Apple Tablet vs. eReaders

January 20, 2010Jake DiMare

Excitement is growing around the imminent product announcement from Apple, which we all anticipate will be the rumored tablet computer. I recently talked with Bill Trippe, VP & Lead Analyst, Content Strategies for the Gilbane Group about whether or not tablets will threaten the eReader market. Not surprisingly, the answer was yes.
“There is a scenario where tablets, net-books and improving smart phones will eventually crowd eReaders out of the market,” said Bill Trippe. “Electronic devices with a single purpose will have a tough time competing.”
Today, as if on cue, Amazon announced a new program which cuts their royalty. This move, which will allow publishers a larger revenue share, could be a coincidence. But strategically it could prove to be a wise move if the tablet is announced. If publishers were thinking about switching platforms this move will certainly have an effect their decision. We all expect Apple to come up with a system very similar to or even integrated with the iTunes platform for distribution of books and magazines.
Long term I don’t believe simply restructuring the revenue share will be enough for the Kindle. Frankly, I am surprised anyone would invest in an electronic device which has a single purpose in the wake of “there’s an app for that”.

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