Tuesday, July 22, 2008

The Reasons Why eBooks Are Next For Apple

I hope Seeking Alpha will forgive me if my quoting has gone over their requested 400-word limit, but I hope they can see I'm trying to add value to what they've given all of us with their transcript!

Look at this very telling quote:
Andy Hargreaves - Pacific Crest Securities

And then I wonder if I could just ask about Apple TV really quick and wondering if you can give us any clue or any indication on the number of video rentals or how the launch of that service has impacted hardware sales?

Timothy D. Cook

We started shipping Apple TV, as you know, in February and we’ve been pleased with the sales that we’ve had. However, the Apple TV remains a hobby, as we call it, because it’s not -- this business is not nearly as large as the Macintosh business or the music business and does not have the potential of the iPhone business. However, we are very excited about the potential of it and continue to invest in it.

Emphasis added by me.

People who read -- who really truly read -- own more books than they own videos (VHS/DVD).

Music is a special case that everyone wishes they could get into: a short file that can be pumped out to jillions of people at low cost which has the potential to create a fan base for repeat sales.

Hey, wait a minute!

That's the ebook business too!

An ebook file is even smaller than an MP3 file. It can be pumped out to jillions of people at even lower cost. Authors come with fan bases just like music bands. And they have the potential to create repeat sales.

Don't quibble about music bands producing an album while authors create one book. I can easily argue that one album is equal to one book that each track on an album is equal to a chapter in a book.

And here's the ugly secret that the iTunes Store has exposed: people are more likely to buy a single song from a group instead of an entire album.

Show me where people would likewise purchase one chapter of a book instead of the entire book!

Books are better than music. Music falls out of fashion. There are tracks I listened to ages ago that I now can't stand to hear again.

This has hardly ever happened with a book I've read. Raymond Chandler will be as compelling twenty years from now as he is today. Tell me that the same can be said for music. How many of you are listening to music that was popular when Raymond Chandler's books were originally published?

As for video, it has its own limitations. There are people out there who absolutely refuse to watch anything that's not in color. And now things are moving to HD. How many people will refuse to rent or purchase anything that's not in HD? And even within HD, how many who can process 1080i will refuse anything that's only 720? How many people who have widescreen capability will refuse anything that's in TV's once-standard aspect ratio?

Books lack the limitations of music and video.

Books are a ginormous business just waiting for a company like Apple to come along and revolutionize into electronic editions.

The Sony Reader was pummeled (unjustly, I still think!) by the Amazon Kindle. But despite Jeff Bezos's braying about how swell Kindle sales have been, no hard numbers have been produced to back up that claim. What we've gotten instead are nebulous percentages of sales of Kindle ebooks versus print books. A figure that says nothing!

It's inevitable that Apple will do ebooks. It's the only area they've yet to touch. It's the only area that remains an unsettled digital frontier just crying for standardization, legitimacy, and the kind of global visibility the Apple imprimatur would convey upon it.

Anyone who wants a low-effort glimpse at just how horrible the ebook business currently is should read this post and then visit the rest of my one-shot The eBook Test blog.

Lastly, as good as the iPhone can be with ebooks, a better experience can be had with a screen that approximates the size of a mass-market or trade paperback print book.

And that's where the iPod Air will come in.

That would be a product transition.

No comments: