I've been mulling the matter of what it will take for an ereader vendor to survive in the current North American market and I'm thinking there is a need to address *four* specific aspects.
1- Quality Hardware
2- A stable, recogizable, consistent, *hardware independent* software platform
3- A competitive flagship ebookstore
4- Mindshare and/or retail presence
The first one is a given; different folks might have different ideas of where quality ends but I think we can all agree it starts with solid, stable reliability and after purchase support.
Number two is a lot subtler and the key to Amazon's rise. (Oprah Winfrey aside.) And to Nook's meteoric rise from zero to solid second in barely six months. Amazon recognized that readers read on multiple readers.
That consistency and familiarity across hardware is a compelling feature for a product line. That ebook readers are more a software app than they are hardware. That providing the same branded experience across hardware (even some not your own) extends your device's ecosystem. Amazon's strength isn't their hardware or even their ebookstore but rather the pervasive, *easy* access to their bookstore. Everything else, even the reader hardware and software functionality, is secondary to bookstore access. Hence their apps for smartphones, PCs, Macs, tablet, webpads, anything with a screen by the time they're done. B&N has embarked on a similar path, even licensing that ebookstore access to other device manufacturers (Ectaco, Pandigital). The software plaform is, in many ways, the real product. Just as on PCs where, more often than not, Windows is the product and the hardware just the packaging. More than anything else, platform thinking is going to be critical moving forward.
Third, if ebookstore access is important, obviously a flagship store is a must. As ebooks become mainstream products they are being purchased by people who are not familiar with the territory, who don't frequent online ebook sites and ponder how many ebooks can fit on a pinhead. (Guilty as charged.
) The worst question they could be left with is, "Where do I get books for this thing?" Amazon's answer is, of course, their own store. B&N and its licensees have a similar answer. Sony has their own store. But this is one area where the other vendors relying on Adobe ADEPT ebookstores at at risk. Being store agnostic means no quick answer. This may be problematic over the next year or so.
Fourth is the matter of mindshare. It's all about access to the potential customers outt there. For the first two-plus years, Amazon advertised Kindle nowhere. Then they pulled the coup of the ages by overnight turning an obscure hobyist gadget into the talk of Oprah Winfrey viewers all over the land. They went from near zero to nearly 100% brand awareness overnight. Since then they have added soft-sell image-building TV ads and are not moving into retail sales through B&M stores. B&M store sales means channel conflict and margin issues but it also means cold sales and impulse buys. And even greater mindshare.
Over the last month or so, since B&N announced the Nook WiFi, the industry has entered a new phase. In the US only at first, since B&N does not sell outside its home turf (yet), but as of this week the new regime has gone international with the Kindle WiFi. Upfront, the focus has been on price, which does make the prospect for competitors seem dimmer than it really is. The true change in the market is that competitors now need to focus; focus their product on very specific buyers, focus their message. (*This* is what we do, this is why *you* need us). There is little room for "fly-fishing marketting"; announcing a product, setting up a website, and waiting to see who bites. There's trawlers out there.
Pocketbook Global is (today, at least) probably in better shape than anybody not named Amazon or B&N. I have no insight into their economics, of course, but from the outside a few things are clear:
1- The hardware is generally solid and well-supported; they understand there is a future after the first sale.
2- They already have a platform strategy. It is limited to their branded hardware but they do have an established software platform to build on.
3- They are addressing the ebookstore issue in at least some markets. NorthAmerica still needs a flagship store. Store agnosticism isn't going to help much in this market, I fear.
4- Mindshare is their biggest hurdle, especially in NorthAm; retail presence the biggest challenge. There's still some 30 million potential buyers in the US alone but first they need to know Pocketbook exists. And need to see what is good about it. And where to get it. Most of those buyers are *not* going to spend weeks or months doing online research for ebook readers. Most are just going to walk past a display, wonder if they might not enjoy a reader gadget, maybe wait a while to mull it over and then make the rounds of the big box retailers; they will buy ebooks the way they buy other electronic gadgets. Online will be a part of it; a lot of consumers are used to online shopping by now. But online can be hit or miss. Especially with the specter of the "Big Names" floating out there.
Mindshare is going to be tough outside the "Big Three" brands. Especially without B&M presence. Even Amazon knows online is not enough. B&M partners are a must; shelf-space significant.
Looking at the competitive landscape, I think most of us round these parts can look at the four pillars and see which products can most solidly check off the most requirements.
Some might be surprised to see it is Nook and not Amazon that is best positioned today; Amazon isn't just playing catch-up on price, they are playing catch-up on B&M presence. They have mindshare, they have installed base, but a lot of people need to see things in their hands before buying. Even if they end up buying online.
Conversely, the worst-positioned and most vulnerable are the OEM "badge engineers" like Cool-er. (Now gone.) Some lack even a unified software platform, simply buying different models from different OEMs. Not looking good there.
And Adobe is, literally, no help.
The ADEPT ecosystem lacks presence on tablets, webpads, smartphones. There is no cross-device synchronization which, while not indispensable (yet), is a hallmark of the big name ebookstores. Adobe makes money off the reader apps so they are not about to "compete" with their partners by putting out a free ADE for Android or Blackberry, much less iPhone/iPad/iTouch. But that means there are ceding iPad owners to Apple, Amazon, and Nook.
The delay in getting the promised B&N eReader DRM compatibility out to customers of other ADEPT licessees isn't helping the ADEPT ecosystem either. It is, instead, heling prop Nook up as *they* can read ADEPT ebooks from all sources while theirs are only readable on Nook (and their licensed partners--think about it, B&N is licensing access to their bookstore. Isn't Adobe supposed to be doing that?).
Factor in Apple's DRM-fork of the ePub community and the ePub standard is starting to look like *three* standards with ADEPT lagging the other two DRM camps. Which *not* good. Amazon doesn't need extra help. And right now, folks that prefer multi-function devices for ebook reading (and they are many--just ask Apple) can get *free* Kindle apps on overything this side of WindowsCE. Nook almost as many. And ADEPT? Zilch. (The Txtr app for iPhone is about it and I heard it had issues on iPad.)
As I said in my post above, Adobe needs to step up for their licensees. And fast, as time is of the essence. The single biggest ebook reader market is still in play. There is room for competition, to slice off major chunks of the market with premium features, better support, focused marketting. But NorthAm won't be in play forever.
iPad is out and killing everything north of $399.
Android webpads are not great yet but good ones will show up sooner or later as will good Windows tablets (early next year most likely).
Sooner or later, the premium device market will get hemmed in into nichedom.
At that point, only the biggest will survive.
The meaning of the new price point isn't necessarily that vendors need to get cheap *now*, but rather they need to get *big* now so they can go cheap later.
The future of eink devices is small and cheap. Small is easy; cheap isn't.
The future of eink device vendors is big or none at all.
The clock is ticking.