Apple Discovers the Key to iBooks Success: iBooting the Competition?

(image courtesy Merchantville)

Earlier today Mike brought us the news that Sony’s Reader app was rejected from the App Store, and he did a great job of explaining how murky the whole story really is. Whether Apple purposely rejected the Reader app as part of a longer plan to cull all ebook readers from the App Store, or whether Sony brought the issue upon themselves by breaking the rules remains to be determine.

What’s more disturbing is the news from Techcrunch that Apple didn’t directly deny the possibility of cracking down on the ebook app “browser trick”, where book purchases are done by bouncing to the browser and then back to the app. This neatly dodges Apple’s in-app purchase requirements, aka paying Apple 30% per purchase. If Apple really intends to force this, it means they’d either like to get 30% of every piece of content on iOS, and/or they’re trying to drive out the competition to improve iBooks chances of actually making a dent in the ebook world.

So what does this mean for the existing ebook players? Who’s in a good position to fight back and who is sweating bullets? Read on for my thoughts!


I think they’re in the best position, based on marketshare and sheer cash base. Amazon has a number of moves they could make if Apple booted the Kindle app. For starters, they could drop the price of the Kindle significantly, making it an easy add-on to any gear bag. In addition, Amazon has spent the last few years watching consumer spending patterns and they know how their customer base works. It would be easy for Amazon to offer “free Kindle with Prime membership”, or “free Kindle if you purchase 10 Kindle ebooks”. Not to mention, thanks to Whispersync, Amazon could literally re-create your Kindle on iOS bookshelf on a new Kindle, right down to the page you left off at…imagine the “iPad to Kindle” conversion special, where Amazon does the initial registration and setup, and when your Kindle app goes dark, your new Kindle can be purchased and pick you right up where you left off…

Not to mention, given the overall success of the Kindle apps, it’s an easy sell for Amazon to encourage people to buy Kindles. I think Amazon might still be considering a tablet, but I don’t see them immediately swinging against Apple with a rival tablet. Down the road for sure, but as an immediate damage control reaction Amazon will likely promote the heck out of the Kindle hardware. Remember, though, in the end Amazon is in the content business; they’re happy as long as you’re buying books, and if you aren’t buying books on your iPad they’ll find another way to sell them. What Amazon won’t do is give 30% to Apple, and they have plenty of resources to avoid that fate.


In the end they’ll be ok, but they don’t have the resources Amazon does. So while we might see a NOOK/NOOKcolor price drop (especially if Amazon drops Kindle prices), I think they’ll try to leverage their in-store services over flashy price drops. B&N clearly has a high comfort level with Android, and I wouldn’t be surprised if they moved to extend their “read in-store/coupons in-store” to Android and other smartphone apps as well. B&N has also struck one-off deals preinstalling NOOK software on some devices, and they may pursue that more aggressively if they lose iOS.

One thing that insulates B&N a bit is their book business. They don’t have the marketshare Amazon does, but they do have access to book-buying consumers, and premium members who have B&N book memberships. Unfortunately, the agency pricing model won’t allow B&N to offer a flat discount through their memberships, but there’s no reason they couldn’t absorb the costs and give away a free ebook or two with B&N premium membership. And while they’d run into all sorts of issues offering discounted ebooks with paper book purchases, they COULD do it with public domain titles as a summer reading tie-in. The point is, like Amazon, they have resources and reach that would let them strike back and face off against the loss of exposure from iOS.


I worry more about Kobo. While they have a strong presence on several platforms, they’ve spent a great deal of time and effort really polishing their iOS offerings, and losing all that effort would be a blow for them. In addition, their Kobo reader doesn’t have the same robust wireless sync capabilities of the NOOK and Kindle, so transitioning people from iOS to an ebook reader would be an uphill battle.

In addition, Kobo’s main exposure in the USA (Borders) is struggling to survive, so they can’t count on pushing in-store options like B&N can. The two bright spots for Kobo are that they’ve been very aggressive about preinstalling Kobo software on various Android devices, plus Kobo has been very quick to move on every major ebook trend. I joke about this quite a bit, but it seems every time Amazon or B&N rolls out some flashy new ebook feature, Kobo has as well, yet they get 1/5 of the attention. While flying under the radar might make things tougher if the big ebookstores are fighting over the non-iOS market, they can go toe to toe with the big guys for features, and that MIGHT give them some leverage.


