Will the iPhone Kill the Kindle?

Good news today for Amazon: Citi analyst Mark Mahaney predicts that the Kindle ebook reader will hit $1 billion by 2010. Mahaney has revised upward his earlier predictions regarding the Kindle, and now thinks that by year’s end Amazon will have sold 378,000 of the $359 device and that it will account for 4% of the company’s sales next year. The Kindle, thinks Mahaney, will be Amazon’s iPod.

Mahaney is basing his estimates on the Kindle being a must-have gift his holiday and moving 150,000 units in Q4, a modest number considering holiday numbers of other hot consumer electronics devices in recent years. But as Silicon Alley Insider points out, the Kindle isn’t a 1:1 comparison to the iPod, since most people already had a library of music they could load onto their new MP3 player. With the Kindle, users must pay about $10 per book on top of the $359 price tag for the device itself. Even with game players, such as the Wii, PS3, and Xbox 360, which Mahaney also used in his comparison, many people had libraries of games from older game players that were compatible with the new version.

What Amazon should worry about more than the higher barrier for entry, though, is that the iPhone and a potential Apple tablet could really be the ultimate eBook reader.

The iPhone Apps Store has a couple of free eBook reader apps (eReader and Stanza) that are already relatively popular, as well as a paid app (BookShelf). These apps support a number of eBook formats, like PDF, txt, Plucker, and PalmDoc. Even though the iPhone comes with a monthly fee, it also comes with a phone, a full web browser, and is a viable computing platform for a ton of other types of applications including games, which could overcome the total overall cost for many people.

And let’s not forget that there’s also the iPod Touch, which sells for less than the Kindle (8GB version).

Prior to the launch of the app platform, a pair of iPhone eBook web applications were raking in members, and given the large libraries at sites like eBooks.com, which sell books in PDF format, theoretically the same content available on the Kindle is available on the iPhone. If Jobs and company launch a larger form factor tablet later this year and manage to keep costs down (say, under $1000), then the Kindle could be in trouble.

Which would you rather have, a $359 eBook reader that just reads books and gets news and blog feeds? Or a $1000 tablet that can do anything your computer can do? (Of course, a low-ish cost tablet from Apple is a big if, but the $299 8GB iPod Touch already trumps the Kindle in everything but form factor — which may be a matter of personal preference).

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  • Sara

    Stanza on the iPhone is truly amazing. The built-in online catalog really makes it into a Kindle-like device, plus you have access to thousands of books completely free. Once they get some more contemporary titles in there (which I assume they will have to charge for), I can see it becoming the de-facto electronic reading device out there.

  • VodkaFish

    I didn’t get why there was a separate reader for books until I saw the Sony Reader and was blown away by the screen and how easy it was to read it. It’s really paper-like compared to the bright computery screens of phones and tablets. Until another device can mimic that screen, those readers will take off once they get a little cheaper, easier and nicer looking (Sony’s style with Amazon’s feature set would be a very nice product).

  • tufty

    I have to agree with VodkaFish on the screen. Before my wife bought a Sony Reader, I wasn’t convinced, but having used it myself I’m definitely converted. In my view it’s going to be sometime before a general purpose screen meets meets the reading quality of a specialist screen.

  • http://www.magain.com/ mattymcg

    I agree the iPhone has huge potential as an eBook reader. The screen is gorgeous. Apple are hurting the potential by not building file transfer into the device’s operating system. FileMagnet is OK, but it fails miserably for large size files (>10MB). I couldn’t get Caravan to work. This stuff should be built in.

  • http://www.binarysysdesign.com binarysys

    The iPhone cannot touch the kindle when it comes to reading books. I haven’t used a sony reader but the kindle is just like reading from a book. The display is amazing. Its my favorite gadget and I bought it instead of an ipod touch. For people who really like books the kindle is an easy sell. I can’t imagine reading a 900 page novel from an iPhone or iPod touch. Here are the reasons.

    – Battery power. With the wireless disabled the kindle only uses power to turn a page. I can burn through a 600 page (standard size) book and only have to recharge the battery once. I never turn it off so I can grab it and read it any time.

