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

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Apple Discovers the Key to iBooks Success — iBooting the Competition? Listen to this article

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

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 determined.

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!

Amazon:

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.

B&N:

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.

Kobo:

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 as 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.

Sony:

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 yea, 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!

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About the Author

Zek
Zek has been a gadget fiend for a long time, going back to their first PDA (a Palm M100). They quickly went from researching what PDA to buy to following tech news closely and keeping up with the latest and greatest stuff. They love writing about ebooks because they combine their two favorite activities; reading anything and everything, and talking about fun new tech toys. What could be better?