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ok22

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Anyways, in light of what you wrote, I would counter argue that MP3 players were a saturated market when Apple's Ipods came out.  Till this day, I'm not sure how Apple pulled it off in a crowded market, and still managed to pull ahead even with Microsoft setting its target with Zune.  I believe Ipod vs. Zune was won due to entrenchment, and Ipod vs the earlier MP3 players was won due to design features, iTunes, and Apple's brand name.  We'll see how it plays out with Kindle vs. all.  No amount of analysis is going to determine the winner.  

 

The publishing industry has the music format experience to look back on – there is no way they want a similar closed platform where they have little say.  But keep in mind that the music format actually went digital back in the late 80’s with the introduction of the CD.  Books are just now going digital.    There is way more that you can do with books going digital (especially under an open platform) than you could with CD going to mp3/iPod.  AMZN is trying to make e-books ‘book like’.  Imagine if Apple had tried to make the iPod 'vinyl like'!!

 

Yes, there are a lot of devices coming out --- tons and tons.  For that there are similarities.  But there are some big differences.   Book retail is not as fragmented as music retail was.  Yes, some book retailers are in trouble but there are some strong dominant players also.  The publishing industry is huge, and many of the players provide a more viable service than record labels.  The other big difference is the times we are in --- there is a big push toward open format for many platforms (think Android).  Realizing there are some viable open platform alternatives, publishers are currently taking a stand against AMZN in delaying ebook releases. By under-pricing ebooks, AMZN has been trying to undermine the value of ebooks rather than trying to create value.

   

I agree that it’s going to be hard to predict who wins the device war.  But as for the content platform --- you have the bully approach of AMZN versus a relationship approach from someone like kobo.  If the publishing industry is a pushover --- then AMZN wins.  But I see this being more about relationships -- AMZN will have to adapt to that reality.

 

It also mentions that for the first time ever more e-books were sold than paper books on Christmas day.

 

I noticed that AMZN released this propaganda the day after Christmas.   One would have to think that Christmas day would be the weakest day of the year in terms of on-line paper book sales by far.  People don’t suddenly wake up Christmas morning with a paper book gift and say "hey this is so darn neat I am going to order another!!” ..... but if they wake up Christmas morning with a Kindle ..... of course they have a big incentive to try it out.  Considering how strong Kindle sales were at Christmas – beating paper book sales was a given.... you could have predicted that months ago.  AMZN used the opportunity to promote some propaganda – it gave me a good chuckle.

 

Also, imho the single biggest advantage to the Kindle is the ubiquitous cellular network connection, plus the direct tie in to Amazon's catalog’

 

Amazon’s catalog is not as significant as you think.  The AMZN catalog currently stands at at 390,000 titles (including free).  In a short 9 or 10 months Kobo has got to 200,000+ paid titles and 1.8 million free titles.  Much of the free titles are thanks to the trust kobo has established with the Internet Archive.  For free titles .... AMZN would appear left in the dust until Google Editions can come up with some sort of litigation settlement.  In the mean time kobo keeps closing the gap as to paid titles .... and are going global in a big way.  Long term, I doubt there is any moat with this ubiquitous cellular network -- but if there were it only applies to the States --- certainly not global!

 

 

Other readers/devices might be better on a feature-by-feature comparison, but that's missing the point, like all the analyses of mobile devices vs iPhone that fail to consider the immense advantage conferred by the immense installed base of iTunes and the iTunes ecosystem.  

 

What the Kindle cannot do is transport a library from device to device.   Imagine for a second if 10-15 years ago you could NOT take your excel spread sheet or word document from your Dell to your HP.   Flash forward to today and imagine if you could only read your email on your Dell ..... NOT on your HP, NOT on your smart phone or any other device you might own in the future.... this is really what the Kindle is trying to do with their ebook strategy.   Yes Apple managed to create a monopoly at the moment with their closed iTunes ecosystem --- but the story Apple will be forced to watch unfold will be Android.  

 

Ebooks have barely entered the first inning in terms of anyone gathering an immense installed base.  The closed format era would seem to be ending --- we are shifting toward an era of open.

 

UCP / DD

 

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Ebooks have barely entered the first inning in terms of anyone gathering an immense installed base.  The closed format era would seem to be ending --- we are shifting toward an era of open.

