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Kindle Fire HD Sold At Cost – Jeff Bezos

People have generally assumed that Amazon was subsidizing the Kindle Fire to some degree.  Analysts have estimated that the cost of materials and manufacturing was roughly equal to the asking price and when the first Kindle Fire was launched it was suspected that Amazon could be losing as much as $15 per device to keep the costs down.

When the first Kindle eReader was released, Amazon’s position was that the hardware had to justify its existence by providing profits separate from the digital content sales it encouraged.  With the frequent price drops that have occurred in the past few years, that’s obviously harder to stick to.  The Kindle was first priced at $399 and sold out in a matter of hours.  Now you can get a basic Kindle for just $69, so it’s hard to imagine the money coming in at the same rate.

The new position makes more sense given Amazon’s digital content ecosystem.  Bezos has come out and said, for the first time, “We sell the hardware at our cost, so it is break-even on the hardware.”  It isn’t a surprise and it certainly isn’t going to upset the status quo, but the confirmation of even fairly obvious suppositions breaks the secretive pattern that generally surrounds Amazon’s hardware business.

This is a convenient way to highlight the differences in sales philosophy between major competitors at a time when Android tablets are drawing roughly equivalent in both price and performance while Apple is rumored to be releasing a smaller version of the iPad before the holidays.

Apple, for example, is not known for releasing any hardware they can’t make at least a 40% profit from.  This is the biggest point against the constant rumors of iPad Mini development.  The only reason it’s becoming likely that Apple will release a smaller iPad at this point is the possibility of being shut out of a growing market.  Even then we can expect them to be getting significant return on each sale.  They’re not a company that’s willing to settle for the 30% cut they get from every sale of associated content.

Google, on the other hand, sells their Nexus 7 at cost with the expectation of a different return.  Yes they have a return from their Google Play sales, but the real money is in information acquisition.  Android is available for free to anybody who wants to use it because unless significant effort is made to avoid it, Android ties people into the Google system.  That means more marketing data and more potential for advertising revenue.

Amazon’s course, hoping that cheap devices will result in such a significant increase in sales that it will be worth the initial investment so long as no money is actually being lost on the hardware itself, may be the least obviously profitable of these.  Their experience and expertise when it comes to suggested sales and media serving make it totally believable that the Kindle encourages people to read four times as much as they normally would, but it’s not something that many other companies could hope to pull off.

Mini iPad Rumors are Back; Kindle Fire Under Attack?

This is not the first time we’ve heard talk of a miniature iPad.  In fact, I’ve detailed here on the site exactly how little sense it makes for Apple to release such a device on more than one occasion.  Despite the ongoing lack of such a device from Apple, people keep declaring that it is right around the corner waiting to wipe out the Kindle Fire on a moment’s notice.  For once, they might be half right.

The cost analysis I did in the past is still relatively accurate.  Apple has a reputation for putting comparatively large markups on their devices.  An iPad Mini that offered them minimal profits would definitely not be attractive in most cases, especially since it would inevitably eat into existing iPad sales to some extent.

Let’s assume, however, that they have found a way to cut costs significantly.  The latest rumors are pointing to a seven inch tablet that lacks the Retina display Apple devices are becoming known for.  It would also have comparatively little on-board storage space and other such corner cutting measures to being margins up to acceptable levels.  The big question is why they would bother?

Let’s face it, there has not been a good substitute to the iPad thus far.  No matter how much I love the Kindle Fire, it is a very limited device.  That’s all it was ever intended to be.  The Samsung Galaxy Tab is the closest anybody has come and even there, it’s hard to decide.  The situation has changed recently though.

Google’s Nexus 7 tablet, and the anticipated Nexus 10 follow-up, makes a compelling argument in favor of Android as a viable tablet OS.  No other Android device has managed to create such a positive general use experience for such a lot price.  Apple might feel the need to respond to that somewhat.

