Good News For Word Nerds

Below is a link to a business analysis by Alan Kohler (Business Spectator) of the new e-book, Kindle, from Amazon.

In it, Kohler calculates that should e-book take up reach 100%, and e-book users pay for their newspaper subscriptions, papers with readership of 200,000 (e.g. Sydney Morning Herald) will just break even, where as others below that will struggle to survive.  The big international newspapers with readership in the millions should remain strong.

 I think the figures used by Kohler (essentially a 100% ownership of the e-book) are very optimistic as it assumes an enormous take-up of the e-book.  We see even run-away successes like the Apple iPhone struggle to achieve those sorts of number. The following link shows the dominant player in the smartphone market is actually the Research-in-Motion (RIM) Blackberry family of devices with 44.5% market share in June 2008 (anyone got some more recent figures than this?), not the iPhone (which had fallen from 26.7% to  19.2%.):-

http://www.zdnet.com.au/news/communications/soa/iPhone-loses-market-share-to-RIM-Palm/0,130061791,339289520,00.htm

Perhaps one could argue that e-books as a class of device will achieve near 100% saturation (just as mobile phones have achieved near 100% saturation amongst consumers). But to my mind, the e-book is too expensive and bulky to achieve that kind of saturation.  Maybe in time though, if they (and it needn’t be one e-book maker, but a host of e-book competitors) can make it lighter, brighter (back-lit screen if required) and cheaper, without losing its durability, then it will take off.  I think an important price point for such a device is firstly under $100 (at the time of writing they are retailing at US$359), and then under $30.  When it hits the first price threshold, it will capture the first 20% of the market and garner some “cachet” or “cool” factor.  When under $30, you will get near saturation like what Alan Kohler’s figures need.

Another good market would be the educational market, especially schools (primary and high school).  Laptops and computers are too powerful, expensive, delicate and prone to misuse (because of their power).  In an environment like primary or secondary schools which may desire some control over its pupils, the restrictions that an e-book has are sometimes desirable.

Links:

http://www.businessspectator.com.au/bs.nsf/Article/Papers-are-more-than-kindling-pd20090514-RZSQ3?OpenDocument&src=sph 

http://www.amazon.com/Kindle-Amazons-Wireless-Reading-Device/dp/B000FI73MA