Amazon Kindle sells half as well as Microsoft Zune
February 4th, 2009
Daniel Eran Dilger
If you’re hooked on phonics, you’re probably stoked about Amazon’s Kindle, which allows users to load up books, newspapers, and even blogs and Wikipedia articles from the web over-the-air for reading on a slow refreshing, grey e-Ink screen. But did you know it’s selling half as well as that barometer of epic failure, the Microsoft Zune?
At least one analyst is excited about the potential of the Kindle to become a blockbuster, if only it follows in the pattern of the iPod. In other words, the task Apple accomplished in selling music players should be easy to replicate in any business: eBook readers, PDAs, Tablet PCs, UMPCs, even iPod clones. Since the Kindle sold 500,000 units in its first year, it must be due to sell twice as many during the global crisis of 2009, according to Citigroup analyst Mark Mahaney.
AppleInsider | Amazon rumored to introduce Kindle 2.0 next Monday
Everything Counts in Large Amounts.
Just ask Microsoft, which has introduced all manner of consumer products that will all sell really well once they hit the same iPod magic curve that fires their sales up in the stratosphere automatically. Actually, that didn’t ever happen, and it looks like it won’t ever.
Exuberance about PDAs peaked shortly after 3COM took its Palm subsidiary private in 2000 and have grown increasingly inconsequential every year since. The Tablet/UMPC devices that Bill Gates pitched incessantly from the early 90s right up to his retirement from leading Microsoft have never achieved any measure of broad success outside of a few small niche markets.
And Microsoft’s attempt to replicate the iPod’s success with its own Zune resulted in intractable failure, with the company initially resorting to fire sales that liquidated the first year’s inventory at as much as 60% off, and second year sales that never broke out past that million unit per year mark that defines the baseline of failure in consumer electronics products today.
There Can Be Only One.
Launching a brand new product, or even a new implementation of an existing product category, is very difficult. That’s why it’s more that a little impressive that Apple, while at its lowest point after the dot com bust, was able to successfully launch the iPod and turn it into a phenomenon within a couple years, despite having a full set of determined competitors, including both hardware companies like Sony with years of acumen in building gadgets, and software platform companies like Microsoft which were armed with existing industry relationships with the music studios and hardware partners that Apple lacked back then.
The success of the iPod involved shipping a good product that worked well, delivered a simple but obvious premise, was marketed well by a reputable company, and hit the market at just the right point to define itself as the gold standard for its kind. That type of success is very difficult to achieve, but Apple continued to hold onto the ball with the iPod for the rest of the decade, and still retains a 71% unit share of the US market and strong international sales.
Apple then did the same thing again in smartphones, a business that was entirely new to the company in 2007 when it launched the iPhone not just as an Apple branded phone, but as a fuller-featured iPod and a functional web browser. Pundits wrote the iPhone off at the time as being a fancy toy out of the price range of most consumers, but Apple sold nearly 4 million in its first six months on sale, well above that million unit per year barrier of failure.
The next year, Apple sold well more than ten million, not including the spun off iPod touch version. At the same time, Apple has continued to sell more iPods than ever despite the obvious cannibalization effect of all those new iPod-replacing iPhones hitting the market. That’s a level of success the market doesn’t spend much time contemplating.
The iPod of Killers.
Really, where would analysts find the time? They’re all busy making assumptions that every new product that hits the market will be “the iPod of” that segment. The Kindle was supposed to be the iPod of book readers, but it turns out that not everyone has the inclination to carry around “an iPod” for each activity they pursue.
When pundits asked Steve Jobs when Apple would be coming out with a Kindle-killer of its own, Jobs shrugged off the idea by saying that people don’t even read books anymore. Of course they do, but in the sense of an activity that would sustain a standalone device, book reading just isn’t there. Apple’s solution for reading books on the go is suggested in the company’s ad which recommends downloading an app that lets you read books on the iPhone.
Technically, that experience is less ideal than the Kindle. There’s no easy on the eyes e-Ink screen on the iPhone, it’s smaller, it uses annoying color to paint up the screen, it has to be recharged more often (a serious problem for 24-hour book readers who need to sit more than five feet away from a wall outlet), and using the iPhone makes you look like everyone else, not an elitist nerd on the cutting edge of eBook readerdom.
But for 80% of the market, reading an occasional book (or more likely, web content that actually works like a desktop browser) is far more satisfying when it can be done on a pocket-sized device that also doubles as a phone, an iPod, a game machine, a calculator, a novelty fart device, and 10,000 other things in the App Store.
And that’s why, even with a nice redesign, Amazon’s Kindle is not going to hit an iPod-like critical mass to become a billion dollar market any time soon, particularly not in the middle of a long term recession where people are more worried about their jobs and keeping their homes than at any point since the Depression.
It’s not that the Kindle isn’t any good, it’s just not good enough to warrant being carried around by a large enough audience to matter. Add up all of the tech-savvy cat ladies who sit in on Oprah’s book club, and you have a narrow niche market, not another iPod.
Did you like this article? Let me know. Comment here, in the Forum, or email me with your ideas.
Like reading RoughlyDrafted? I’d write more if you’d share articles with your friends, link from your blog, and submit my articles to Digg, Reddit, or Slashdot where more people will see them. Consider making a small donation supporting this site. Thanks!