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Vanishing readers and rapidly multiplying EBooks- Its all playing Amazon’s way now

Posted in Industry updates by Manas Ganguly on January 30, 2013

Lending more credence to an earlier observation that I had- Amazon will take over the publishing business – the latest reports from Amazon suggest that eBooks as a category have grown 70% Y-o-Y even while the eBook readers (devices) have plunged 36%. The key here is that even while eBook readers are on their way down, Amazon’s Kindle is doing as good as Jeff Bezos would like it to.

Quoting Bezos:
After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We’re excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection.

The key is the eco-system and the network effects which is priming the Amazon business of books and a shifting habit from physical to electronic reading. Amazon’s kingship at electronic distribution has also led to Kindle Fire HD, Kindle Fire, Paperwhite and Kindle held the top four slots on Amazon worldwide in the holiday season. Kindle stores have been opened in Brazil, Canada, China and Japan.

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Tablets: Growth charted from 2012 thru 2016

Posted in Industry updates by Manas Ganguly on December 6, 2012

IDC has upped the forecast for Tablet shipments by 2012-13 by a factor of 4% on average. In the 4 year horizon, IDC has upped growth estimates by 8% for 2016. In the same vein, IHS iSuppli forecasts growth of tablets from 120million units in 2012 to 340 million units in 2016. The CAGR for the category is about 18% (IDC) to 23% (iHS iSuppli).

IDC Tablet Forecast - Volumes

The Apple iPad dominance on the tablet segment is carried through 2012-16 even though the shares have a gentle downward slope. Android powered by Samsung, Amazon and other Tablets maintains its shares where as Microsoft is seen as the biggest winner. (This is contrary to the current state of Windows tablet strategy which is in disarray – and shipmenet numbers have been lowered from 1 million units to 500-600K tablets). In the same vein IDC really does put the Tablet category as a three horse race with no room for any other OS in the market.

IDC Tablet Forecast - OS Market Share

Contrast this with the death of eBook Readers- which have gone from the “next big thing” to “also ran”. Current forecasts show the eBook reader market as having already reached its peak of just over 20 million units shipping in 2011, with a decline to barely 7 million in the 2015-2016 timeframe. This epitomizes the attraction of the “multi-tasking” consumer gear at the expense of the single-function box—even when that one function is done supremely well (as in the case of ebook readers). PMP/MP3 players, GPS systems, low-end digital cameras. Companies hoping to make money on ebook reader hardware rather than as a channel for selling content—the Consumer Electronics version of razors and blades—are almost certain to have a difficult road ahead.

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