More likely, however, would be the rise of the Windows 8 tablet.  The recently previewed Surface tablet developed in-house by Microsoft is powerful, easy to use, and fairly obviously aimed at besting the iPad feature for feature.  If they price it to match as well, Apple might finally be in a bit of trouble despite the large existing user base locked into their ecosystem.

The new Kindle Fire 2 might play into the equation as well, but that’s a long shot.  Amazon did take the Android world by storm last year when they priced their device well below anything comparable.  It is likely that this low pricing will continue and that customers will get a great value out of the next Kindle Fire as well.  Even a ten inch tablet from Amazon is hardly going to trouble Apple at this point given the more serious competition that is showing up lately, though.

An iPad Mini could bite into Kindle Fire sales if it is ever released.  Price and name recognition go a long way.  Nothing has better name recognition than the iPad so a model priced at or below $300 would likely be a huge hit.  It wouldn’t make much sense for Amazon’s device to be the reason for that sort of release, though.  The Kindle Fire has never been direct competition as a general purpose tablet.  It’s just a good way to get your Amazon content conveniently delivered.

Kindle Fire vs Windows 8 Tablets: Another Pointless Comparison

There is essentially no competition to be found between the Kindle Fire and any imaginable Windows 8 Tablet at this time.  I’ve touched on this a bit here already immediately following the announcement of the Microsoft Surface tablet, but it’s come up in emails and various other places often enough since then to be worth revisiting.  They are catering to completely different needs, price ranges, and purposes.  I doubt this comes as much of a surprise to anybody, but let’s hit the high points again.

The comparison ends up being very similar to that of the iPad vs the Kindle Fire.  It is inevitable that people will compare them.  After all, they are both tablets.  Add to that the fact that they are both extremely popular and that each is backed by one of the biggest companies in the world right now and the parallels are too clear to ignore.  Stepping past the most superficial aspects gives us a much more meaningful understanding.

In the case of Windows 8, we’re looking at a tablet OS that is deliberately formed into something that could replace a laptop.  The Surface is the ideal example, as you would expect when Microsoft designed both hardware and software sides of things.  Users get productivity apps along the lines of a full Office suite, a well-integrated social media sharing system, and more.  If you could possibly want to do it on a tablet, or on a portable computing device in general, Windows 8 is probably somehow equipped for that.

The Kindle Fire, on the other hand, doesn’t even come with full Android functionality.  It is an Amazon device meant for consuming Amazon media services.  You don’t get much in the way of access to third party programs.  Even media coming in from a non-Amazon source isn’t always supported as well as one might like.  I can recall a few occasions when the lack of a decent codec pack was problematic.  If a particular user’s situation demands it then they can certainly install some approximation of office apps and such, but the experience will be less than ideal and there is no way to significantly improve it.

There is a reason that the Kindle Fire is priced so far below things like the iPad and, presumably, the Surface.  You wouldn’t be wrong to guess that part of it is simply an inability to compete at that price point, but you wouldn’t be entirely right either.  Amazon is using the tablet in a different way and not even really trying to compete.

There will always be implicit comparisons.  Not only will they come up with the big names in the tablet market, but the Kindle Fire will forever be lumped in with the Android Market as people try to figure out who is doing well.  In reality, it doesn’t even belong there.  Their device is being sold cheaply, maybe even at cost even now, specifically because it doesn’t matter how much they make on the hardware.

Anybody who uses a Kindle Fire, however briefly, is a win for the company simply because they are then tied into the media network where Amazon is really interested in making their money.  They don’t want to make a tablet that can be everything for everybody, just to add a bit of incentive to choose them for any digital media needs one might have.

Kindle Fire vs iPad 3 Is Easy, But Will Kindle Fire 2 Change Things?

I’ve gone over the fact that choosing a Kindle Fire or iPad isn’t really a tough decision before.  They are completely different devices that offer drastically different capabilities to their users.  A Kindle Fire could no more replace everything an iPad does than it could a traditional Desktop PC, but buying an iPad to do nothing more than what the Kindle Fire is capable of is wasteful at best.  There is some speculation that this will be changing in the fairly near future, however, and we have to wonder how well Amazon can hope to pull off a direct confrontation.