    – Delivery. I don’t need a wifi connection for the kindle. I can get a book anywhere there is a cell phone signal.

    – Look and feel. The display is as previously mentioned like reading a book. You don’t get the eye strain that you would from a conventional screen. Those who read several hours a day will truly appreciate just how the kindle feels. You get that book feel without the weight.

    – Amazon’s database to store your books, buy books and get recommendations.

  • Mike

    The Kindle is really expensive.. 389$ is a lot to
    spend for a reader IMHO. If there was a way to
    take my current library of books and convert or very cheaply buy (<3$ per book) I would consider it. When shopping amazon for books.. I see kindle versions and they really arent offering a cost savings (20%?).

    Mike

  • Straycat

    @binarysys:
    Having not used a Kindle, I can’t really argue as to how much better it is than the iPhone for reading books (being designed specifically for that purpose, I have no doubt it is better)… but personally, I read a lot on the iPhone – and I love it. Batter – yes – that’s an issue, but just reading books doesn’t take much power, and I can read for a long time on it with no worries about battery life.

    Delivery – no need for wifi to get books. An iPhone is, surprisingly enough, a phone.

    Look and feel. The iPhone display is gorgeous. Absolutely no eyestrain problems for me – it’s not like using a CRT. Perhaps a Kindle is better, perhaps not – but the iPhone is plenty good enough for me.

    I can still browse websites on the iPhone to get recommendations, or buy books. No problem there.

    And a huge part of it is that I don’t have to carry around Yet Another Gadget. Until I got an iPhone, I was carrying around an iPod, a phone, and a PDA. A Kindle would just add to that load. Now I just have the one gadget. Much nicer.

  • http://www.hypography.com/ kovacs

    I have used a Palm TX for years to read ebooks with the eReader application. When it was launched for iPod Touch and iPhone I instantly moved to my iPod and now read ebooks there. Fictionwise.com and eReader.com have tons of commercial (and recent) eBooks and I can purchase and download directly to my iPod.

    The iPod can’t touch readers like Kindle when it comes to non-fiction stuff which relies on screenshots, images, photos etc due to the screen size, but for “regular” books it’s a fantastic reader.

  • Jonathan

    At this time, I would agree that the iPhone is good enough of an e-book reader to hold off my purchasing of a Kindle right now.

    But, one sure boost for the Kindle will come if text books are able to be purchased on the hardware. Imagine not having to lug ginormous text books to and from class–instead, just carrying the tiny Kindle. Text books normally cost $100–$200, depending on the book. The Kindle is $359. For the price of 3 text books (not even a semester’s worth), you could purchase the Kindle. We’d just have to see what the licensing fees would be for these text books.

  • Pete D.

    I show my kindle side by side with my ipod touch running eReader and 9 out of 10 people prefer the touch hands down. The kindle screen contrast is awful when you see it side by side with a touch. The touch has 7-8 hour battery life with a modest amount of backlighting, which is more than sufficient for almost any purpose. It *has* a backlight unlike kindle. The human interface is about a zillion times better than the ridiculous jog dial on kindle.

    The screen size issue is really a straw man. I find I can read smaller point sizes easily on touch because the screen is so darn crisp and clear, so I don’t need that huge clunky screen. The only reason the screen needs to be so big on kindle is because the resolution and contrast are just so terrible on the first gen e-ink devices. And that horrendous black flashing when turning pages gives me a headache.

    I know a lot of kindle owners have bought into the amazon hype but really if you compare the kindle screen side by side it is just sad looking compared to ipod touch/iphone.

  • VodkaFish

    I can’t read anything long on my iPhone, the backlight hurts. Go outside and there’s no comparison. It’s glare vs legibility. For people who read books often and everywhere, it’s a reader, whether it’s Kindle or Sony Reader or something similar.

