From Paid Content:
As the ebook transition moves forward, Amazon should worry that Kindle is not going to be the device leading the revolution. Apple and iPad will cut into its growth.
. . . .
U.S. book publishers are reporting slowing sales of adult ebooks: What was once triple-digit growth has fallen to the double digits. The revolution has also been largely limited to text-based titles — adult fiction and nonfiction — and categories like cookbooks and travel haven’t seen nearly as much growth from ebooks.
If the digital market for certain kinds of books is settling, as it appears to be, Amazon will have to find growth in other areas (though it doesn’t have to, and likely can’t, sustain 70 percent ebook growth for long). The company can expand Kindle internationally, as it’s been doing already, and it can still grab a certain number of ebook newbies.
Link to the rest at Paid Content
This article is similar to many commentaries about Amazon and its book sales.
As Amazon or any other successful seller of goods and services grows, its percentage growth in sales becomes smaller because it’s being calculated on a larger base. 100% sales growth from $500,000 to $1 million is wonderful for a $500,000 company, but it’s a different thing than growing from $1 billion to $2 billion or from $10 billion to $20 billion.
Outside of Amazon, is anybody in the book business growing at 70% annually?
Barnes & Noble? Nope, treading water while it closes stores right and left.
Big Publishing? Nope, not anywhere close to 70%. It has no stores to close, but continues to consolidate and lay off employees.
Apple? Definitely nope. iBoostore is stuck at #3 behind Amazon and Nook and is cementing its image with readers as a perennial also-ran. Does anyone know a serious reader who doesn’t have the Kindle app installed on his/her iPad? As PG writes this, he wonders how long it will be before Kobo begins to challenge Apple for #3.
Apple is the most extreme example of the problem a company faces when it tries to maintain high year-to-year growth rates. In terms of sales, Apple is primarily a phone company, but that business is in jeopardy. The iPhone is looking dated next to the latest handsets from Samsung. World-wide sales of Android devices now exceeds sales of IOS devices with the iPhone falling farther behind with each passing quarter.
Apple doesn’t do price competition which is a fine strategy so long as it can find megabusinesses it can disrupt with extraordinary hardware devices that lock in a giant market for associated content. Once a technology reaches the point where price competition becomes a reality (and all technology does that), Apple is in trouble because it can’t support its historically sky-high valuations with commodity margins on hardware sales.
The iPad is a fine device, but it’s nowhere near as large a seller as the iPhone is and unlikely to become such. It’s facing increasingly serious competition from lower-priced devices, including products from Amazon. Just as the iPhone isn’t looking all that much more impressive than Android competitors these days, the iPad is headed in the same direction.
The Apple of today is built upon three genius inventions by Steve Jobs – the iPod, the iPhone and the iPad. Unless there is another presently unidentified Jobs-class genius floating around Apple, it won’t have another invention of this caliber to ride.
The most recent product launches for both the iPhone and the iPad were merely evolutionary and didn’t generate the kind of consumer excitement required for long-term premium pricing. PG believes there is a good argument that the 7-inch iPad was launched without Apple’s best screen in a clumsy attempt to make a sort-of pricing response to Amazon’s tablets.
PG is not alone in his concerns about Apple’s future. The stock market is very worried about Apple, cutting its stock price by about 36% in the last five months.
Once the consumer market moves past the stage where it pays a substantial price premium for a genius hardware invention, Apple’s market dominance will decline substantially. For an example of iPad’s future in 2-3 years, look at personal computers and Apple’s 10-12% market share in this mature market.