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Amazon could be Android’s second coming back into Tablet category

Posted in Mobile Devices and Company Updates by Manas Ganguly on September 19, 2011

In an earlier post about the growth rush on Tablets, I had mentioned how Android has lost ground to Blackberry and Apple in Tablets in Q3, 2011. Given the $99 gold rush on the HP Touchpad, Android is not expected to recover any ground in Q3, 2011 and it will only be Q4, 2011 before Androids make a pushback into market share for tablets. Amazon has already been battling its problems in platform fragmentation for a while now and hopes to put this to rest with the Android 4.0 Ice-cream Sandwich release. In that context, Amazon’s intent to sell its Kindle tablet with its custom built on Android platform was seen as another splinter in the multi-splinter Android platform. Read about fragmentation in Android platform

On second thoughts however, Amazon’s customisation of Android for its Kindle Tablet could actually be better for the tablet market. The full colour Amazon Kindle tablet will be based on Android 2.1, with layers of customization on top. The user interface, touch gestures and other features will be optimized for accessing Amazon content via its Website, which has just been upgraded with bigger buttons and spacing to make it more easily accessible using touch screens. Amazon’s brand could propel more development for its own content, creating a “better ecosystem” than currently exists for tablet users accessing Google’s Android Market store. Its reach is so broad that it can easily entice Android developers to create apps just for its version of the Android platform, sold exclusively through Amazon’s own Android store. There are over 100 Honeycomb applications, compared with over 100,000 apps for Apple’s iPad. With Amazon behind it, the Kindle Tablet ecosystem could foster tens of thousands of apps, if not more. The result, combined with a sub-$300 (£190) price point, is a product that folks would classify as a winner.

• Thanks to Amazon’s brand, the Kindle Tablet could quickly become the dominant Android tablet platform that developers support, with an Appstore that consumers will come to trust
• Amazon’s online expertise would make it harder for Samsung, HTC and other Android tablet vendors to compete with itself and Apple on the app store front.
• Arguably, Amazon with its DNA of online retail could ensure they would build a more competitive platform to take on Apple and Android.
• Amazon could worry Apple as the only tablet maker with considerable clout in brand, applications and content – where Apple is strongest.

2012 is the year of return of Android or rather the takeover of Android in tablets. However, Barclay’s has released a report predicting 6.4mln Android tablet sales in 2012 which is a few multiples of the 2011 Android numbers, but far less than the 50 million iPads that are expected to be sold in 2012. But it is nice to know someone else with staying power is trying. Amazon could make the run up to Christmas interesting.

Reference Posts on Android Fragmentations: Fragmentation versus Open Source

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Effects of Digital Disruption on the economics of Book industry and writers

Posted in Industry updates by Manas Ganguly on October 5, 2010

Digital revolution is disrupting the economics of the book industry and beginning to have an impact on the careers of literary writers.

Priced much lower than hardcovers, many e-books generate less income for publishers. And big retailers are buying fewer titles. As a result, the are approving fewer book deals and signing fewer new writers. Most of those getting published are receiving smaller advances.The new economics of the e-book make the author’s quandary painfully clear: A new $28 hardcover book returns half, or $14, to the publisher, and 15%, or $4.20, to the author. Under many e-book deals currently, a digital book sells for $12.99, returning 70%, or $9.09, to the publisher and typically 25% of that, or $2.27, to the author.

The upshot: From an e-book sale, an author makes a little more than half what he or she makes from a hardcover sale. The lower revenue from e-books comes amidst a decline in book sales that was already under way. The seemingly endless entertainment choices created by the Web have eaten into the time people spend reading books. The weak economy also is contributing to the slide.

According to researches, Sales of consumer books peaked in 2008 at 1.63 billion units and are expected to decline to 1.47 billion this year and to 1.43 billion by 2012.On the other hand, E-books sales are exploding. Currently, e-books account for an estimated 8% of total book revenue, up from 3% to 5% a year ago. It is estimated that e-books could be 20% to 25% of total unit sales by the end of 2012 and, eventually, digital books will overtake physical books.

