Apple will enter the eBook market

Posted by Dennis Sellers Feb 8, 2008 at 1:56am

In October Amazon.com announced the Kindle, an US$399 eBook reader. Its electronic paper display provides a high-resolution screen that Amazon says looks and reads like real paper. It’s met with mixed reviews, and I don’t expect Apple to make an eBook reader per se, but I do think that Apple knows there’s an opportunity here.

You might not suspect that from an interview that Apple CEO Steve Jobs gave to the New York Times in which he basically declared reading on the sick list if not downright dead. He said that the Kindle would go nowhere because most Americans have stopped reading.

“It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore,” Jobs told the Times. “Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore.”

I love to read (and average at last two books a month), so it worries me when my favorite CEO declares that reading is going the way of the dodo bird. On the other hand, Extreme Tech’s Jim Lynch thinks that Jobs’ comments are a “dead giveaway that Apple has an eBook reader in the pipeline.” Say what? Actually, his reasoning makes sense.

“In the past, Jobs has made disparaging comments about competitor’s products as a smoke-screen to try and hide what Apple was busily working on behind the scenes,” Lynch writes. “Remember when Jobs denied that Apple would build an iPhone? Or the time he said that people would never want to watch video on an iPod? Jobs always misdirects attention away from what Apple is doing and it amazes me that people seem to fall for it time and time again … even some of the ‘savvy’ folks in the media business who really ought to know better.”

He thinks that Apple will introduce an eBook reader and revive the iBook name along with it. I’m dubious that Apple will roll out an eBook reader proper, but I do think that Apple will introduce a larger iPod touch with a bigger screen (at least a six-inch 800×600 display) that better accommodates video—and will be a perfect eBook reader. The bigger iPod will allow you to carry books along with your tunes, videos and other data. If and when it arrives, you’ll also see eBooks added to the iTunes Store along with the current selection of audiobooks.

Also, Jobs’ “reading is dying” scenario doesn’t consider the burgeoning success of eBooks. They may still be only a small part of the total publishing market, but e-book sales are growing, and many expect big things for the format in the near future, notes Book Business.

EBooks Corp., which provides more than 70,000 e-book titles to consumers at eBooks.com, estimates that the e-book market hit $130 million in 2006, and expects it to reach $220 million this year. “Five years out, the total e-book market will be between $3 billion and $5 billion,” projects Stephen Cole, managing director of eBooks, which has partnerships with 327 publishers worldwide, including Random House, Simon & Schuster, Zondervan, Dell, Warner Books and Oxford University Press.

Cole told Book Business that this projection is based on several factors, including eBooks’ performance, its knowledge of its competitors’ business, and its own industry analysis.

“As e-book adoption accelerates, it will be interesting to see what happens to existing high-street retail booksellers, and especially the multibillion-dollar wholesalers,” he says. “The major operators in the traditional channels are asleep at the wheel. The barbarians are at the gates, having prepared themselves for years for this moment.”

Other market reports’ figures are lower than eBooks’ estimates. An Association of American Publishers’ (AAP) report places U.S. gross e-book sales for 2006, as of October, at $22 million, showing a 26.2 percent increase over the $17.4 million reported at the same point in 2005.

While trade and standards association International Digital Publishing Forum (IDPF) doesn’t have 2006 figures available yet, its figures for 2005 indicate sales of 1.6 million e-book units, totaling $11.8 million. These e-book sales figures compare to the industry’s overall book sales of $25.1 billion, according to AAP, notes Book Business.

Nick Bogaty, IDPF executive director, says the e-book market is hard to estimate because it is in its early stages. He expects significant growth in trade, education and library sales. “The market should at least double in 2007,” he adds.

So there’s obviously money to be made, and a future for Apple to forge, in eBooks.

Plus, Extreme Tech’s Lynch has a brilliant suggestion that Apple should consider, if they haven’t already. To wit: “One interesting possibility that doesn’t seem to have gotten much consideration is the ability for an eBook reader to also display comic books and graphic novels. Paper versions of comic books and graphic novels have lost much of the readership they had 20 or 30 years, ago and distribution of these products has declined markedly as well. What better way to reinvigorate the market for comic books and graphic novels than to include this ability in the iBook reader? Comic books might be an excellent addition to the iTunes store and, no, they are not just for kids these days. There’s quite a bit of terrific graphic novels/comics available for adult reading too.”

This cold be the next generation of the “comic book.” And who better to make it happen than Apple whether it’s with a refocused “iBook” or a beefed-up iPod touch?


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