 

I agree Amazon needs to support some open formats. My wife gave me a Barnes & Noble "Nook" for Christmas, and so far I love it.  It works like a Kindle with some important differences.  You can load it with ePub or PDB formated documents, as well as easily load PDF files onto it.  I've got tons of ebooks in PDF format on my computer that I've been wanting to read but I hate reading on a computer screen.  Also I've found free epub format books on line as well.  I know kindle lets you read pdf files, but you have to email them to get them on the device. The nook simply lets you hook it up to your computer via a USB cable and drag and drop them onto the device.  Much easier.  It also comes with free G3 mobile Internet like the kindle, but uses my wifi when I'm at home which is faster.  Searching through the B&N catalog it seems that they have better pricing then Amazon and even many free choices.  All that with the ability to let other Nook users borrow books from your library.

Also the color touch screen is a nice touch and easy to use, I think we'll be seeing more of this type of thing in the future on ebook readers instead of Amazons approach with a ton of buttons.

 

I think Amazon needs to make the kindle more open format friendly, make it easier to load it with your own content (get rid of the use of email to load files onto it), and a way to share ebooks is an excellent feature that the Kindle lacks.

 

--Eric

 

 

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Thanks for mentioning the Nook.  I was just thinking last night about getting one of these ebook readers for my wife, after printing out a whole book on a laser printer and seeing how much paper was wasted.  I wonder, instead of betting on the companies creating the ebook readers, anyone thought of betting on the suppliers?  In particular, the screen manufacturer EInk that makes the Vizplex.   Probably not a public company.

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  • 1 year later...

The Kindle Fire is pretty impressive looking, especially at that price. They're apparently selling it for a loss to get people to purchase their products.

 

Everything I have read is the Kindle Fire tablet is locked into the Amazon Market with no access to the Android Market.  Something to be aware of.

 

I'm impressed by the new kindles. Amazon did better than I expected (from what I can tell - I haven't tried them yet).

 

FWIW, Mark Zuckerberg owns a Kobo:

http://venturebeat.com/2011/09/27/kobo-pulse-ereaders-social/

 

Kobo still remains the underdog in this race - but they certainly are being more innovative at this juncture.  Kobo was the only e-reading company of significance to participate in the very recent Facebook F8 Live event - obviously their platform is designed better to partner with Facebook and other social media such as Twitter.

http://www.livestream.com/F8live

 

 

That's speaking as a content consumer, not as an investor, though...

As a content consumer one has to think that being device agnostic should be at the top of the list.  Kobo Pulse along with the whole platform is very unlike Amazon and Apple's locked models. If Amazon is Apple's nemesis, then Kobo is Kindle's - it's been an interesting first inning thus far. 

 

As an investor, I find IDG (Kobo's parent) dirt cheap.

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As an investor, I find IDG (Kobo's parent) dirt cheap.

 

Dam is their main business getting killed, it's been on my watchlist since Vito Maida disclosed he owns it.

 

I bough books from Indigo and Amazon and Amazon is usually cheaper. Altough if the canadian dollar continues to drop it might change the trends...

 

BeerBaron

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As an investor, I find IDG (Kobo's parent) dirt cheap.

 

Dam is their main business getting killed, it's been on my watchlist since Vito Maida disclosed he owns it.

 

I bough books from Indigo and Amazon and Amazon is usually cheaper. Altough if the canadian dollar continues to drop it might change the trends...

 

BeerBaron

 

If you are talking about the last few quarters where they are expending significant amounts rolling out Kobo and transforming bricks and mortar -- I think the payoffs for this will be seen in the future.

 

For Bricks and Mortar business,  Ted Marlow was recently assigned the COO position -- Marlow played a significant part in Urban Outfitters outstanding success.  As ebook sales cannibalize physical book sales -- it opens up floor/shelf space -- intelligently executed there is an opportunity to bring in new merchandising initiatives at higher margins. 

