Easter Round-up

Easter has come and gone, and big things have happened in the world of ebooks! Sorry about that, couldn’t help it. That really is a big creme egg. Apologies for my lack of posts the last week or so, the unholy trinity of Easter, moving house and my special lady friend leaving the country for two months has left me with little time to keep you up to date. But rest assured, I’ve been keeping up to date – so I can hopefully fill you all in on the interesting tidbits that have been floating around the ebook blogosphere of late.

Amazon still doesn’t have a tablet but everything indicates it is on its way – perhaps even as early as this year. Quanta, a Taiwanese notebook manufacturer, has reportedly received an order for between 700,000-800,000 tablets that have been traced back to Amazon for delivery in the second half of 2011. Now, don’t take this too seriously just yet, these kinds of rumours are rife when it comes to companies like Amazon and Apple. However, there is other evidence. E Ink, the company behind the technology that powers the Kindle, Sony and Kobo readers, has announced that there will be no improved displays this year, which suggests that Amazon may not launch an update to last year’s Kindle 3. Amazon has also taken a commanding position in the Android operating system community (the OS that runs on the majority of modern smartphones manufactured today) by releasing their own version of an app store for Android devices. Unlike Apple’s iOS devices (iPhones, iPod Touches and iPads), any company can set-up shop on Android. Amazon are pitching their marketplace as a more curated (read: Apple-like) alternative to Google’s in-built and often chaotic Android Marketplace. Like Apple, Amazon has access to millions of credit cards and a very slick one-click ordering system. Along with the Kindle app, this puts them in an excellent position to launch a reader-centric easy-to-use tablet for readers who aren’t swayed by the single-function Kindle readers (but who don’t want to buy an iPad). Stay tuned for more news on this topic – definitely something to keep your eye on.

Apple seems to have relaxed their grip on the reins just a tad in their own App Store. News surfaced this week that Apple has struck a deal with Time in which they will allow use of their in-app subscription service (i.e. magazines that auto subscribe to new content) for free to existing Time magazine subscribers (that covers Time, Fortune, Sports Illustrated and others). Previously Apple had forced magazine publishers to charge a separate subscription for iPad readers, thus ensuring they were the ones to collect precious subscriber information and a 30% slice of the revenue. It’s too early to tell if this reflects on a general loosening of the restrictions on content publishers in the App Store – but we should all keep our fingers crossed.

The Association of American Publishers released figures suggesting that of all trade books sold in February 2011, ebooks were the highest sellers. The surge has been attributed to recipients of Christmas e-readers stocking up on reading material, but it’s still a great result for ebook enthusiasts. Regardless of how the AAP reached this figure, it’s now impossible to deny that ebook sales are moving faster than most industry insiders had estimated (at least in the US). This was followed by the announcement by Hachette (one of the oft mentioned Big Six US publishers) that ebooks now account for 22% of the US arm of the company’s revenue.

Closer to home, our very own Booku has announced that despite expectations that they would lose money in the first twelve months they already have a positive cash flow. Ebook sales are startlingly good for a new start-up in this space – proving that there is an appetite for ebooks sold by Australian retailers.

Well, that about covers the major developments of the last couple of weeks. Stay tuned for more regular posts. Same bat-time (or a series of other similar times), same bat channel.

Apple Screws the Pooch Pt 2

It was either ‘Apple Jumps the Shark’ or ‘Apple Screws the Pooch’. But which do you prefer – the scary apple or the adorable puppy?

This is the second part of a two-part article. To read the first part, click here.

Here’s where Apple made even me suspicious. In its clarification yesterday, Apple said that it isn’t only in-app transactions that it is forcing onto its system, but any transaction. To use Apple’s own words:

We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.

This great big steaming pile of crap basically means that any platform that wants to make an app for the iPad or iPhone to sell and/or read books has to at the very least give their customers an option to buy books through the Apple-sanctioned method – which gives Apple 30% of the profit. And it’s not just the profit. It’s the transaction – which means Apple can leverage the data collected (who bought the book, when they bought the book, how often they buy books and from which apps) to optimise their own book store – and they get that information for doing absolutely nothing. There’s also a massive doubling up of energy and effort here: Amazon, Google, Kobo, Overdrive and every other book reading app that offers a store already has a store. Apple skimming 30% off the top is nothing but pure greed. And if they stick with it, they will fail. And here is why.

Those who know me well (or know me at all) are probably acquainted with my pile of Apple gadgets and my willingness to justify spending vast amounts of money on the latest and greatest from Cupertino. That’s because despite every anti-competitive, backwards-thinking, mean-spirited thing they do on the iTunes or App stores they still make pretty things. Very pretty things. In fact, they make billions of dollars from selling pretty things for exorbitant prices. Just a small example of this: it was announced today that despite having only having 4% of the global smartphone market share, Apple still makes 50% of the profit from sales of the iPhone. That means there are a lot of people out there who are willing to spend a lot of money on Apple hardware.

And that’s because they make good hardware. It was the reason the iTunes store and the App Store were created. To sell more hardware. Apple may have revolutionised music sales, and made a killing doing it, but they did it by selling iPods – not by selling music. If they try and take complete control of ebooks on iOS (the iPhone and iPad operating system) in this way, then all it will mean is that ebooks will fail on iOS. Books are not like music. There are already quite a few established sellers of ebooks with more market share than Apple. And books are already too expensive, and too unprofitable for Apple to skim yet another 30% off the top.

So Apple have screwed the pooch. What are they going to do about it? The views on this story seems to be entirely negative. Will they try to spin it into something positive for consumers? Or will the famed Apple marketing machine fail? Only time will tell, but unless Apple rolls over on this issue it will be a bad thing for books in general.

Apple Screws the Pooch Pt 1

News has surfaced in the last couple of days about Apple and how they’re once again ruining it for everyone. Why, Apple, why? I didn’t want to believe it myself at first, but now Apple have clarified. Yup, definitely evil. But it’s not just evil – it’s really stupid. And here’s why.

To summarise: two days ago, The New York Times reported that Apple had some made some changes to the App Store rules which meant that Sony could no longer sell ebooks through their reading app on the iPhone. Instead, Apple would force Sony to use a system called “in-app purchasing” – which means that every transaction made within an iPad or iPhone app goes through Apple and the iTunes store. That means 30% of every book sold goes to Apple. There was a massive (I argued) overreaction to this, as every man and his dog predicted that Apple was being evil and trying to take over ebooks. I thought they were evil, but I thought they were being evil in the same way they always are. Apple have always had it in for software developers trying to sell things directly through their apps. This is why Kindle’s iPhone and iPad apps force you to go to the browser to buy a book, but Apple’s own iBooks app lets you do it without going to the web browser.

I thought (wrongly as it turns out) that this meant apps like Kindle and Overdrive wouldn’t have to change, because all of their transactions take place on the open web. If you don’t know what that means, let me explain: I open the Kindle app on my iPad; I want to buy a book; I click a button in the app which takes me to the Amazon website; I buy my book; the Kindle app re-opens and I can start reading. In Apple’s iBooks app, on the other hand, I press a special button inside the app; there’s a fancy-pants animation that turns my bookshelf into a secret rotating door; I buy my book; the secret rotating door rotates again and I can start reading. In other words, there’s not that big a difference, save for the magic rotating door.

This is the first part of a two-part article. To read the second part, click here.