Amazon is destroying e-reader innovation

[fjtorres]

Originally Posted by Rizla

Yeah, that's interesting. When did amazon stop manufacturing the dx?

Around the time the lawsuit killed its already fading academic prospects.
Circa 2011. The thing is even older than the Nook ST. Basically it is 3 Kindle generations behind the curve.

[QuantumIguana]

Originally Posted by Rizla

Are you saying Europe and Asia are small markets? Or even teeny-weensy Germany?

Regardless of the population size,if not many want that product, it is a small market.

[AnemicOak]

Originally Posted by Rizla

And yet they are available in Europe. In addition, there are a lot of alternative e-ink devices available in Europe and Asia. Whereas in the US, all we have is...the Kindle!

The only significant difference I can see between the US and European market that might cause this is Amazon's dominance...

The US market had those alternative eInk devices (Pocketbook, Onyx, Cybook) and there apparently wasn't enough interest for the places selling them to continue doing so. Anyhow they are available in the US, you just have to order them from Europe. As I'm sure a lot of people in Europe who may be interested in such a device have to order one.

[fjtorres]

Originally Posted by QuantumIguana

Regardless of the population size,if not many want that product, it is a small market.

Correct.
Market size is a function of the number of actual or likely buyers, not population.

The market for iguana meat, for example, is much smaller in the US than in Panama.

[Rizla]

I think what you meant was not market size, but available market-share. It comes back to dominance of the market by a single product. Obviously Germany and France, etc, are huge markets, and yet smaller companies can thrive there. The difference between Europe and the US is that a single company is not yet dominant there, thus allowing smaller companies to introduce innovative products.

The UK is an exception where amazon is utterly dominant and their is no available market-share. France has Cybook, Germany has Tolino, the UK has nada. Though there may be other forces at work in the UK that stifle innovation.

The most innovative products appear to be coming out of Russia and the Far East, where Amazon has barely penetrated.

[Rizla]

Originally Posted by AnemicOak

The US market had those alternative eInk devices (Pocketbook, Onyx, Cybook) and there apparently wasn't enough interest for the places selling them to continue doing so.

It's telling that none of those products are American, and that they continue to prosper in the non-Kindle dominated European markets. They couldn't start here, and they couldn't survive here, because of the Kindle.

[DiapDealer]

If you're already entirely confident of your premise and have no intention of even entertaining suggestions to the contrary, then why the discussion? What's the point of the thread beyond what the title states?

Enjoy your infinite confirmation bias loop.

[Katsunami]

Originally Posted by Rizla

It's telling that none of those products are American, and that they continue to prosper in the non-Kindle dominated European markets. They couldn't start here, and they couldn't survive here, because of the Kindle.

The non-Kindle dominated markets very often don't even have the option to acquire one, or it's round-about through Amazon US, playing up to €40 extra compared to UK and DE prices, like in the Netherlands.

[Lemurion]

Originally Posted by Rizla

I think what you meant was not market size, but available market-share. It comes back to dominance of the market by a single product. Obviously Germany and France, etc, are huge markets, and yet smaller companies can thrive there. The difference between Europe and the US is that a single company is not yet dominant there, thus allowing smaller companies to introduce innovative products.

The UK is an exception where amazon is utterly dominant and their is no available market-share.

No, I think fjtorres and QuantumIguana mean market size, not market share. The market for e-ink readers, and LCD tablets, is not the same as the market for Android e-ink tablets with Bluetooth functionality that can also act as a monitor. That's a specialized use case and most people don't need a device that meets it.

It's a very small market, arguably so small that the overseas manufacturers, in conjunction with gray-market imports, have basically covered the entire market.

Not enough people want one; if they did the devices would be more widespread, less expensive, and regularly imported to the US. Amazon would probably release one.

It's just not logical to blame this on Amazon.

[fjtorres]

To assume that a region's population defines it's market size for a given product is to assume that consumer priorities and values are the same everywhere. They aren't, obviously.
That is where the concept of natural market size comes in: natural market is about the fraction of the total population that can benefit from the product.
The natural market for ebook readers is that fraction of the total population that reads enough to justify the upfront cost of a dedicated reading device.
The actual market for the product is a subset of the natural market that reflects the product's penetration, the fraction of potential buyers who choose to buy or might be persuaded to buy.
There is nothing universal about natural market size: it depends on things like culture, income levels, custom, demographics...
The buy-no buy decision is always personal and just because somebody might benefit from a product doesn't mean they will. Which is why two equally affluent countries end up with different market sizes for the same product.

US vs Europe? Eink readers?
Easy: reople were buying eink readers in both regions at comparable rates up to 2009.
Then, commercial ebook buying in the US exploded...and it didn't in europe.

The US market for ereaders growth has been driven by commercial ebook buyers since 2010. That is when the price-fix conspiracy kicked in and Nook switched to near-cost pricing. Amazon then matched it. Cheap ereaders meant it was easier to justify the dedicated reading device so the natural market grew. Another side effect of the conspiracy was that as ereaders got cheaper and BPH books got more expensive, indie titles became respectable. And respectable (cheap) indie titles feeding cheap ereaders grew the market even more.

