iPad vs. Kindle vs. Nook Part 1...

The battle for the digital reader continues.  Who will come out on top??

As most know, Amazon started the ebook revolution in earnest.  Before it did, ebooks were being ridiculed as a failed technology that had no future.  This all changed with the arrival of the Amazon Kindle.  There are the obvious complaints about the limitations of the Kindle screen.  It has no color, it has a very slow reaction time making it impossible for video playback which in turn impedes the approach of "vooks" on its platform, which combine video and text.



This may change in late 2010 because of a buyout of e-ink technologies for $125,000,000 by their partner company in Taiwan.  They have promised to have color e-ink screens by late 2010 in full production.

This is the latest version the Kindle 3

This is the Nook manufactured by Barnes & Nobles

Fully a year after the Kindle came out, Barnes & Noble released their Nook. This device promised similar features as the Kindle with an additional one being that it could loan out certain books (if allowed by the publisher) to another Nook user for a period of at least a week.

But we are getting far afield.  There are certain schools of thought on ereaders in general.

One school of thought is that there is no need for them.  Those of this view say that long before there was a kindle people were reading books on their Palm handhelds.  This is true.  But what this view  forgets is that this involved a minority of the total reading population.  Most book readers would have never settled for reading something on such a small screen.  Those same people who see no need for ereaders also see no problem with reading ebooks on laptops or desktops.  This point of view also forgets that many people of any age HATE reading on these computer screens of any type.  I will give just one recent example so as not to belabor the point.  This has been documented.  Some studies say that you can read 25% slower on a computer screen than on paper.  A laptop or computer was never designed to take the place of a book. Most people do not understand that when you are staring at a traditional computer screen, it is redrawing itself thousands of times a second.  This is called the refresh rate.   Non LCD monitors may refresh very fast, where you cannot consciously notice it, but, eventually it begins to tire your eyes.  LCD monitors do not have a refresh rate but they do have a backlight.  This backlight is shining on your face so there comes a time when, after a prolonged period, a tiring of the eyes may occur.  This of course varies from person to person.  Some do not report any fatigue when viewing a computer screen.  There are new screen technologies such as LED which promise more clarity and less backlighting than LCDs.  But just about everyone has experienced trying to read a screen in the sunlight to no avail.  Good luck with that!

The second school of thought whether ereaders should exist as separate devices is championed by Jeff Bezos, CEO and Founder of Amazon.  He thinks that devices have to be designed to specifically replace and address the paper book experience.  Among one of the many features such a device needs to have is a different kind of screen that will not tire the eyes after prolonged hours of reading as traditional readers are bound to do on paper books.  The most popular solution to this screen limitation is the e-ink screen.  It actually reflects natural light like paper does.  The more sunlight the better for its clarity.  In fact, it cannot be read at all in the dark, since it has no backlight.  But the drawback to this screen technology have been listed at the beginning of this article.  According to Bezos we are several years away from color e-ink screens.

Fujitsu has another solution to the no color e-ink problem.  Fujitsu has already produced color screens commercially which in their FLEPia eReaders.  This is a licensed technology from Kent Displays which THEY call reflex LCD.  There is an excellent history of "ePaper" which was the foundation for e-ink technology here provided by ireaderreview.com.  The videos for this device are not extremely impressive.  Also the unit is highly priced at about $1,000.  This will put it in the category of the most expensive iPad which provides a lot more power and appeal.

OLED Screen Technology
This is another screen technology.  It stands for Organic Light-Emitting Diodes.  The variant of OLED is MOLED which stands for Active Matrix Organic Light-Emitting Diodes.  It holds more promise in that it is a brighter display.  IT is cheaper to produce and regular LCD screens.  It is also a "greener" technology producing dramatically less toxic waste.  What makes it better than traditional LCD screens?

OLED technology has several advantages over LCD technology such as faster response times, wider viewing angles, light weight and durable displays, better power efficiency and brightness and lower cost.^[10]

Active-matrix OLED displays provide higher refresh rates than their passive-matrix OLED counterparts, and they consume significantly less power.^[11]This advantage makes active-matrix OLEDs well suited for portable electronics, where power consumption is critical to battery life. The amount of power the display consumes varies significantly depending on the color and brightness shown. As an example, one commercial QVGA OLED display consumes 3 watts while showing black text on a white background, but only 0.7 watts showing white text on a black background.^[12]

OLED displays can be fabricated on flexible plastic substrates^[9] leading to the possibility of rollable displays being fabricated.

Compared with first generation AMOLED technology, the claimed advantages of Super AMOLED are displays that are 20% brighter, have 80% less sunlight reflection and 20% reduced power consumption.^[13]

Here is an application of what will come - rollable displays.  This technology has also spread to LED bulbs and lighting of which we will speak in a further blog.

For a full explanation of this screen technology you can go here.  It is now being used in TVs as well as multiple kind of displays.  There were rumors that the iPad might come out in OLED even though it did not.  Some think it will happen with the second generation of iPads.  These OLED have an additional important factor when made by Samsung.  They can be seen very clearly outdoors in bright sunlight.  The predictions for its different applications are astounding.  Its growth is predicted to make it the dominant display system for outdoors and indoors consuming less power than silicon based systems.  Read the quote from the source listed right above:

Organic Light-Emitting Diodes (OLED) typically run at lower current produce less luminance than conventional silicon-based LEDs. Since they are fabricated on a flexible, organic substrate, OLEDs are flatter, use less energy and exhibit higher contrast than conventional displays.

