Ereading Update: Ebooks, tablets, and app confusion

Kindle editions eclipse paperbacks ahead of schedule and tablet competition increases.

During the recent announcement of Amazon’s 4th quarter results, Jeff Bezos highlighted that Kindle books have now overtaken paperback books as the most popular format on Amazon.com. While Bezos had previously predicted that ebooks would become the most popular format by the 2nd quarter of 2011, he admitted, “this milestone has come even sooner than we expected.”

So not only are ebooks the most popular format, but the growth of ebook adoption is even faster than Amazon predicted, a strong sign that ebooks are now mainstream. Or, to put more simply, ebooks are the preferred format for readers. So now what? How does this shift impact authors, agents, publishers, and bookstores?

With such a clear tipping point, it is important to recall that this is just now happening, so it is going to take some time before everyone accepts this shift and realizes what it means for their business. While many in the industry could see this shift approaching and started the process of adaptation, I think the shift has come much earlier than most anticipated.

Tablet market remains hectic and very competitive

I can’t recall a more competitive market than what we are currently witnessing for tablet computers. While Apple continues to sell iPads like hotcakes, competition is beginning to eat into the market. According to Strategy Analytics, the iPad lost ground in Q4 of 2010. The iPad took 75% of the shipments, which is quite a decrease from the earlier 96% share.

Samsung is reporting that they’ve shipped some 2 million Galaxy Tabs in the two months they came onto the market in November of last year. Unfortunately they are experiencing an above average level of returns. The researchers at Strategy Analytics have found that the customer return rate for the Galaxy Tab is 15%, compared iPad’s return rate of 2%.

Again, the battle of the tablets will be won by the company that delivers the best software experience. Unfortunately for Apple, this is where their closed garden approach to software may ultimately diminish their share of the tablet market. I’d be very surprised if an open solution didn’t gain the most favor for owners.

Software may offer a competitive advantage in the long term, but vendors are currently focused on hardware. Below I take a look at two new devices.

The LG G-Slate

slate.jpgThe G-Slate will launch using Android 3 Honeycomb, and it will be the first tablet to launch on T-Mobile’s 4G network. The G-Slate will have an 8.9-inch screen, a dual-core 1 GHz Nvidia Tegra 2 CPU, 32 GB of internal memory, two cameras (5 megapixels on the back and 2 megapixels on the front), LED flash and HD (1080p) video as well as stereoscopic 3D recording capability.

The T-Mobile G-Slate will be among the first 4G tablets to fully benefit from the tablet-optimized Android 3.0 platform, which was designed from the ground up for devices with larger screen sizes.

Brainchild launches the Kineo Android tablet for schools

kineoHands.jpgAimed at the education market, Brainchild’s Android-based Kineo features an 800MHz dual-core processor, 256MB of RAM and 2GB of storage, as well as WiFi connectivity, an SD card slot and an HDMI output for streaming data through HD television screens.

In a way, the Kineo represents the first signs of the second level of integration of tablets into society. Considered more utility than a resource, these specialized tablets focus on solving a singular problem.

Other news

Things started to get messy when Apple blocked the Sony ereader application because it would have gone around Apple’s proprietary purchase system. Sony responded by conceding to Apple’s demands and adopting Apple’s in-app system. Apple responded by clarifying that apps must only provide equal access (an option) to the Apple in-app purchasing system.

Interpretations of these requirements differs. So far, there are many applications currently in use on iPads — like the Kindle app — that take iPad users to a website for them to complete purchases. Apple has not indicated if they will crack down on these applications. Amazon has yet to comment on the prospect of having to include an Apple purchasing option. Currently it is estimated that 40% of iPad ebooks are bought directly from Amazon. Another 12% are bought from Barnes and Noble Nook bookstore. What’s at stake is the automatic 30% cut that Apple takes on all iBookstore purchases.

While I’ve mentioned this before it bears repeating: Apple must concede that they will not own ebook distribution like they do for digital music downloads. What’s confusing is that Apple is a hardware company. Yes, they stumbled onto the iTunes monopoly, but iTunes was only a utility to get people to buy more iPods. So with an already commanding lead in tablet sales, why jeopardize that lead by forcing users to stay within their walled garden? We live in a highly networked world and consumers no longer accept inferior service delivery. They merely route around the failure and get what they need from the next suitable replacement. Time will only tell whether customers care more about Apple’s “it just works” strategy or freedom of choice.

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