 

For Kobo, E-Books are about 2 years behind in Europe and elsewhere globally.  Kobo is moving aggressively into the global market with high expectation of being #1 outside the USA.  To execute, they are hiring senior management and partnering with retailers that have strong relations with the publishing industry.  Amazon does Not have the jump globally that they had in the US.  Publishers hate Amazon - it's kind of funny but I ran across a thread the other day where Canadian Kindle/AMZN customers are blaming IDG for AMZN's poor relations with their publishing suppliers, etc:

http://www.amazon.com/forum/kindle/ref=cm_cd_pg_oldest?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdPage=1&cdSort=newest&cdThread=Tx1ZC9FLDVRU4KV

 

I do not see IDG being killed by anyone - in fact to the contrary.  As per the above link, a Kindle is a pretty bad idea if you are in Canada.  IDG has a near monopoly on it's home turf.  AMZN had perhaps threatened this somewhat with the online sales model - but it's well known that online book sales are at the front line when it comes to sales moving toward the digital realm - so Kobo stands to regain much of the lost business to AMZN over the years.  Same goes with the partnerships with Walmart and others.  The Cndn moat is currently widening with the Kobo initiative. Smart moves are being made in pursuing the huge global opportunity and they are biting at Amazon's ankles for a higher market share in the US. IDG is a world class company trading at an unbelievable discount.

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I'm impressed by the new kindles. Amazon did better than I expected (from what I can tell - I haven't tried them yet). That's speaking as a content consumer, not as an investor, though...

 

Indeed. It's not only the Kindle Fire, but new Kindle Touch at 139USD , Kindle Touch 3G at 189USD andbasic Kindle at 109USD.  Now if they'll come out with a new DX TOUCH I'll definitely be getting one.

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The Kindle Fire is pretty impressive looking, especially at that price. They're apparently selling it for a loss to get people to purchase their products.

 

Bezos is not Steve Jobs when it comes to giving presentations however.

 

I wonder if Mark Zuckerberg would put his name behind the rumoured Kobo Vox tablet launch -- or perhaps a co-effort with other Facebook app partners -- say a Netflix-Kobo Vox.  Food for thought.

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  • 3 weeks later...

 

It was officially announced today, the Kobo Vox - 'The peoples Voice (Vox Populi)"

 

Here are some positives worth noting:

- Price matches Kindle Fire at $199.99

- Delivering about 18 days ahead of KF (Oct 28 vs Nov 15)

- Comes with an AFFS+ screen which is arguably better than IPS (which both KF and NC use).  Note: AFFS+ technology is used in airplane cock pits.

- Same on board memory as KF (8GB) - however, KV is expandable to 32GB (KF not expandable at all)

- Comes with Android 2.3 (Gingerbread) and would seem to have access to Google Market Place (but check this). The open nature of the device would seem to indicate you are not locked into Kobo's store.  Might require further clarification - but it would seem they are not locking out other reading apps (Kindle, B&N, etc).  KF is locked to Amazon app store.

- A gift of 7 newspapers of your choice (I don't know for how long)

- 12 Free popular magazines

- Available in 4 colours

 

Offsetting the above positives I found one negative:

- KV's processor is similar to NC but is  slower than KF.  KV has an 800 MHZ single core processor vs a 1GHZ dual core for the KF.  I guess that is why they are referring to the KV as a reader (not a tablet). 

 

So KV would seem more suited for heavy reading but lighter on the media or gaming side (probably something that would suit many requirements here) -- check it out: 

 

http://www.kobobooks.com/kobovox

http://latimesblogs.latimes.com/technology/2011/10/kobo-vox-tablet-kindle-fire-nook-color.html

http://business.financialpost.com/2011/10/19/kobo-wades-into-tablet-wars-with-launch-of-kobo-vox/

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Tablets wars: Apple is from Venus, Amazon is from Mars

By Om MalikSep. 29, 2011, 12:01am PT

 

Amazon’s revenues and profits come from selling goods and services. For Amazon, the tablet is the lure and e-commerce is the catch. Apple, on the other hand, makes money by selling hardware, lots of it. Apps and digital goods and services are a way to attract people to its hardware platform.

 

Apple makes a lot of money — as in real dollars — from its hardware. Amazon is going to lose a lot of money on this hardware-based reinvention of its core commerce business for a long time.

 

http://gigaom.com/2011/09/29/tablets-wars-apple-is-from-venus-amazon-is-from-mars/

That is, if Apple can maintain its edge and premium pricing.

 

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Obviously anyone Interested has seen amazon's latest results.  Not pretty.  They had better hope that the mobile web browser takes off.  Alot of competition in the cheaper tab space now.  That's alot riding on a device that is over two years late to the game.  I would short it but it appears too late. 

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Guest valueInv

Tablets wars: Apple is from Venus, Amazon is from Mars

By Om MalikSep. 29, 2011, 12:01am PT

 

Amazon’s revenues and profits come from selling goods and services. For Amazon, the tablet is the lure and e-commerce is the catch. Apple, on the other hand, makes money by selling hardware, lots of it. Apps and digital goods and services are a way to attract people to its hardware platform.

