Home » Amazon, Apple, David Gaughran, Ebooks » E-reader War Heats Up. How Can You Profit?

E-reader War Heats Up. How Can You Profit?

3 August 2011

Regular visitor, commenter and author, David Gaughran does his customary excellent job in analyzing where ereaders are going and what authors should do in response:

The big players are already jockeying for position in advance of what promises to be a bumper holiday season for e-reader, tablet, and e-book sales.

All the major manufacturers are expected to release new e-readers and tablets including Sony, Apple, Amazon, and Barnes & Noble. In addition, there are expected to be a range of devices from a selection of manufacturers tied to the Google platform.

While users of one device aren’t necessarily chained to the retailer’s e-bookstore, customers will tend to do most of their shopping there because it’s just easier. The one major exception to that trend was Apple.

Their uninspiring iBookstore never had the design chops (or popularity) of something like iTunes. In fact, it was never a priority for the company – the app wasn’t even shipped with the first batches of iPads and iPhones. When that app became the most downloaded of summer 2010, Apple relented and included it with all future shipments.

But they never moved many books. There was big fanfare in March 2011 when they announced they had “sold” 100 million books. This figure, of course, included free downloads. And when you factor in that they have sold over 100 million iPhones worldwide and 25 million iPads, this figure becomes a little less impressive.

. . . .

Apple belatedly followed through on their earlier threat to bar in-app purchases.

There is some confusion out there regarding what this means, and what effect it will have. But this is big news, and I’ll explain why.

Up until now, iPhone, iPad, and iPod touch owners were able to download the Kindle, Barnes & Noble, Google, or Kobo apps and purchase books through them. In effect, they will no longer be able to do so.

Instead, they will have to go through the relatively laborious process of opening their web browser, navigating to the site of the e-bookstore in question, searching for the book they want, signing into their account, then purchasing it.

You might not think this is a big deal. However, having worked for a major tech company, and conducted and participated in several usability studies, I can tell you that the more steps you add to a potential purchase, for every extra click a customer has to make before their payment is processed, the number of sales falls dramatically.

People are lazy. Especially online. They expect to be able to click once or twice and get what they want easily. If they can’t they will go somewhere else where they can.

All those iPad, iPhone, and iPod touch owners who read e-books will start using the iBookstore in their droves.

Amazon will lose market share. Apple will gain market share. I would imagine that Google, Barnes & Noble, and Kobo will also see a slight drop-off.

. . . .

Toys-R-Us have announced that they will start carrying the Kindle from Sunday, joining Walmart, Staples, Target, and BestBuy. OfficeMax and Fred Meyer Stores will start stocking the Nook from tomorrow, joining Walmart, Staples, and BestBuy, as well as all the Barnes & Noble stores.

Apple have their own network of swish retail stores, but their tablet can also be purchased at Target, Walmart, and BestBuy.

. . . .

All of these new products [being introduced during late summer into autumn] will be launched with wall-to-wall promo, both online and offline, both in all the above-mentioned outlets, and in the media.

If you are skeptical about what kind of numbers these devices will sell in, you should note that only 12% of the US population own an e-reader, and only 8% own a tablet. E-reader ownership doubled in the six months from November 2010 to May 2011, while tablet ownership only increased marginally.

Amazon are said to be producing 15 million Kindles, and they, historically, tend to be conservative in their production numbers.

All of these new device owners will want something to read, which is why the device manufacturers are all keen to tie their readers to their stores.

. . . .

If you are a writer, and you are wondering what all this means for you, or how you can best position yourself to take advantage of all these changes, I would suggest two things.

First, if you are not in the iBookstore, either by uploading direct, or through Smashword’s Premium Catalogue, make that a priority for all your existing titles.

Second, if you are spending a lot of time promoting and not so much writing, you might want to reconsider. This is traditionally a slow time of year for book sales (and e-books seem to be following that pattern).

Link to the rest at David Gaughran

Amazon, Apple, David Gaughran, Ebooks

12 Comments to “E-reader War Heats Up. How Can You Profit?”

  1. “This is traditionally a slow time of year for book sales (and e-books seem to be following that pattern).”