Their strength has been the ability to present a device that does exactly what it sets out to do, does it well, and doesn’t claim to be able to do anything more.  The Kindle eReader can be adapted to type on if a user feels like it, but Amazon never advertises it as a tool for that.  The Kindle Fire was provided with just enough power to handle movie watching and most common apps.  To be able to compete with an iPad on Apple’s terms, Amazon would have to be prepared for just about anything a user would want to do.

Some of these things are easy.  Cameras, which most people are either convinced or at least hopeful that the Kindle Fire 2 will have, would go a long way toward making it a better communications device.  A mic, which obviously would be needed in almost any situation where a camera would be useful, would also allow for voice controls and speech-to-text.  The larger screen would offer users greater real estate for customizing their experience and developers more leeway to add in features or information in ways that couldn’t fit on a smaller device.  To really match the iPad 3 side by side though, they would need more.

It is pretty safe to say that the Kindle Fire 2 will not have a Retina Display.  It will also not have multi-touch capabilities able to handle significantly more than two contact points at a time.  The screen will be larger, which is useful, but the impact of that can’t be assumed to cover everything.  In terms of processing power, graphics capabilities, and any number of other factors, there is little reason to believe that Amazon has a chance at taking the lead in general use situations.

Does this mean that a larger Kindle Fire will flop?  I don’t believe so.  If Amazon can keep the price down, it will still stand out.  Apple’s keeping the iPad 2 available at $400 is ingenious in that it makes the comparison with a 9-10” competitor at $300-350 closer than it would be otherwise, but that doesn’t mean there isn’t room to move in.  Really the only question will be how much they advertise what the new Kindle Fire is meant to do.  If they can make it clear that despite being larger it is still a purely consumption drive design, that will work as an advantage.  If they seem to be actively trying to create and sell a full featured tablet, it will take something big.

Kindle Fire 2: Cameras and More Expected

For a while now the big issue in predicting the ongoing success of the Kindle Fire has been the anticipated iPad 3.  It was going to be a small scale device, roughly comparable in size to the Fire, and be priced closely enough that Amazon would have no choice but to step up in a huge way or give up entirely.  So said the rumors, at least.  Now that we know better, there is still the issue of what to expect in future releases from Amazon.

Clearly their tablet interests are an ongoing sort of thing.  We already have fairly substantial rumors about the second generation of Kindle Fire being planned for this summer.  If we take the original Kindle eReader as any indication, the first offering may have been little more than a probe into the market to see what potential there was for profit.  Despite its popularity, the original Kindle didn’t hold a candle to the Kindle 2 even given the lack of substantial competition in the early days of the line and this has many wondering if the same level of improvement is in store for the Kindle Fire 2.

The most recent semi-reliable rumors seem to center around a 10” Kindle Fire being in the works.  This would be a simultaneous release alongside an update to the 7” version, of course, but it would indicate a serious change of approach by Amazon in drawing direct parallels with the market-leading iPad.  This is not out of character in any way, looking at past ads that highlight both the Kindle eReader’s greater suitability for reading in sunlight and the Kindle Fire’s dramatically lower pricing, but drawing increased attention to direct hardware comparisons is a bold move.

To support this, Amazon will clearly have to have a lot of improvements waiting for us.  What can be expected?  Here are some of my predictions for later this year:

  • Cameras – both front and rear facing cameras suitable for video chat, probably VGA quality.
  • Bluetooth – Kindle accessories are a big deal and this would open the door to everything from keyboards to wireless headsets.  Essential for getting the most out of the tablet as a video player.
  • 16GB+ Onboard Storage – The complaint about local disk space might be slightly over-emphasized for many users, but it’s hard to imagine not occasionally butting up against an 8GB limit.  Cloud storage is great, but 16GB is not too much to ask.
  • Android 4.0 – While this one is hard to say for sure, given potential complications with updating the Kindle Fire’s custom OS fork to take advantage of newer versions of Google’s product, the fact that it was designed with tablets in mind and offers a lot of new features means that an update must at least be in consideration at the moment.

