How many companies these days can create the buzz that Apple does when they announce a new product line? Having disrupted, transformed and gained leadership positions in the markets for music players and mobile phones, some are wondering if Apple will do the same to the markets for notebooks/netbooks and e-readers with it’s new iPad.
Steve Jobs certainly is targeting netbooks, stating at the iPad launch that “they’re not better at laptops than anything, they’re just cheaper.” CNet ran an interesting article, “10 things Netbooks still do better than an iPad.” Of these 10 reasons, I think the most interesting was the keyboard issue. While the iPad has a built-in touch keyboard similar to the one on the iPhone, it will be very difficult to use on your lap, on a table, or while you’re moving. Apple has provided an optional keyboard dock to address this, but at an additional cost.
I am one of those gadget hounds that prefers to have one gadget do everything for me. The iPhone has come closest to that so far. I use it to listen to music, watch TV and movies, read my Kindle books, and to access email and the Internet. I downloaded the WordPress app but never used it to blog because no matter how good I get at typing on the iPhone, there is a limit to how fast and accurate I can type. I just don’t use the iPhone if I have to write something longer than three or four sentences.
Maybe the keyboard dock will be so compact, seamless, and functional that this issue will go away. But I doubt it. I still don’t use a netbook because I hate carrying around an extra DVD player.
I think the more interesting disruption will be to e-readers, and specifically, to Amazon and the Kindle. PC Magazine had two competing commentaries: “How the Apple iPad Could Kill the Kindle” and “Will the iPad Kill the Kindle? Of Course Not.”
I bought a Kindle but don’t use it anymore. As I said above, I now read all my Kindle books on my iPhone. Is the screen small? Yes. Have I gotten used to it? Yes. It took me awhile, but it doesn’t bother me at all now. I actually like the ability to flip pages faster with a slide or tap of the finger than pressing a button on the Kindle. And, as I said, I like to do everything on one device if possible. Apple certainly could try and block a Kindle app for the iPad, but I don’t think that would pass anti-trust scrutiny.
So, I am a bit dubious as to whether Apple can dethrone and/or wipe-out the Kindle. Here are the reasons:
- Incremental innovation. Touchscreen devices are the future for portable devices. When the will become the majority of portable devices is unclear, but it is as inevitable as flat-panel TV’s and monitors replacing their large bulky counterparts. The battery life on a Kindle is amazingly long because of the e-Ink technology, which requires no backlight. But as I mentioned above, a touchscreen e-reader is much more functional than one with buttons, and thus the Kindle will likely introduce this capability at some point.
- First-mover advantage. Amazon has built a large and loyal user-base. Amazon is the largest book store on the planet. Their brand ranking is #43 (up 22% from 2008) to Apple’s #20 (up 12%) per Businessweek’s 2009 Best Global Brands ranking, Amazon’s book sales are an astounding 35% of all books sold in the U.S., including both print and e-book versions. Amazon makes shopping online amazingly simple. The iTunes store isn’t bad, but it isn’t as good as Amazon. iTunes has been built as a download store and player. I don’t think the Kindle app and store will be blocked on the iPad, and Amazon users won’t switch that easily.
- Game-on. They teach you something called “game theory” in business school. It looks at competition as a game, with each competitor anticipating what the other will do and planning counter-moves. At the end of the day, Amazon’s business is about excelling at selling things, with selling books their core competence. Apple’s core competence is about designing and selling amazing devices with user interfaces so intuitive and user-friendly they have been driving industry standards since Windows made the Mac interface mainsream. Amazon has already, or will quickly, make adjustments to their device (wee reason #1 above) and their e-book business model. They could give the device away as part of a book subscription (e.g., pay $150 a year and get the device for free and two free books a month).
A disruptive business model is just as important as product innovation. For example, read Disruptive leaders—Jeff Bezos and the Kindle for further analysis of Amazon’s e-book business model). This is especially true in the age of the internet and cloud computing. This will be a fascinating competition to watch. With Google’s Nexus One targeting Apple’s iPhone, and Apple now targeting Amazon’s Kindle, there will be even more competition, and with more competition, there will be more innovation and lower prices, which is good for us gadget hounds. Let the games begin.