    Good to know. I’ve been wondering what’s going on, and what I might be doing wrong. Following Dean Wesley Smith’s advice, I’ve been putting more titles up, but haven’t seen a sales increase. Haven’t seen a decrease, either. Which means, I suppose, the new titles are helping.

  2. As always, Dave is on point. Apple has such closed-system policy for all their products, and this latest brouhaha over the Kindle app is another example. Why do so many hipsters love them?

  3. brendan stallard

    “Apple has such closed-system policy for all their products, and this latest brouhaha over the Kindle app is another example. Why do so many hipsters love them?”


    Heck knows. I used to travel a lot, internationally, and crossing borders always meant that I had to use another click from my allowed devices to access my content.

    Content from Apple isn’t retained on their server, for when you lose the digital file. Back-up monsters don’t get all superior here, we all lose data.

    I lose a smashwords file, no problem, go and download it again.

    I lose an Amazon film or kindle book, I can just go get it again. This is an enormous plus, and something Apple just don’t have a clue about, or they are calculating the churn.

    I can afford an Ipad/touch or whatever else the I is, but forget it. I won’t deal with the white devil anymore.


    • Like any shoddy product that enjoys good sales – Apple seems to have a good marketing department. Do you ever notice in movies that the main characters are always using a Mac? Seriously, it’s really weird.

      • Paul – Macs in movies demonstrate the marvels of product placement fees.

        I was watching a TV show the other night and two characters were drinking at a table full of Bud Light bottles, all of which had their labels turned toward the camera. Dollars from Bud to the producer made that happen.

      • The problem with that statement is that Macs and Apple iProducts, overall, are not shoddy — and more often than not, Apple has (at least for me) come through with repairs above and beyond the expected. (The second time they fixed my 140 — replacing it with a 145, ’cause they had no 140s left — we both agreed to leave the third-party memory stick out, even though it was Apple-approved, technically, and installed by a licensed Apple dealer. But after that… I have, honestly, never had a Mac die on me without cruel and unusual use. Don’t run SETI@home on a laptop for a year, never letting it sleep…) And, with that parenthetical exception, I’ve never quite run one into the ground. I’ve dropped my first generation iPhone at least a half-dozen times, and it continues to function, I have seen an iPhone with its screen all shattered and held together with some kind of tape — functioning.

        I’m not happy that Apple’s policy makes it more awkward to get to other ebook stores. I am, in fact, refusing to upgrade my apps from the versions which do the more direct link. But annoying policies that were there to get magazine apps to stop making in-app profit without giving Apple a sniff… Doesn’t equal shoddy hardware. Just annoying policy. Amazon has those itself (lack of ability to have a free ebook there at the start), but I don’t call their Kindle shoddy because of it. O:p

        I’ll take Apple sales (via Smashwords) as cheerfully as I take Kindle sales, or Nook sales. (I will also complain about the policy to them, ’cause I am concerned with how this will affect Stanza’s Smashwords link. (I suppose that they could allow browsing of all the free-only work.. If B&N and Amazon think that’s a loophole too, then they could presumably in-app link to their freebie pages… Which would mean that authors would really be behooved to have loss-leaders in the works…)) But I suppose if there are any authors who don’t want their ebooks on a “shoddy” Mac platform, all the more potential readers for me!

        • Beth – I have heard only a handful of people criticize Apple hardware.

          I checked out Apple’s bookstore when it first went up and was underwhelmed. I know a lot of people who use iPads to read Kindle ebooks in part because the Amazon store is so much better.

  4. I’m beginning to think ‘David Gaugrhan’ is the secret pseudonym of my DH.

    Seriously, David, I got this same talk over the weekend from the hubby about getting more content up before the Christmas season starts in earnest. *grin*

  5. I love being right 🙂 Uploaded all my stuff to Smashwords first. It’s a pleasure to use compared to Kindle/Amazon uploading process. Going to keep getting those books out there in the next few weeks.

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