The Reading World

CrunchPad illusion after all


Mike Arrington has announced his CrunchPad web tablet, covered here, is “dead”, blaming his manufacturing partner for cutting him out of the deal. In the frothy market that is media tablets, just as in other frothy markets Arrington has stirred up, this is a story suspiciously full of holes that make CrunchPad sound like a stunt all along rather than a real project.

Bizarrely, we were being notified that we were no longer involved with the project. Our project. Chandra said that based on pressure from his shareholders he had decided to move forward and sell the device directly through Fusion Garage, without our involvement.

Later, Arrington insists other manufacturers have offered easy terms to him for the rights to manufacture the device and that he had “blue chip angel and venture capitalist investors in Silicon Valley waiting to invest in the company since late Spring. We were simply holding them off until we launched, to eliminate some of the risk.” If he’d said they were holding off for better terms from VCs because the device had launched, I’d have found this plausible. The whole story is too nice to be taken at face value.

Because Arrington, a lawyer, discloses that he never controlled the intellectual property rights to the CrunchPad, other than the trademark, and apparently had very poorly formed business agreements around the project with Fusion Garage, his manufacturing partner, this has the look of a great deal of smoke around something he’d agreed he could market without understanding the business, design and development challenges. At one point, he suggests most of the project was “pushed to open source,” but then why is it impossible to build it with another manufacturer?

Arrington claims that “prototype b” of the CrunchPad was completed by his in-house team. Certainly, it would have represented the major functional features of the design, which, if open sourced, should be available for his use in providing a functional spec to other manufacturers who could have come up with their own solutions with different components. Since he writes that his team had the release candidate device running Win7 and a version of Chrome OS, the components involved surely are commodities supported with well-documented drivers and toolsets.

Why take apart the death notice like this? Tablets and e-readers are the hottest “category” in consumer electronics, with a glut in e-readers and many media tablets on tap for 2010, customers need to read between the lines of announcements that promise revolutions but may represent black holes for their money and time. In this case, Arrington has created expectations that a $250 touch-screen device can be expected to do what consumers want, to “surf on the couch.” He created a baseline expectation that has proven to be out of line with what is possible today. It is certainly possible in six months or a year, yet customers don’t need the noise of empty promises to add to the complexity of making buying decisions.

It sounded too good to be true and it was, yet there are plenty of people who want to buy the idea and will now say it could have been done if not for a legal showdown. Customers need real world class champions of products, not contenders who tell us they could have or should have won if only the breaks had gone their way. Customers’ time and money is too hard won to expect less.

Author & Publisher Strategies Book and Reading News

Smashwords gets Kindle distribution deal

Smashwords, the e-book self-publisher services company, is for real. The company has won a series of distribution deals, including through Barnes & Noble, Sony and Shortcovers e-book stores. Today they added Kindle distribution, paying authors 42.5 percent of the sale list price of their Kindle books.

As an author services play, Smashwords has sped to the front of the pack for e-book authors. Congrats to Mark Coker and team.

The Reading World

Headline 2010: e-Reader device failure

The market knows best, right? Markets are bloody paths to progress. At this writing there are approximately 52 e-reader devices coming to market in the next 12 months. Fifty-two different devices coming to market (Here’s what I wrote about Steve Jobs’ approach to reader devices when there were just 45 e-readers on the horizon). Creative, the maker of MP3 players and computer audio cards, is the latest to announce their impending arrival, Zii MediaBook.

This is the definition of “glut” becoming reality. We can see a glut of e-readers coming and there’s no waving off the Kamikaze piloting most of those e-readers toward the deck. Will they blow up the fuel supply needed to get the next generation of e-reading off the ground? No, but the coverage will likely make it sound like e-reader failures mean e-book failure.

With excessive abundance comes failure, and that spectacular conflagration of hardware products, unfortunately, will dominate the headlines in this market next year as many, indeed most, of these devices are pulled due to lack of sales. They are ridiculously expensive for a market where the vast majority of customers buy one book or less a year—more than 180 million Americans don’t buy a single book in any year.

Many hardware makers will retreat and e-books, not the glut, will get the blame.

Today’s dedicated e-readers sell for roughly 10 times the price of a new hardback book. Most people don’t buy hardback books, so for argument’s sake, let’s say the average price paid for a book by the 120 million Americans who buy a book each year is $12. Amazon Kindle2 and Barnes & Noble’s Nook, both of which sell for $259, cost as much as 21.6 books, which suggests they break the book-buying budget for most people. I don’t want to suggest there is a magic price for reader hardware, because we’ll see some of the new e-readers announced this year selling for $59 next year, because retailers cannot get rid of them. That is a result of fierce competition, but leave it to the press and bloggers to turn the whole process into a mandate on e-books, not the expensive hardware.

This isn’t a horse race, but a complex evolutionary event, that cannot be reduced to headlines. Consider: “T. Rex extinct, world awaits silence of lifelessness” would have made the papers, if dinosaurs had had their Gutenberg.

Yet, it’s a short step from “people don’t want e-readers” to