Kindle Fire Makes Apple Sweat E-Books
Jan 3, 2012 2:58 PM PT
Apple will hold an event in New York at the end of the month at which it will make some sort of media-related announcement, according to a recent AllThingsD report.
Whatever news Apple shares at the event, it may relate heavily with advertising or publishing, because Eddy Cue is said to be involved. Cue's in charge of several of Apple's media units, including the iTunes Store, iBookstore and the company's iAds platform.
The report sparked a swirl of speculation, with some observers suggesting Apple might announce new deals with major publishers or unveil changes to iAd that would make it more appealing to ad buyers.
"It's all rumors; there's nothing concrete at this point," Jeff Orr, a senior practice director at ABI Research, told MacNewsWorld.
"Obviously, [Apple's] incredibly good about keeping things secret, so I don't know for sure," Bob O'Donnell, a program vice president at IDC, remarked. "Maybe they have a new arrangement for electronic books."
Speculation about the announcement being related to publishing makes sense, added Charles King, principal analyst at Pund-IT.
Apple did not respond to requests for comment for this story.
Fire in the iPad Hole?
If those guesses are indeed pointed in the right direction, Apple may be reacting to the spectacular success of Amazon's Kindle Fire.
Amazon recently announced that, throughout December, customers purchased more than 1 million Kindle devices per week. It also said the Kindle Fire is the best-selling, most gifted and most wished-for product on its website since its introduction just over three months ago.
The Kindle Fire might have taken a couple of million units' worth of sales from the iPad, said Morgan Keegan analyst Tavis McCourt. He toned down his estimates for Apple's fiscal Q1 results because of this.
"For the past two years, we've seen Apple being essentially unchallenged in the tablet market until the arrival of the Kindle Fire," Pund-IT's King told MacNewsWorld.
In addition to threatening the iPad as a device, the Kindle Fire could, if it's successful, "effectively shut out Apple from the publishing industry in the same way Apple has shut out other platforms," King suggested. "Once you have the de facto platform for a given type of media, it's very difficult to shake vendors loose from it."
Going Down the Side Roads
It's arguable that the Kindle Fire does not compete directly with the iPad per se. It is offered as a platform for selling Amazon.com's content rather than a general-purpose tablet like the iPad and many mainstream tablets.
However, content availability is also an important factor for tablets, and it could be that Apple is seeking to sew up another form of content to either block off the Kindle Fire or tackle it head-on.
Back to School?
That other form of content might be the education market. The company's former CEO, Steve Jobs, reportedly told biographer Walter Isaacson that one of the products he wanted to reinvent is textbooks.
Some educational institutions have been experimenting with e-textbooks for some time. At the University of Evansville, nursing students use e-books on the iPod touch and computers, while the University of Michigan has incorporated e-textbooks from CourseSmart into its Sakailearning management system.
CourseSmart also offers a mobile Web app for the Kindle Fire, iPad and Android tablets that provides access to more than 20,000 e-textbooks.
In July, Amazon.com launched its Kindle Textbook Rental program. This lets users rent tens of thousands of textbooks from various publishers for between 30 and 60 days with optional extensions.
This program would save students up to 80 percent of the textbooks' list prices. They can store margin notes and highlights in the Amazon Cloud and can access their notes if they re-rent or purchase the books later.
Barnes & Noble also offers college students e-textbooks through its Nook Study program.
Apple began offering e-textbooks on the iPad from McGraw-Hill, Harper Collins, Simon & Schuster and other publishers when it launched the iPad last year, but the venture has received little media attention since.
Cupertino could be revving up to take on the competition.
"It's possible [Apple] may have a new arrangement for electronic books," IDC's O'Donnell told MacNewsWorld.