 

Apple makes a lot of money — as in real dollars — from its hardware. Amazon is going to lose a lot of money on this hardware-based reinvention of its core commerce business for a long time.

 

http://gigaom.com/2011/09/29/tablets-wars-apple-is-from-venus-amazon-is-from-mars/

That is, if Apple can maintain its edge and premium pricing.

 

What premium pricing?

 

http://www.nytimes.com/2011/10/24/technology/apples-lower-prices-are-all-part-of-the-plan.html?_r=1

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Tablets wars: Apple is from Venus, Amazon is from Mars

By Om MalikSep. 29, 2011, 12:01am PT

 

Amazon’s revenues and profits come from selling goods and services. For Amazon, the tablet is the lure and e-commerce is the catch. Apple, on the other hand, makes money by selling hardware, lots of it. Apps and digital goods and services are a way to attract people to its hardware platform.

 

Apple makes a lot of money — as in real dollars — from its hardware. Amazon is going to lose a lot of money on this hardware-based reinvention of its core commerce business for a long time.

 

http://gigaom.com/2011/09/29/tablets-wars-apple-is-from-venus-amazon-is-from-mars/

That is, if Apple can maintain its edge and premium pricing.

 

What premium pricing?

 

http://www.nytimes.com/2011/10/24/technology/apples-lower-prices-are-all-part-of-the-plan.html?_r=1

 

Makes sense.

 

Built a customer base with an image of luxury, high quality designed products + sound ecosystem and then obtain a competitive advantage by using your economies of scale to lower your fixed costs/product and raise efficiency to drop prices without lowering quality.

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Guest valueInv

I agree with you guys on that. I order a lot of stuff from Amazon, including while shopping online from my iPad, but I don't feel like I would spend more money on Amazon products if I was using the Kindle Fire.

 

The value of Kindle Fire is dubious. Sure, people will buy books but music and movies? Who wants to lug around a tablet to listen to music at the gym? Also, Reed Hastings made a comment that most of their streaming is to laptops and devices like AppleTV.  They are seeing little traffic to smartphones and tablets. Makes sense. How many times have you wanted to watch a movie on your iPad? Maybe when you fly or when you want to keep your kids occupied during a long drive. Otherwise, you'd simply watch it on your TV.

 

Time will tell if Amazon got its business model math correct. Otherwise, they just killed the profits for most vendors in the tablet market for no reason.

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Personally I'm a big fan of Bezos and have been a shareholder for a while. I remember how many people doubted his strategy of "making products" when he launched the Kindle (me included); Now try to take my kindle away and see what I do to you  ;D

 

I will probably get a Kindle Fire because the one problem I've had so far is with reading PDF files and I tend to read many of them and a tablet seems to be the answer (along with reading magazines and newspapers etc...) and I don't want to pay up to get an Ipad.

Plus all signs have been pointing towards the pre oder numbers for the Kindle Fire being off the charts.

 

http://m.ibtimes.com/amazon-earnings-release-jeff-bezos-kindle-fire-3g-prime-apple-ipad-237518.html

 

 

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What about the fact that e-reader apps on the iPad or iPhone cannot in any fashion direct users to their own stores for media purchases? 

 

Apple's App Store policy forbids Amazon, Barnes & Noble, and Kobo from allowing in-app purchases and from directing people to their own stores.  That's because Apple wants a cut of any media purchased while using an iPad; making the Apple storefront the easiest to use on the iPad is a way of shifting sales from those guys to it.  If it could, Apple would probably try to take a 30% cut of any sales made by AMZN and the like on the iPad.

 

The Kindle Fire is all about point of sale.  If people start shifting more of their time from PCs to tablets, then Amazon has to be worried that Google and Apple will make it far easier to purchase media from their stores rather than Amazon.  Bezos understand this and is willing to break even on hardware in order to keep his store a big player in the sale of digital media.

 

Jacob Wolinsky just posted an excellent interview with Tom Russo where he discusses how WEB's capacity to suffer is a huge strength.  Geico had to book $250 of operating losses for $1500 of NPV per new customer.  Wall Street, of course, couldn't handle this.  So WEB was able to buy up Geico for a fair price.  Think about that, and then think about what AMZN has done in the past to build its business. 

 

Bezos is a great businessman.

 

Having said all of the above, I don't own AMZN, and I haven't done a financial analysis of the company.

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