The result was what Bill Gates calls a virtuous circle: cheap ereaders drew in readers who bought cheap reads, drawing more authors and increasing the supply of cheap reads, which helped increase volume/drop manufacturing costs of the gadgets. Key beneficiary? Amazon. They didn't really start the spiral, but they were the best placed to take advantage of the 2010-12 boom.

Europe?
Except for the UK, no boom. Ebook sales run in the 3-5% range of the total market, which is still dominated by traditional publishing houses. No massive influx of readers. Clearly a different ereader user profile. One that cares about interoperability and hardware more than the typical US user, for starters.

For all the griping about Amazon and walled gardens, it is those walled gardens that launched the boom that now has ebooks at about a third of the US market, Amazon at two-thirds of ebook sales, and indies at 40% of Kindle ebook sales volume. Indies are at about a billion dollars in annual sales, if you go by reader spend.

Anyway you look at it, the customers behave different; the markets are different and the sales mix is different.

And growing even more different: a lot of readers are increasingly getting into ebooks via apps on phones and tablets rather than ereaders so the US/UK experience is unlikely to recur. Moving forward, content is going to matter even more and hardware even less.

Want to blame Amazon? Go ahead. They have been pushing content and apps from the beginning, after all.

But it's really just basic economics: the primary product--the reason consumers act--is the stories, the books. For most buyers, Ereaders are just a means to get to the stories. Added features are optional and for many the ereaders themselves are optional.

[Rizla]

Originally Posted by Lemurion

Not enough people want one; if they did the devices would be more widespread, less expensive, and regularly imported to the US. Amazon would probably release one.

I don't think so. Amazon make profit on content, not devices. I wonder how well the DX sold? Maybe the devices sold okay, but didn't generate enough content sales. Amazon go for the big margins. Even if they made a profit on the DX, they may have dumped it for bigger pickings.

[Rizla]

@fjtorres. I agree with a lot of what you have said. However, the jury is still out on the European markets. It will be interesting to see how product choice and innovation develops (or atrophies) as the market for e-books increases. The data is not there yet.

As it stands, even with their comparatively small e-book sales, the European markets display greater choice of device than the US market. That's counter-intuitive. One would expect greater choice with greater demand, not less. But then your previous arguments would argue against that. As the market grows, so one product locks-in and stifles choice (and innovation, at least in this case).

[Rizla]

Originally Posted by Katsunami

The non-Kindle dominated markets very often don't even have the option to acquire one, or its round-about through Amazon US, playing up to €40 extra compared to UK and DE prices, like in the Netherlands.

It's the same situation in the US when buying a device imported from abroad. The devices are more expensive than the Kindle to begin with because the Kindles are subsidized by content sale, and then there are the various other costs of importing on top of that. It's a bit of a show-stopper for most buyers.

[Lemurion]

Originally Posted by Rizla

I don't think so. Amazon make profit on content, not devices. I wonder how well the DX sold? Maybe the devices sold okay, but didn't generate enough content sales.

So you're saying that if more people wanted large-screen Android e-ink tablets, they wouldn't be more available? That demand doesn't drive supply?

As for your question of how well the DX sold, while we don't have any real numbers, we do have some pretty good evidence that they didn't sell that well. They basically stopped producing them years ago, and they're still finding new stock to sell in the warehouses. That's never a sign of good sales.

Just because the devices are not Amazon's major profit center does not mean that they are exempt from accounting. Sales still have to justify the investment of producing them.

The less something sells, the weaker the incentive to produce it, even if it isn't a primary profit center. It was simply in Amazon's best interest to devote their R&D investment budget to the Fire and Paperwhite, rather than the DX.

Not enough people wanted them to make it worth their while to update them.

[fjtorres]

Originally Posted by Rizla

As it stands, even with their comparatively small e-book sales, the European markets display greater choice of device than the US market. That's counter-intuitive.
.

Not really.
Technology product categories behave exactly like that in their immature phase. In most every emerging consumer tech category for decades (calculators, digital watches, video game consoles, PCs, media players, etc) the pattern has been the same: a seminal product establishes the commercial viability, dozens or hundreds of small players jump in, a clear leader emerges that takes the product mainstream (not always the prime mover), the smaller players follow the leader (cloning it if possible) producing a bubble followed by a collapse and consolidation.

As far as the US is concerned, we are in the consolidation phase. The switch to near-cost pricing brought in hordes of ebook-focused buyers and switched the focus from the hardware to the books.

In the continental markets they still haven't reach mainstream acceptance and without mainstream acceptance and a clear market leader, there is more room for variation and the small players haven't grown or been weeded out. It is possible ebooks never reach mainstream acceptance just as it is possible that they do but dedicated readers don't. (There have been hints that in India cellphones are the vehicle for mainstreaming ebooks.)

Each market and each region is different, they tend to develop differently even when they end in the same location. Which is never guaranteed. (Look at the auto markets, re: fuels and engine designs.)