There will not be major changes of philosophy.  Users will not be seeing slots for expandable memory, for example.  There will also obviously be no chance of an open system that connects easily to Google Play.  The new Kindle Fire 2, when it comes out, will be more of what we expect from the first generation in most ways.  It will just take what is already an impressive experience and build on it to do the job better.

Will Newly Revealed iPad 3 Kill Kindle Fire? Is Apple Even Trying?

After months of speculation and rumor about Amazon and Apple going head to head in an all-out Kindle Fire vs iPad 3 (or Mini, or HD) confrontation, we finally have all of the information we’ve been waiting for and it turns out that Apple isn’t addressing their “competition” in any significant way.  This should really surprise nobody given the different user bases being served, but it is worth taking a look at what the new iPad can do and how well it does for the price.

The big distinguishing feature of the iPad is that, unlike the Kindle Fire, it is in many ways a computer alternative.  There is little that you can’t do on one, aside from truly hardware intensive tasks, if you are motivated enough to use the touch screen.  The newest iteration of the hardware line is no exception and does a fair amount to improve the overall experience even further.  New features include the move to a Retina Display like that of the iPhone 4, a new A5X Dual Core Processor, one 5 Megapixel camera situated on the rear of the device, Full 1080p HD video recording, 4G LTE connectivity through both AT&T and Verizon, and dictation capabilities.  A fair list that expands on what the iPad 2 already did well.

What does this mean for the Kindle Fire’s future?  Honestly, practically nothing.  This was not, contrary to rumors, a release that intended to kill the Kindle.  As any side by side comparison has long since proved, the iPad already had a larger screen, cameras, a microphone, cellular connectivity, and more processing power.  If no other factors were considered besides simple hardware performance then Apple wins the iPad vs Kindle Fire matchup every time.  The fact that Apple couldn’t help but be aware of this only serves to illustrate that their widening the gap in hardware performance was directed elsewhere; most likely at heading off Microsoft by increasing momentum before the first Windows 8 Tablets start hitting stores later this year.

The biggest factor is still going to be the price for most consumers.  For all its impressive power, the iPad 3 still runs at least $499 for the cheapest model with no 4G connection.  Even the iPad 2, the cheapest version of which has been kept on at least temporarily at a discount to consumers, is twice the price of the Kindle Fire at $399.  None of the major advantages that the Kindle offers in terms of size, weight, or affordability have been addressed.  While you can’t say that any of those is universally acknowledged as the most important factor in tablet purchasing (the iPad is not suffering a bit by most accounts, nor does anything from Amazon seem to indicate that they were expected to be by now), they are the things that people take into account when deciding on a new device purchase.  For the moment, these remain two completely different types of tablet.  The iPad works as a functional PC alternative while the Kindle Fire is all about the consumption.  The next big chance to change the equation won’t be until the details are announced for the upcoming Kindle Fire 2.

New Kindle Fire 7” & 9” Models Reportedly On The Way

Remember when we were predicting a Kindle Fire launch with multiple tablet sizes to choose from?  Well, better late than never.  Chad Bartley, a Senior Research Analyst over at Pacific Crest, has predicted that we will be seeing a 9” Kindle Fire before the end of 2012, possibly as early as this summer.  Along with this, an update to the already incredibly popular 7” model is expected.  While previous estimates for upcoming Kindle tablet sales had been falling in light of a rumored iPad 3 launch that may include a 7” iPad meant to compete directly with Amazon, the same analyst has upgraded his estimates to account for anticipated demand.

We first heard rumors of an 8.9” Kindle tablet on the way in 2012 via a Digitimes report back in November that indicated a May launch was planned.  While Digitimes is often less than perfectly reliable, they have managed to come up with some good information before on many occasions.  In this case, they also reported that the choice of screen size was meant to simultaneously take advantage of pushes by LG and Samsung to promote the smaller screen size and to avoid competing directly with more established tablets like Apple’s iPad and Samsung’s Galaxy Tab.

