Analyst: Apple turns its back on e-book market

Computerworld - Amazon.com's release of a free e-book reader for the iPhone proves that Apple is simply not interested in the electronic book market, one expert said today.

"It's a very smart move for Amazon, which first and foremost is in the business of selling books," said Gartner Inc. analyst Van Baker. "Adding the iPhone [reader] is smart and will solidify their position as the go-to source for e-books."

But the fact that Apple allowed Amazon to offer the Kindle for iPhone application through its App Store is a sign of a different kind, Baker continued.

"The reader adds to the appeal of the iPhone platform, but it also shows that Apple clearly doesn't think that the e-book market is important," said Baker. "Apple hasn't gone down the e-book content acquisition road, and this makes it obvious that Apple does not want to be in the e-book distribution business."

That jibes with Apple's public position, which was expressed by CEO Steve Jobs more than a year ago when he was asked his opinion of Amazon.com's first-generation Kindle. "It doesn't matter how good or bad the product is, the fact is that people don't read anymore," Jobs told The New York Times in January 2008. "Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don't read anymore."

What Apple has done, said Baker, is boost the profile of the iPhone and iPod Touch by letting Amazon.com distribute the Kindle reader and sell e-books to owners of those devices. "The reader enhances the devices, and does that in an area where Apple chooses not to compete," Baker said.

Other analysts yesterday agreed with Baker that the Kindle for iPhone application is a win for Apple as well as for Amazon.

But if there are two winners, Baker believes Amazon.com got more than it gave. "The iPhone becomes a seeding platform for e-book distribution," he said, and an upsell opportunity for Amazon.com. "At a minimum, I think a lot of people with iPhones are going to try [the Kindle reader]. When they do, some will say, 'I'd like to download directly, and I want a bigger screen, so maybe I should buy a Kindle.' "

Amazon.com's executives certainly hope so, with several quoted in news reports yesterday saying that the company sees Kindle for iPhone as a companion, not a cannibalization threat to the dedicated Kindle and Kindle 2 electronic readers.

Baker echoed that. "Reading is going to be different on an iPhone than a Kindle," he said. "On a Kindle, you can read 30, 40, 50 pages at a time because the experience is more like turning the pages of a book. But on an iPhone, it's much more likely that people will read a few pages at a time.

"It'll be a 'bursty' kind of reading on the iPhone," Baker said.

Kindle for iPhone can be downloaded free of charge through Apple's iTunes App Store. It requires an iPhone or iPod Touch running iPhone 2.1 or later.

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