Amazon Kindle biz boosted by... Apple iPad
Tablet users turn to retailer for more, cheaper books
Amazon's Kindle e-book reader is doing rather well - and it's all down to Apple.
US investment house Cowen and Co. has forecast that Kindle sales will rise 140 per cent during 2010, with shipments hitting 5m units.
Amazon's e-book business will do even better: it will grow 195 per cent to $701m, Cowen forecast.
It's e-book sales that matter, since Amazon is believed to be subsidising Kindle prices out of the money it makes from selling digital books. The more e-books it sells, the lower it can take the price of the Kindle.
The latest version now costs only £109 - the one with free 3G connectivity is only £40 more - well below the cost of rival devices with comparable technology, such as Sony's PRS-350 Reader.
Lower hardware prices lead to higher sales.
The iPad contribution comes from the iOS apps Amazon has released. Cowen spoke to 500 iPad owners and found that a third of them prefer to read e-books using Amazon's app. They said the online retailer provides a better selection titles than Apple's own e-book store and app, iBooks. Kindle prices tend to be lower too.
Crucially, the survey results suggest that it's those user who buy more books - 25 or more a year - who are more likely to favour the Kindle app.
Says Cowen: "The results support our view that the iPad is not having a negative impact on Kindle device or e-book sales. In fact, we think the adoption of tablets will boost Kindle e-book sales, especially since 20 per cent of current Kindle e-book buyers do not own a Kindle device."
It reckons Amazon will account for 76 per cent of e-book sales to Apple's five per cent, though in five years' time those shares will have shifted to 51 per cent and 16 per cent, respectively.
That's in the US market, of course, which saw digital sales hit 11 per cent of total book sales in July. That's a level way in excess of sales here. It marks a jump from seven per cent in June, showing there is a real interest in using e-book readers on summer holiday trips. ®
COMMENTS
lol
one thing I can say it is easy to get your stuff published on Kindle and the royalty payments arn't too bad considering the zero effort set up (30ish% and 70ish% depending on price)
Who Has the Price Gun
Your central point remains, Amazon has more books for less cost.
iBooks are like iTunes, the publisher sets the price and Apple takes 30%. For both stores, the publisher chooses if the store will offer the eBook. (In contrast, a brick and mortar book store may get its books direct from the publisher, from a wholesaler, or used; the publisher only has control over first sale.)
So far so good. If Apple charges more, it's either that the publisher is charging less to Amazon or Amazon is taking a smaller share and/or subsidizing their eBooks.
Amazon may also have said that in order for it to "stock" the dead tree version, it requires a steep discount in its cost for electronic versions. Perhaps this better explains how Amazon may have lower prices, higher title count, and is profitable.
The publisher, though, may be seeing that they have to sell three e-books for every dead-tree book they don't sell, and until volume ramps up, they may see increased unit sales and declining revenue. A store that can't leverage dead-tree sales is perhaps getting a price meant to drive per volume e-book revenues closer to their paper predecessors. Some publishers may think eBooks are a losing proposition for them. Amazon? Well, they need Amazon. Apple? Not so much. The good news for them, as they look at it, no used e-book market.
Meanwhile, in this transitional period, Amazon wants to sell eBooks and brought out the Kindle to improve the user experience for that activity and Apple wants to sell iPads so it sells books and distributes Amazon's Kindle app. It's a good time to be a reader, if one has embraced eBooks.
Question?
You can browse the web (in a fashion) on the Kindle 3 over Wifi.
Can you also browse the web using 3G?
iBookstore - rubbish selection, expensive books
UltimateKindle.co.uk did a quick investigation comparing and contrasting the Kindle Store and the iBookstore. We found that, at the time of the investigation, iBooks only stocked three of the Sunday Times bestsellers whilst the Kindle stocked all ten. The average cost of those books at iBooks was £5.66, compared with £3.14 in the Kindle Store. It's really not surprising that iPad users are using the Kindle app more than the iBooks app!
Makes a lot of sense
I've got an Android phone and have installed the Kindle app - it really is a good bit of software, and with the prices of ebooks on Amazon sometimes £4-5 cheaper than some other book stores (Waterstones and WH Smith spring to mind) it's working out well. I am also looking to get a cheap tablet as a Christmas present to myself and the Kindle app will be one of the first I load on it.
Don't forget though that there are even cheaper (free), readily available books on the Internet - just check out Gutenberg or the Internet Archive for details.
