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It’s the ecosystem, stupid! Or is it?
By Brian | August 31, 2009
I’ll begin this by freely admitting that I don’t like Farhad Manjoo. I don’t give much credence to most of the people who write frequently about economics, social psychology, marketing, and “new” media. That includes Mr. Manjoo, the Heath brothers and their nauseatingly obvious columns in Fast Company, the Freakonomics guys, and even Malcolm Gladwell on his more extemporaneous days.
What has spurred this virulent anti-Farhadism? That would be Manjoo’s recent column in Slate about Amazon’s Kindle. First, he blathers on about Sony’s “visionary” status in producing the first ebook reader with an E Ink screen. The Commodore Amiga was visionary; so was the Apple Newton. Both devices now share exalted status in the ranks of cult classic also rans, whirligigs which were ahead of their time or better than competitors’ products but which ultimately still lost their battles for market supremacy. Being first out the gate doesn’t necessarily mean you’ll be the winning horse in the Derby.
Of course, the point of his article is to compare the Kindle’s dominance of the eBook reader market with the iPod’s dominance of the MP3 player market. Garbage repositories like TechCrunch are quick to point out that the Kindle, in its first year of existence, outsold the iPod over the same span in its life. There are numerous problems with this comparison. To begin, the first iPods were Mac only. Windows support (initially via MusicMatch) wasn’t added for nearly 9 full months after the release of the iPod. And guess what happened then? iPod sales skyrocketed, nearly tripling the sales in each of the 2 prior quarters, and eclipsing the heady sales figures achieved during the iPod’s first quarter of existence (which included the holiday season of 2001). The Kindle, with its always on Sprint wireless connection, was OS agnostic out the gate because it didn’t need to be tethered to a computer.
Back to Farhad. In the first point of his argument, entitled Lesson No. 1, he admonishes manufacturers of eBook readers real and hypothetical that they cannot win simply by besting the Kindle on price, but that they must also win the war of functionality. In Lesson No. 2, he abruptly backtracks by claiming that the “service matters more than the device itself”. Well, which is it? Is there still an opportunity for an eBook manufacturer, perhaps Sony, to knock the Kindle from its perch with its “killer functionality” – a touchscreen? Or is the race already lost because of the of the eBook ecosystem that Amazon has built, modeled after Apple’s iTunes empire?
This is where the Kindle/iPod comparisons, especially with regards to sales, continue to be problematic. The early iPod did not enjoy the support of the iTunes Music Store, which wasn’t introduced until nearly 16 months after the release of the iPod (and like the iPod, the iTMS was Mac only initially). What was the effect of releasing iTMS on sales? During the quarter in which iTMS was released, iPod sales easily eclipsed the figures of the best prior quarter. With the release of iTMS for Windows nearly six months later, Apple again enjoyed what was to date their best quarter ever for iPod sales.
My point is that Apple built the device, and then developed the ecosystem around it. They utilized industry-mandated DRM as one of the tools by which they created their “walled garden” of computer, iTunes and iPod. By utilizing a proprietary DRM scheme and then refusing to license it to anyone, Apple kept their record label overlord happy and also locked in support for, that’s right, their MP3 players.
Amazon has thus adopted a business model not unlike that 3rd generation iPod with its 1st and 2nd generation Kindles. They already had the reach with their online product sales business; they simply shifted that paradigm to deliver downloadable content. Whereas Apple already had the device and followed by building a marketplace around it, Amazon backed into the device using an extension of their existing business model. Amazon introduced a device that utilizes content downloaded from their web site encoded in a proprietary format to create something greater than a widget; they created an ecosystem. Kindle titles are playable on, you got it, only Kindles and approved Kindle apps for select devices (currently, the iPod Touch and iPhone).
I believe the battle for the eBook reader in its current form has been fought and won. Embracing open standards, as Farhad spuriously suggests, isn’t going to beat the Kindle. Neither will touchscreens or color E ink screens or tiny incremental improvements in technology, at least not without the network to support the tech. I can foresee only one company who can simultaneously engineer a disruptive technology AND provide the ecosystem to support it to knock off the Kindle, and that’s the very company that Amazon mimicked in bringing its ebook reader to market.
Topics: Art & Copy, Nature Cannot Be Fooled | 4 Comments »
September 2nd, 2009 at 3:50 pm
But they’re so dorky! I have to bite my tongue hard to stop myself from laughing whenever I see one of those things!
… says the girl who owns neither an Ipod nor any type of portable music device.
September 2nd, 2009 at 4:24 pm
I think they’re pretty silly, as well. I understand their batteries last forever, but I can’t help but chuckle whenever I see one.
September 8th, 2009 at 6:27 am
[...] Brian from Unqualified.org, on eBook [...]
June 27th, 2010 at 1:37 pm
[...] no secret that I don’t like most so-called “technology journalists“, men and women who are often skilled in the latter but painfully deficient in the former. [...]