What this will mean to Kindle fans is hard to say at this stage.  The immediate concern for owners of the original Kindle Fire will be continuing support.  As many owners of the 1st Generation Kindle can attest, Amazon has a tendency to quickly move forward without worrying about ongoing backward compatibility for their newest efforts.  At the same time, however, there has obviously been an increased awareness of the importance of consistent branding.  While the second generation of Kindle eReader was a fairly noticeable break from the original, subsequent offerings have all remained fairly obviously related.  Add to that the fact that the Kindle Fire is already capable of running more recent versions of Android (as demonstrated by recent videos involving ICS installs) which would be the most obvious thing for the company to change on the software side of things, and there is reason to believe that there will be at least a few years of supported life for the current Kindle Fire.

More interesting will be seeing how they handle the upgrade.  Will the new model or models bow to customer demand for a camera, for example?  There have also been indications for some time that NVidea is interested in getting involved with Amazon’s tablet efforts, which could mean a jump into the Tegra 2 or even Tegra 3 for the larger new Kindle Fire.  Either of these would make sense given the emphasis on video and app use that Amazon has made apparent.

Unlike previous rumors, this one is adding up from a number of different sources and seems to be confirmed by the most recent Kindle ad uploaded to Youtube.  In this, the iPad’s flaws as a reading device are still emphasized in a familiar message, but they also make a dig at the high price tag relative to the $200 Kindle Fire and imply that there is little the iPad can do that the Kindle line can’t accomplish collectively for less money.  To many, this seems to be setting the stage for more direct Kindle vs iPad conflict.

http://www.youtube.com/watch?feature=player_profilepage&v=sulfQHdvyEs

Kindle Fire Now #1 Android Tablet

Android has seized a greater share of the tablet market than ever before in the last year, with fourth quarter usage of Android tablets up to 39% of the total (up from 29% the previous year).  A great deal of this improvement comes as a result of Amazon’s Kindle Fire tablet.  With the whole tablet market seeing huge growth (including Apple’s sales numbers we saw around 150% growth and a total of over 25 million tablets sold) it is no small feat for something as new as the Kindle Fire to already be edging ahead of more established competition.

These numbers deal specifically with device usage as reported by analytics firm Flurry, based on app sessions.  Given the importance of content sales compared to hardware profits, this is probably a significantly better estimate of consumer preference than simple sales or activations.  Thanks to this data, we can tell that the Kindle Fire’s approach to content is making a pretty big difference to the user.

The alternative method of analyzing the success of the Kindle Fire would be along the lines of what Google has been doing when describing Android as building up momentum compared to the competition.  That would be looking at device activations.  While this is not misleading, necessarily, it does focus entirely on numbers that fail to directly equate to post-purchase satisfaction.  Even using this method, the Kindle Fire is doing amazingly.  Approximately 10.5 million android tablets were sold in Q4 2011.  While Amazon is not releasing sales numbers, we can say with a fair degree of certainty that around 5-6 million of those were Kindle Fires.  The numbers are favorable, to say the least.

While there is not any indication that this is having a negative effect on iPad sales, there is also little to support the notion that Amazon had any intention of making a direct attack on Apple with this first tablet.  It is likely, given how much the two companies overlap in their digital media sales markets that there will be some more direct Kindle vs iPad competition down the road, but a 7″ $200 tablet that clearly lacks the potential to replace even the functionality of a netbook is not something you could take seriously if they were heading for a confrontation with the iPad 2 right away.

The biggest impact of all this is probably going to be on Google.  Since Amazon is running such a heavily forked version of Android, and since it lacks easy access to Google’s app marketplace, the success of the Kindle Fire will tend to draw people away from Google services despite technically relying on their original concept.  This has the added effect of drawing developers away from the more general marketplace.

While Amazon’s Appstore has not been a favorite destination for many developers thus far due to the heavy oversight and lengthy screening process for even minor updates, the most important thing will always be going where the customers are.  Right now, for better or worse, it is looking very much like that is the Kindle Fire if you’re talking Android tablets.