  • Anonymous

    This issue is one of my biggest soapboxes as I am still using a brick of a cell phone because I refuse to purchase a new one until they could give me the functionality of a phone, an mp3 player, a PDA, and a bookreader all in one device. The iPhone managed to toss in a GPS as well, which is a plus, but I am really concerned about reading on it. I would be okay with the iPhone being a little bit thicker, and having a panel that opened off of it like a book, with a Sony-reader-type screen inside for reading lengthier material. That would double the screen real estate, and take care of the low-glare versus high-glare issues.
    The price of books in electronic form is a slightly different issue– but still pertinent and rather alarming. They want us to pay $10 for a digital version, when a paperback costs $8? There are no materials to account for, and I can’t believe that they don’t have (at least the newer books) in digital form somewhere already. I wish I knew to whom I could write a letter and demand justice!

  • Anonymous

    I should clarify (to assure everyone that I am actually replying to the main post and not blathering for my own edification): I think the Kindle’s price is crazy for a device that essentially allows you to read, and although it will eliminate the need for carrying many books at once, it is in the end, just one more device taking up space in my purse. (PDA, Phone, mp3 player, and a book reader? I’d rather take my $8 paperback.) I would choose to read off the iPhone’s smaller backlit screen any day if only because it does so many other things I need.

  • Gabe

    I really wanted a kindle for my birthday last year, but when the product sold out, I started to look around for an alternative on my BlackBerry (wait for it). I found MobiPocket, downloaded a book OTA and started to read.

    You know what, it’s not half bad. Given the fact that my phone is with me everywhere, and I’m super used to reading emails on my BB anyway – the truth is that reading a book is much less jarring on a mobile than you’d think. You just need to give yourself some time to get over your first negative reaction, and then you’ll find tremendous joy in being able to pick up and read *anytime* you have a few spare minutes, and the ability to carry 10 different books in your pocket at once.

    It’s a revelation – and even when (if) I upgrade to the iPhone, I *won’t* be buying a Kindle.

  • Anonymous

    One key thing that everyone is leaving out, is that the Kindle is basically in a paidbeta right now. People – like my boss – who bought into it are paying for the R&D needed for a better second version. Also, a second version is likely to be cheaper. The screen is pretty much an electric Etch-A-Sketch and if you smash it at all or drop it – like what happened to my bosses during it’s first shipment – the screen is obliterated immediately. All things considered, the Kindle is incredible compared to the I-anything in concept.

    My opinion is that the Kindle is a great idea, but sucks in it’s current form. Wait for the next one to come out (I bet it happens right before next Father’s Day), and you won’t be getting hosed on it.

  • http://www.dangrossman.info Dan Grossman

    @VodkaFish: That’s what Kindle is. It’s got the same style “electronic ink” screen… plus Amazon.

  • http://www.patricksamphire.com/ PatrickSamphire

    For me, there are lots of problems with both Sony Reader and Kindle, in terms of functionality. See, with an iPod and music, I can rip my already-owned cds, back up on cd or other device anything I buy from iTunes (and play/transfer it to another device), carry every song I could ever hope to own around with me in something that fits in my pocket, store music in a non-proprietary format (MP3), put on my own material if I want to, and so on.

    Both Kindle and Sony Reader do the text-equivalent of some of these things, but not nearly enough of them.

    As one of the anonymouses says, they are both essentially beta right now, and they *are* easier to read than backlit screens, but until the stop trying to lock in their own content to their own devices and start to cover issues around transferring data between devices and backup, they aren’t anything I’d be willing to invest in.

  • Steve P.

    the mahaney figures have been proven false, amazon themselves called them “extremely high”.

  • BobbyJones

    iPhone is killing Kindle now, you know we can now read e-books through it. But I still have a question hanging on my mind, when are they going to make it possible to grind wow gold on any phone or specifically on iPhone?

  • MikeT

    Well the predictions all proved false. The market for iPad and Kindle have proven to be different. The iPad has its’ critics, but there don’t seem to be too many for the Kindle.

    Now the Kindle is $79 and the latest Amazon tablet is $199 – colour, touch, Android… now we shall see how Apple reacts. The iPad has been a source of huge revenue to them but it is, IMO, overpriced.

    Time will tell whether Amazon will compete. All I know is, I just ordered my third Kindle, I own 2 MacBooks and an iMac, but I have never owned an iPad.