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Monday, December 6, 2010

Ebook Wars: The Superpower Lines Are Drawn

With the official entry of Google eBooks into the e-book space, a fairly clear picture of the hostility landscape has emerged. Numbers from Forrester show that laptops remain the most common device for ebook reading, but Amazon's Kindle devices are a close second. Those two alone account for over two-thirds of the e-reader market.

Let's have some truth in marketing. Google's eBooks buzzline is "It's time to set your reading free." This implies that your reading wasn't free before. In terms of pricing, Google is competitive with the other major retailers. Most bestselling headliners list at $9.99 or less. More to the point, Google's ebooks can be read on a wide range of supporting reader devices as well as in a Web browser. The compatibility list is essentially a who's who of the reader field...with one exception. "Currently," reads Google's page, "Google eBooks are not compatible with Amazon Kindle devices, though we are open to supporting them in the future."

Google also keeps track of what page you're on in a book so that if you start reading that title on another device, you can pick up right where you left off. This is a carbon copy of Kindle's functionality, and remember that Kindle, in addition to being a series of e-reader devices, is also a software platform that spans many physical device formats and operating systems. No big change there.

So the new "free"-dom of Google eBooks must pertain to the retailing arrangement? No, not really. When you want to buy a Google ebook, you can either do it directly from Google or any of over 4,000 retail partners, including the most excellent Powell's. The trouble is that I've never felt any allegiance to an online bookseller other than Amazon. I go where the pricing is cheap and the reviews are informative. Amazon also has a broad affiliate network, so there's no Google advantage here.

What is Google's advantage? Android's momentum. Android already passed the iPhone in 2010, and I expect we'll see the same happen with Android-based tablets over 2011/2012. Google knows that Apple is not the threat in the ebook space. With one-third of the e-reader market and climbing, Amazon is the 800-pound gorilla to subdue. However, Kindle runs just fine on Android, although I wish it was more accommodating of non-Kindle ebook content.

The fact is that, in its first incarnation, Google has no significant advantage over Amazon. This is a me-too event for those who haven't purchased a Kindle. It's not that your reading is now set free, it's that you have a decent Kindle alternative. (Yes, I know the Nook, also available on Android and other platforms, is a decent option, but look at the market numbers. Barnes & Noble simply doesn't have the depth to seize share or leap ahead.)

Forrester expects U.S. spending on ebooks to triple from just under $1 billion in 2010 to $2.81 billion in 2015. The number of dedicated e-readers will leap from last year's 3.7 million to 10.3 million now to 29.4 million in 2015. I suspect that Forrester might be underestimating ebook revenue and overestimating dedicated device adoption. Amazon has proven that the market is ready for ebooks, and Apple has proven (again) what we've seen over and over again for the last three decades: Most things being equal, a multi-function device will beat a single-purpose device every time. The Kindle has succeeded because of its simplicity and low cost. As we've seen with smartphones, Android has the ability to level this playing field. So either Amazon is going to have to make the Kindle into a tablet -- soon -- or Google will eventually slice Amazon down to a Nook-sized piece of market pie.

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