Summary
While openness and innovation is all the rage, a tightly integrated solution, at the hardware and software levels has proven a real success, and that is why Apple potential e-reader captures the buzz.
Analysis
The e-reader is a new device category which will find its market quickly, particularly if, as it seems now, there are actually books one wants to read available.
Thanks to Amazon collection, and Google's work in libraries, there will be a vast array of books available either free or for a fee, and good quality monitors to read these books on.
As for the music industry, there are 3 main drivers:
- Space: few can store physically an ever-growing music collection
- Snacking: trying out new music minimising personal engagement
- Convenience: taking music everywhere and playing it on different devices
Apple has taken the market by storm with its iPods, iTunes and iPhones, not due to amazing innovation, high specs devices and solutions, but by giving the market a premium product, tightly integrated at the hardware and software levels. The solutions are proprietary to Apple to be able to control as much as possible of the value chain and customer experience.
This is what people have bought and loved. This is why the e-reader is met with such enthusiasm.
However, regarding the e-reader market, the market leaders will be the ones offering a quick and easy way to find out about new books, try, buy, store, share and read them. Content and ease of use are major components.
Amazon is well placed for this, given that it is its core business, but the Kindle does not have WiFi, and books cannot be used elsewhere,
On the other hand, the Nook, based on Android, has integrated WiFi, offers options to share books under certain conditions set by B&N, and read them on different devices such as smartphones, PC and Mac.
Sony has gone for various form-factors, partnership with OverDrive, and a cheaper price point.
As the competition stands currently, I would bet on 1. Nook 2. Sony and Apple and 3. Kindle. But all products and propositions are being developed, so this will change daily in the run up to Christmas when sales number will speak for themselves.
Thanks to Amazon collection, and Google's work in libraries, there will be a vast array of books available either free or for a fee, and good quality monitors to read these books on.
As for the music industry, there are 3 main drivers:
- Space: few can store physically an ever-growing music collection
- Snacking: trying out new music minimising personal engagement
- Convenience: taking music everywhere and playing it on different devices
Apple has taken the market by storm with its iPods, iTunes and iPhones, not due to amazing innovation, high specs devices and solutions, but by giving the market a premium product, tightly integrated at the hardware and software levels. The solutions are proprietary to Apple to be able to control as much as possible of the value chain and customer experience.
This is what people have bought and loved. This is why the e-reader is met with such enthusiasm.
However, regarding the e-reader market, the market leaders will be the ones offering a quick and easy way to find out about new books, try, buy, store, share and read them. Content and ease of use are major components.
Amazon is well placed for this, given that it is its core business, but the Kindle does not have WiFi, and books cannot be used elsewhere,
On the other hand, the Nook, based on Android, has integrated WiFi, offers options to share books under certain conditions set by B&N, and read them on different devices such as smartphones, PC and Mac.
Sony has gone for various form-factors, partnership with OverDrive, and a cheaper price point.
As the competition stands currently, I would bet on 1. Nook 2. Sony and Apple and 3. Kindle. But all products and propositions are being developed, so this will change daily in the run up to Christmas when sales number will speak for themselves.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
