semester the book is available.  Every semester after that they are competing with a (rather robust) resale market.
• Publishers won’t have to release new editions every two years “simply” to refresh the sales.  With strong DRM publishers can expect to make sales to nearly every student, every semester.
• New editions will be developed for the right reasons–new, improved content and new knowledge.

Given the above, my argument really focused on the need for publishers to pass on the savings to the consumer (the student) making textbook pricing reasonable again.   The major criticism of students (the high prices of textbooks) could all but disappear.

Affordable textbooks for students, and increased (and guaranteed) revenue for publishers!

One of the key points in my argument had been (yes, had) that the DRM on the Kindle and Sony readers was secure, and thus students wouldn’t hack the books and “share” (illegally give copies) to other students.  That is essential to keeping the revenue model moving forward for publishers and is why the RIAA and MPAA are working so hard to protect their intellectual property.  But alas, sometimes things change, and we know that if anyone can hack a DRM it will most likely be motivated college students.

Thus, I have been spending time thinking about how we can still achieve a win-win, even if students “crack” the DRM market.

Stay tuned! More on this to come!

¹ Unfortunately, there will be near term losers, including the people working at the printing presses, the local bookstores, and the supply chain partners that normally deliver, store, and reship textbooks. More on these folks later.

² Think about it. In a class of 30 students, in the first semester a new book is offered, all the students will buy the book. Let’s say the book costs $100. That is $3000 in sales for the publisher. (Not profit. Remember the high costs of physical books.) Now let’s assume that half of the students with new books decide to resell their books each semester. If in the next semester half of the next class purchases “used: books that reduces the revenue for the publisher to just $1500. If we follow this through, then the 3rd semester, 3/4^ths of the books in the class are used books cutting revenue to $750. by the end of the second academic year the publishers revenue is cut to about $400. In two years, with 120 students going through the class, the publisher would make $5650. If there was no used book market, the publisher could make the same revenue selling the books at $47/book. And that is assuming there was no savings in costs by shipping digitally!