Some book-industry experts say that lower e-book prices could increase overall unit sales eventually. Whether they will make up for the loss of hardcover income remains to be seen. The Authors Guild and some literary agents are urging publishers to raise the author’s share of e-books to as high as 50%, arguing that there is less overhead for a digital book. Thus far, publishers are resisting.

The e-book is good news for some. Big-name authors and novels that are considered commercial are increasingly in demand as e-book readers gravitate toward best sellers with big plots. Unlike traditional bookstores, where a browsing customer might discover an unknown book set out on a table, e-bookstores generally aren’t set up to allow readers to discover unknown authors, agents say. Brand-name authors with big marketing budgets behind them are having the greatest success thus far in the digital marketplace. Not everyone believes that the shift to digital publishing is necessarily bad for writers. The industry may be transforming away from big corporate-owned publishers back to a cottage industry like it was many years ago. The shakeout could help prune an overcrowded market.

As e-book sales accelerate, their impact on physical book sales will also grow. Publishers worry that $12.99 digital books that typically go on sale the same date as physical books will cut into their hardcover sales and their $14.99 paperback sales down the line, a key revenue producer for literary titles.

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Amazon prepares the Kindle for Mass Acceptance with a $100 Target price to consumer

Posted in Industry updates by Manas Ganguly on August 1, 2010

Amazon is hoping to turn its electronic book reader Kindle into a device with mass market appeal, by slashing the price of the Kindle. This could be a reaction to iPad’s surmounting challenge. By reducing the price point, Kindle is trying to position itself as a alternative for its “serious readers” distinct from Apple’s multi-purpose iPad and look for volumes.

Amazon, the pioneer of the e-book business, last week unveiled a $139 wireless-only version of the basic Kindle, less than six weeks after dropping the price of the e-book reader to $189 dollars from $259 dollars.

The newest price drop could fuel further growth in sales after growth for the Kindle “tripled” following the price cut to 189 dollars. Amazon is anticipating that the even-lower price will spur further sales which leaves the field open for yet another price drop and a possible sub $100 pricing.

The Wi-Fi only device for $139 dollars clearly targets a mass market audience. At 139 dollars, the Kindle is “edging closer to a tipping point price of 99 dollars” which could trigger widespread adoption. These drops are compelling price points for consumer who are looking for a single purpose device which has a rich functionality

US bookstore chain Barnes & Noble sells a version of its e-reader, the Nook, for 149 dollars while Sony’s cheapest e-reader is 150 dollars and the iPad is going to set a buyer back at least 499 dollars.

Amazon does not release sales figures for the Kindle but says it has been the online retail giant’s best-selling item for two years. Research firms and analysts estimate the number sold at more than three million units. Apple sold nearly 3.3 million iPads in just the first three months since it hit store shelves but the competition from the trendy California gadget maker has Amazon unfazed.

The tablet computer from Apple allows users to watch video, listen to music, play games or surf the Web in addition to reading digital books but the Kindle, as Amazon founder Bezos has stressed repeatedly, is “all about reading.”

“The Kindle device will succeed by being the best dedicated e-reader in the world,” Bezos told Amazon shareholders in May, comparing it to a camera on a phone and a dedicated camera.

“If activities are important, then (people) end up getting dedicated devices because they’re always going to do the job better,” he said. “Serious readers, they’re going to want a purpose-built device.”

Amazon insists that when it comes to reading e-books, the device that does it best is the Kindle and its black-and-white electronic ink screen is better than the iPad’s backlit color LCD display, which Bezos says causes eye strain.
When Amazon introduced the Kindle nearly three years ago it was selling for 359 dollars and industry analysts believe the company may now be selling the devices at below manufacturing cost. Following the razor-blade model, Amazon appears to be taking a small margin on the razor (the Kindle) and planning to make it up on the blades (the e-books)

Amazon’s US Kindle store currently offers more than 630,000 titles and the company announced this month that it was now selling more e-books a month than hardcover books, a trend that Bezos expects to accelerate.

“I predict we will surpass paperback sales sometime in the next nine to 12 months,” the Amazon founder said in an interview with USA Today. “Sometime after that, we’ll surpass the combination of paperback and hardcover.”

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