Oddly, despite Sony’s Reader app kicking off this firestorm, Sony’s probably the least affected. They are far better known for their hardware than their ebookstore, plus as it is the app is two years too late! Sony has never pushed their ebookstore offerings, and the release of the Reader apps seemed more of a realization that content was becoming important. But it’s not like they’ve been building their brand on tablets, so while they lost an opportunity they aren’t losing a cornerstone of their business model.

Freebie/non-affiliated apps:

Obviously apps that cater to free ebooks aren’t going to harmed. 30% of $0.00 is $0.00. This might be an opportunity for them if they’re the only ones left besides iBooks! I do wonder if Apple will go after the apps that let you sideload your own books (like Stanza) if they take eyeballs from iBooks.

The future:

Obviously this is all conjecture. Sony could have made a mistake, or it’s a rejection with more behind the scenes than we thought. An ebookpocalypse where Apple runs all the competition out of iOS-ville may never happen. But if it does, this is just my opinion on who’s positioned well and how they might survive. If it happens in a year, after an army of Android tablets have marched in and grabbed marketshare, the effect may be more muted. We’ll have to wait and see…

What’s your take on what might happen? Share your thoughts below!

Categories: eBooks, Editorials

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8 replies

  1. Like Michael said, we don’t yet know what Apple’s plans are, or what their motivation is, but I think they would be better served improving and increasing their iBook offerings, rather than playing software and marketing games with Amazon et. al. I think iBooks is a nice piece of work, and have been interested to see other apps copy some of its features, but it falls down when it comes to its library.

    (I also do *not* understand why, in their book list–when you’re not using the “bookshelf” interface–you don’t get an alphabet down the side like you do in nearly every *other* Apple app that contains long lists of things, like the Contacts list, and a song list. It’s a stupid omission. And irritating.)

    • Except Apple’s later comments, re: in-app purchasing made it clear if there’s a browser workaround they also want an in-app payment system. Essentially they want the option to charge a 30% toll to every ebook app for having the audacity to make money without Apple.

      That’s why I thought it was interesting to start a conversation about who would be hurt if Apple actually went through with that threat; it’s likely they may try, and I doubt any ebook maker wants to possibly take a 30% haircut on each in-app sale just to have access to iOS. So what’s their plan b?

      And as far as iBooks goes, I’ve never used it. But aside from some eye candy, is there any feature they offer that’s worth copying?

  2. RT @GearDiarySite: Apple Discovers the Key to iBooks Success: iBooting the Competition?

  3. Apple Discovers the Key to iBooks Success: iBooting the Competition? #ipad

  4. GShared: Apple Discovers the Key to iBooks Success: iBooting the Competition?:
    (image courtesy Merchantville)

  5. I’ve long defended Apple on their right to restrict iOS app sales to an app store that they review, but I think that this policy – requiring that any app that allows an outside the app sale of material also be available in app, which just happens to give Apple a 30% revenue cut – is a huge mistake on their part. I think that original app sales are defendable to an anti-trust lawsuit, but rejecting apps that do not allow Apple to get a 30% cut in-app is bending that line too much.

    If the end of this is that Amazon’s Kindle app and Nook’s app are not allowed to be refreshed with material from outside the app store, I think this is the straw that breaks the anti-trust back. I’ve been considering an iPhone upgrade on Verizon when my time comes, but if this sticks I will definitely stay with Android.

    And while I don’t even read all that much on these apps, I do it enough that it matters to me.

    • Totally agree. I think this would be remarkably shortsighted and would reflect the downside of not really caring what the “world out there” thinks. Since i use my iPad for pretty much everything these days I would really have to rethink getting the iPad 2 and might well look to an Android tablet… Unhappily but I would.

      That noted, things have not YET changed for the Kindle app so this is all conjecture.

  6. Until recently, the iBook dictionary was far superior to B&N and Amazon’s offering; it was really more of an Encyclopedia than a dictionary, honestly.. Now, I prefer Amazon’s, as it gives you a pop-up instead of taking you to a new page.

    For me though, as you know, “eye-candy” is important in an eReader. So the ability to turn off full justification is important, and for whatever idiotic reason, Amazon *continues* to not offer that. Being able to set the brightness from inside the app is a nice touch. Being able to go to the store without leaving the app is also good.

    I think Amazon has handled the “buy a book” situation pretty well, giving you a quick path back to the app, but I think their interface is genuinely ugly on the iPhone. I would buy only in Amazon if they would simply tweak a couple of things. And of course, in my view, the nook app is a major step *backwards* from the previous B&N eReader app (don’t get me started).