Reading Steve Jobs: Why 45 e-reader devices don’t make a market

As I develop the coverage here at BooksAhead, I have decided that trying to break news stories about e-reader devices doesn’t add a lot of value for the reader, especially when there are few differentiating features or functionality. Way back in the early 90s, when a new Ethernet interface card for the Mac—I was networking editor at MacWEEK—it became clear that an occasional summary article covering all the recent releases would be more useful than many individual articles announcing yet another Ethernet card.

However, sometimes a real breakthrough would come along, and that would get an individual article. The most important change in the early networking card market was something subtle and largely unheralded: The addition to writable ROM chips to cards eliminated the need to return a card when its software was defective. Yet, for several years, Ethernet card developers hesitated to include EPROMs in their products. Once they did, new features proliferated, such as Simple Network Management Protocol (SNMP), because cards could be updated in response to changing technology rather than having to be replaced. It sounds trivial, yet it made a huge difference.

The e-reader device market is looking a lot like the Ethernet card business back then: It’s a developing commodity market. Price is becoming the only differentiator, but the functionality is still very limited compared both to books and what e-books could be. The action will soon turn squarely on format and networking of documents, just as the Web became relevant when the browser changed hyperlinks from navigating between documents to navigating within parts of many documents.  Two hundred years ago, Thomas Jefferson designed a bookstand for reading several titles to accommodate the limitations of books (the idea is older, but Jefferson’s is one of the most elegant solutions to the problem). Readers want to use books and the knowledge and enjoyment they contain, not just consume them.

I’ve been doing a lot of thinking about this issue since I wrote about the ePub standards maintenance process beginning a couple weeks back. There are huge business opportunities in the connecting of texts, and I’ve been discussing business opportunities around that rather than writing here. Sorry about that.

With 45 dedicated e-readers in the market and counting, not to mention the numerous applications for PCs and smartphones that display e-books, the limitations of all the formats are becoming increasingly clear. Reading books one at a time, following breadcrumb trails back and forth between a library home page and different books on a device, is incredibly inefficient. Books—no, texts—need to be talking to one another, exposed within one another, to make flipping between pages and different books simple and, most importantly, additive to the reading experience. ePub, because it is still tightly bound up with DRM and simplistic ideas about reading, isn’t the whole answer (though the inclusion of XML islands in the ePub spec lays the groundwork for readers that can keep many documents with many interconnections open concurrently).

Compatibility between documents and devices is only the first step in the long journey to the future of reading.

You won’t find how-to and buyer’s guide information here. I’m interested in the future of reading, which requires a bit of reflection, a good night’s sleep on any news in order to put it in context. Here, we will talk strategy and technology choices, not how best to spend your money on a device that will be obsolete as technologists and publishers innovate. While today’s devices can be updated over the Net, they are limited by design choices that conceive of displaying words on a page as the essence of reading. Texts change and grow, even in paper editions. That can happen in real-time today, changing the text (including non-textual features) dramatically.

Based on what I hear about Amazon’s eager discussions about having its reader software in non-Kindle devices, even Jeff Bezos is really more interested in the text than the devices that can read them. This brings me to Steve Jobs, CEO of Apple, who was quoted this week talking about e-reader devices. He told The New York Times:

“I think people just probably aren’t willing to pay for a dedicated device,” he said. “You notice Amazon never says how much they sell; usually if they sell a lot of something, you want to tell everybody.”

Jobs thinks in unit sales in the tens of millions within three years. Amazon, by my estimate, has sold about 800,000 Kindles. By contrast, more than three million people have downloaded ereader software for the iPhone. Jobs isn’t make a sleight at Amazon, he’s simply saying what’s obvious: The dedicated e-book reader is a wedge product to drive adoption of e-book formats.

Contrary to the assessment that Jobs “still doesn’t think much of dedicated e-readers,” I think we should read between the lines and recognize that, if Apple is going to launch a tablet, Amazon has already told Apple it wants the Kindle reader apps on the device. The potential for conflict arises when the question of where the books will be bought is asked. Apple has long had a relationship with Audible, since before it became a part of Amazon, to sell downloadable audiobooks for iPod and iPhone. Some form of partnership will likely emerge between Amazon and Apple. It will be a miracle if Apple signs an exclusive with Amazon; that would be Jeff Bezos’ biggest coup yet. Don’t look for it to happen.

The dance between Jobs and Bezos is clear in what Jobs said after the quote above. The Times‘ David Pogue reports in his blog that Jobs added (the quote comes via TeleRead):

“I’m not sure that Amazon, as an example, really cares that much about being in the hardware business. If I were Amazon, I’d love selling stuff where I didn’t have to have a warehouse, didn’t need UPS.”

That is one CEO telling another that together they can earn higher margins.