17 March 2010

Where do you think Apple will go with the iPad?

Is it just me or is most of what is being discussed in the digital media world with regards to ebooks purely centred around the iPad? Is there any other device in recent times that has attracted such attention, focus, debate or interest?

Today I read on ChangeWave all the stats from a survey of over 3,000 consumers that shows a huge wave of demand for the iPad. I'm sure we didn't need a survey to know that - I've mentioned the quote from last year's Frankfurt Book Fair's Supply Chain Meeting again and again on this blog ("it will be Apple, it will be cool, and everyone will want one").

It's not surprising to read Amazon, Sony, Barnes & Noble will all take a hit when Apple launches. That's because they went for a device that was predominantly an e-reader with wi-fi (or without for some of the Sony's on the market). The bells and whistles options haven't been great - music for some, notes for others, nothing that really stands out. Which is what Apple has done. They've created something more. Apple has the convergence of technology we've been waiting for. Of course there will be many lookielikies in the coming months. Everyone will want a piece of the ebook pie.

According to the survey, the belief is the iPad will capture an astonishing 40% of the e-reader market in the first 90 days after its launch. The survey further showed demand will continue to strengthen (it will be cool remember!) and once iBook is launched it will further enhance the offering, however from what I can gather Apple will be using the publishers epub files. That means if you receive epub files from your ebook vendor (or directly from the publisher) you don't need to buy from the iBook store. So in my mind iBook has to offer something more. The full multimedia offering.

The other concern relates to cost - if you can buy your $9.99 epub ebooks from Sony (who matched Amazon's pricing strategy for their lead titles), why would you buy from iBook at a higher price? The Apple agency model has been commented on by industry leaders and insiders for some time. With a 30% cut (assuming the information is correct), Apple might not be able to compete on price unless of course they go the loss-leader route like everyone else.

I'm not privy to digital rights or pricing information but I imagine the last thing Apple will want is readers buying books from other ebook vendors and reading them on the iPad. It defeats the purpose of the iBook.

Then again, I buy all of my digital music from iTunes because it's there and it's at the right price point - I don't need the whole album, I choose the songs I want, and I try out ones I don't really know but has been recommended to me based on a purchase or the Genius app. I listen to music all the time and wish the iPod I got for my birthday a few years back had a lot more memory (it only holds 1600 songs and I have thousands more that aren't coming across to the device). Music and reading are very different pursuits and take up different amounts of time. I go via iTunes because it's what I've done from the start. I didn't know any better and I've been a loyal customer from the beginning. Of course everyone wondered why I was buying music solely from iTunes ("buying" is the verb I'd like to emphasise here. One colleague wondered if I was the only person they knew that actually paid for music but that's a different discussion altogether!). So I linked into iTunes, I love the iPod, and I continue to search the site for new experiences. But with an iPad I already know the ebook vendors, I've purchased from several of them, I know their offering. Would I be loyal to iBook from the beginning if they don't match on price? We have the US$9.99 mentality. It will be interesting to see where Apple goes with their pricing and their digital rights strategies.

And of course Australian publishers won't want to go down that path at all. Their pricing policies have strongly centred around the cheapest print edition. But the consumer expectations for ebooks does centre around price. What will Apple do in this marketplace to meet consumer expectations set by their competitors? And how will publishers respond?

On another matter altogether, I loved reading today on Teleread about Apple iPad accessories and a wishlist. Apparently Jeff Bezos of Amazon reads his Kindle in the bath by sealing the device inside a special Ziplock bag. I've mentioned previously that I love reading in the bath but I'm not going to read an electronic device near water (I have enough problems getting the printed version wet!). If there was an accessory that I knew was safe and secure, would I try it? Will be interesting to see whether Apple comes up with something that can be used around water or food. Some sort of protective device sounds great. Then again, would I still use it in the bath? Hmmm, that's a question that I don't know the answer for.

1 comment:

  1. I have this blog connected through to Facebook (where it appears as a note). There are often comments on my posts but this one set off a bit of a string. Here are just some of the comments left there overnight:

    Rach, great post as usual, but just one correction: Apple has agreed to the Agency model with publlishers, which means the publishers control the ebook price, not Apple. All Apple has mandated has been a price point range of $12.95-$14.95 for the standard book. But once fixed by the publisher, that's it. Apple has to live with it. Personally I consider the agency model an abomination! Thankfully it is quite illegal in Australia under our resale price maintenance legislation."

    "Australian publishers will have to offer the traditional 'discount off RRP model' or 'wholesale' model to retailers, including Apple, Amazon, Google, Kobo and any others. That lets retailers charge whatever they like. Our law directs the publishers, not the retailers, so Apple's preferences don't matter."

    "eBooks offer publishers a way out from high discount sales. The question might really be framed: if I can sell my content for more money and lower discounts with vendor A, or for less money and higher discounts with vendor B, or direct with no discount, which channels will I continue to supply with my content? Those low price points (which may be right, of course, and may be a temporary measure, too) can only be sustained if there's no competition. It's odd that increased competition is pushing prices up. After all, what everyone needs here is more profit from eBooks, not less. I've wondered if the shift has been from eBooks providing supplementary income to providing the primary income?"

    "that is interesting - really if the publishers hadn't been seduced early by Amazon's purchasing promises, they might now have better control over their market pricing. "

    "I have ALWAYS wanted a book I can read in the shower. I think the iPad will be a game changer just as the iPod was. I have great faith in the mass seduction capabilities of Apple's design team."