Should the iPad Have Killed Off The Kindle?

I read an article on NewsWeek asking why the iPad hasn’t killed the Kindle yet. Leaving aside the unsubstantiated claim that reading on ePaper-type device is somehow easier or better than backlit LCDs (there’s no evidence to support or refute this, all these “experts”, like the one quoted from Amazon, seem to be going on anecdotal evidence, or their own personal experience. Cite peer-reviewed references, or drop it). Anyways, their sole “evidence” that the iPad hasn’t killed the Kindle is that Apple sold 3.5 million iPads in the first 3 months, and that there are over 6 million Kindles installed today.

Apparently, modern news analysts expect new products to completely replace existing, established products in a matter of months. If they haven’t, somehow that product has “failed” in some way. The author of the article goes on to say how the iPad is somehow “locked only to Apple” and that the Kindle is superior because it has access to a wider inventory of product and can run on many devices, which is a bit of strawman for the original argument: this wasn’t a discussion about the merits of the competing bookstores, the argument was why the Kindle device hasn’t been displaced by the iPad. This just further weakens the author’s credibility as an analyst and a writer. Since, as the author points out, the Kindle app runs on the iPad, I can have the iPad and have access to both the Apple book store and everything the Kindle device has access to. I also have access to the eReader/FictionWise bookstore and Stanza inventory on my iPad. With the Kindle device, I just get the Amazon bookstore plus PDFs. Oh, and if I want colour illustrations to appear in colour, they can’t on a Kindle (I’m allowed to put in a strawman too 🙂 ).

So, is it realistic that the iPad should have killed the Kindle? First, it’s too soon to tell. The Kindle has been on sale in the US for about 2 years, and only recently arrived in other countries like Canada. It took them 2 years to build an installed base of 6 million devices. The iPad, however, has only been on sale for about 4 months (as of the time of this writing). It in the first 3 months, Apple sold 3.5 million devices. If the sales rate were to continue at the same pace (unlikely, but possible), that would mean the iPad would have an installed base of about 7 million devices in 6 months. The Kindle, in the mean time, continues to sell, and interest appeared to increase when the price dropped. So, that would seem to indicate that, after 6 months of sales, the iPad and the Kindle could have comparable installed bases. However, the iPad also appears to be selling at a higher rate than the Kindle, so it should surpass the Kindle installed base by the end of 2010, and will likely have double the installed base sometime in 2011.

But is that “killing the Kindle”? I don’t think so. All that means is Apple sold more devices. There is still a place for devices like the Kindle and other dedicated eReaders. Not everyone needs or wants a general purpose computing tablet, any more than all people need or want smartphones, a computer or a pickup truck. For people who want to have a library of books available on the go, with easy access to purchase new ones, devices like the Kindle are the right product. Just like some people only want an iPod Touch because they don’t need or want the phone capability, or people just want an iPod Shuffle because all they want is to listen to music. And yes, some people find reading ePaper-type devices like the Kindle more comfortable. It doesn’t mean the LCD experience is worse for everybody, but it may be for them. To each his own.

Second, this presumes Amazon even cares if the Kindle device is dominant. The real money in all of this for Amazon is in the books. If it was the device, then there is no way Amazon would have released a Kindle app for iPhone, iPad, BlackBerry and Android, and cannibalized device sales. The Kindle device is a way to open Amazon’s electronic book market to a wider user base, by giving people who don’t have or want one of these other devices a way to access the real money-maker: the books. Products like inkjet printers and blade razors follow a similar model: sell the razor/printer for cheap (or even give it away), because the money is in the blades/ink that has to be replaced from time to time. The author appears to have spoken with Jeff Bezos, president of Amazon, but apparently didn’t ask the right question or didn’t really listen to the answer. What would be telling is to know how many people have installed and regularly use the Kindle app on other devices. My guess is that it would be far higher than the number of people using the dedicated Kindle device, but we won’t know because Amazon won’t discuss those types of details (the 6m Kindle devices is even a bit of a guess, since its an estimate from Forrester, not an official number from Amazon).

Once again, we get “analysis” that presumes that new technology should completely obliterate older technology in a matter of weeks or months. We also get the typical implied assumption that only one product can exist in a particular technology space, to the exclusion of everything else. Neither of these are realistic, or make any sense in the real world. As long as there is a desire for choice by the consumer, some kind of choice will generally exist. And when something is brand new, maybe give it time (like a year or so) before deciding that it has displaced a competitor or not.