There are new devices on the way which will hit the market by late 2010 or 2011 by Qualcomm with a new screen technology called Mirasol.  This will address both the shortcomings of LCD screens and the e-ink screen now used in the Kindle, Nook and Sony ereaders.  Here is an example of the Mirasol:

This device will be better than the current readers for several reasons.  It will be able to display colors.  It will be able to play back Video at 30 fps.  And the device will also be able to reflect back the light in what they call book mode which avoids the common glare found on all LCD screens (including the iPad), thus topping the otherwise excellent screen on the iPad.

But for now, we need to compare the products that are actually in market.  Many think that the value of an ereader is in the features of its hardware (screen, speed, storage,, 3G, etc.).  But this is not the real value.  The real value is lies first of all in the company that makes it.  In this case the three companies are Apple, Amazon and Barnes & Nobles.  Let us examine these companies for their innovation and also their economic growth and stability.

Apple in January of 2010 had approximately $40,000,000,000 in cash reserves.  Obviously, it is not going to go under any time soon and its stock and products are in great demand.  This is a company that is innovative and can continue to upgrade their products as well as produce new ones.  What about Amazon?  In this horrible economy with many people out of work, Amazon will experience 35% revenue growth!  Read this amazing quote:

Amazon's revenue growth rate has reaccelerated despite high unemployment and cash-strapped consumers. Amazon has outpaced the ecommerce market, retailers and even Internet leaders like Google meaningfully.

 So in this case we need not worry as to whether Amazon will be able to upgrade the Kindle or come out with new ones to meet the competition of the other companies in the field.

Lastly, what about Barnes & Nobles?  Here we have a drastically different picture.  Borders which is a part of Barnes & Nobles has had its second quarter loss this year.  Some have said that they have the advantage of having brick and mortar stores which customers can go into as opposed to Amazon's mostly internet presence or Apple's far fewer stores.  But this is wishful thinking in a depressed economy.  People are NOT going out shopping too much!  The most classic example of this point is their famous and beautiful store in Manhattan on West 68th Street which is a four story building named the Lincoln Triangle Store.  This store will close at the end of January 2011.  Let this graphic of their stock value from CNN money present the case.  It has approximately 737 retail stores and 637 stores on college campuses.  The companies stock has lost $1.02 per share this year.  But there is some light in this financial tunnel for Barnes & Nobles.  Their nook ereader has been selling well.  In fact it is the only part of the company that is making any money.  They claim to have about 17% of the ebook market as of this August as presented in their last earnings report.  What about those money making stores that they have? They will be closing six to ten stores annually over the next three years because of shrinking demand for their print products.  This is the truth of what is happening to paper books as stated by Chairman and Founder of the company:

“Digital publishing and digital book-selling will soon become the most explosive development in the history of our industry and will sweep aside those who aren’t participating.”

Does this sound like a company that can bear the burden of competition as well as continue to upgrade their products?  It does not seem like it.  Although the Nook began to outsell its closest competitor the Kindle in March of this year,

If this is not enough let us check sales of each product.  Sales numbers of the Kindle are murky since Amazon does not release them, but the most recent estimate is at least 3,000,000 kindles of all kinds having been sold as of January of this year.  The most recent sales figures prediction of most ereaders I have found come from this source.




But what about the sales of ebooks?  How is that going?  Well in July of this year Amazon surpassed the sales of its hardcover titles by ebook versions of the same book by a greater margin than ever before.  For every 100 hardcover books sold it sold 180 ebooks of the same title.  Here are some more startling facts for Amazon ebook sales:

While part of that shift has to do with reading trends in general — Amazon notes that e-book sales grew 163% in the month of May and 207% year-to-date through May...

A long awaited book named, The Girl Who Kicked the Hornet's Nest released in June sold 425,000 copies of which 29.4% (125,000) them were in ebook form.  The largest selling electronic edition of any major publisher release.   Here is another interesting quote which I agree with:

Publishing industry observers have been fond of saying that print books still account for over 90 percent of all book sales, and that any tipping point for ebook sales is still a long way off.

We will not be hearing such pronouncements much longer.

We will describe the sales of ebooks by market share rather than numbers.  Here is the best information I can gather so far.  Someone searched this in google trends and came up with this:

A in blue indicates the Nook, B in green indicates the iBooks and C in red indicates the Kindle.

Apple announced in July that they had reached 22% of the market share for ebooks amounting to 5,000,000 ebooks sold.  If that is true and Barnes & Nobles has reached 20% market share, then it leaves Amazon with approximately 50% market share not counting the much smaller other players.  Some have argued that Amazon will do fine with only 35% market share. 

In part 2 of this blog we will discuss Google Editions which is slated to be a new service coming out any day in which Google will sell ebooks.  Then we will put everything together to see who has the winning hand at the moment.  Stay tuned.