Apple Attacks Kindle Publishing With iBooks Author, Drama Ensues

We are well aware now what the big Apple announcement for January was: their new iBooks Author program.  It is a program that allows for easy creation of books, most notably textbooks, for free.  iBooks might have failed to kill the Kindle platform, even given the whole Agency Model collusion with publishers (the legality of which we’ll have to wait and see about), but that doesn’t mean they’re ready to give up.  After some experimentation with the new program I find myself conflicted.  I wanted it to be mediocre, but it’s not.  And therein lies the problem.

You see, there is a bit of a problem with the program’s EULA.  It won’t be a deal breaker for just anybody, but there is definitely important information to be aware of.  By using the iBooks Author program, you are agreeing that not only will anything you sell be available in Apple’s eBook store but also will never never be sold for the Kindle, Nook, or any other non-Apple device.

Before going into the subtleties of the wording, and there are a few arguments with varying degrees of merit that have been made toward the harmlessness of this clause, consider that this can definitely be read as a response to the recent Amazon effort to gain author exclusivity.  The only difference is that Amazon brings in authors with a chance at more money while Apple just quietly restricts their distribution rights with a clause that users not only never explicitly accept, but don’t even see unless they go out of their way.

That said, there are a few situations where I think this will be an extremely valuable thing to have.  If you are planning to create and distribute your work permanently free of charge, I have yet to find a more intuitive, affordable tool for making textbooks or manuals.  If your book was always intended to be marketed primarily to users of the iBooks store, this probably won’t have much of an impact on you.

Now, let’s acknowledge some ambiguities in the wording and clarify some of the many common points of contention:

Restrictions Only Apply To iBook Format:  FALSE

The definition of “Work” used in the EULA clearly indicates that anything generated using the software counts.  It does not matter if you export to PDF, for example.

Apple Is Stealing Author Copyrights:  FALSE

Anything you create is yours from the moment you create it unless you explicitly hand over permission.  What Apple is doing is telling you where you can sell it.  Using iBooks Author allows them to restrict distribution of your work, but otherwise seems to offer them no rights to it.

All This Applies To Is The Formatted Product, Not The Content:  AMBIGUOUS

Leaving aside the textbook for a moment and assuming we are talking about a book that is completely text based.  If you want to release a Kindle version, it would seem possible to just copy the text and reformat.  The wording of the EULA describes “Work” recursively as “any book or other work you generate using this software”.  This can, and hopefully would be, read to mean that only the final, fully formatted output is affected, but the ambiguity is troubling.

It Is Free Software, They Have A Right To Expect A Return:  TRUE-ISH

Nobody is forcing you to use this program.  It is being provided free of charge by Apple and provides far greater functionality than any other free program out there for the same purposes.  Most such restrictions are aimed toward restriction the active use of the software rather than restricting how a creator can manage their own work, though.  Neither illegal nor unprecedented, but odd and somewhat troubling.

Not A Consumer Targeted Software Anyway:  FALSE

This one comes up a lot.  Despite the large number of advertisements being done involving the cooperation of such publishers as Pearson and McGraw Hill in the iBooks Textbook initiative, there has been no indication that they are contributing work under the same agreement.  This is free software pointed at teachers and authors in the advertising (particularly the promo video).  It has bundled templates to simplify the work, a simple drag and drop interface, and tons of automation.  There is depth for those who need it, but definitely not aimed solely at experienced professional textbook publishers.

Apple Can Prevent A Finished Book From Ever Being Sold:  TRUE

All that is required for a book to be covered by these restrictions is that it be a product of iBooks Author.  Publication is neither automated nor guaranteed, and just because Apple turns you down does not mean that you are free to market your work through another platform or sell through your own means.

Apple Offers Better/Worse Royalties Than The Competition Anyway:  FALSE

Apple is effectively offering the same cut of all sales to authors as the vast majority of authors receive when selling for the Kindle and nearly the same (within 5%) as that offered to Nook sellers.

Now, I’m not about to claim that this is the most horrible thing ever done to authors or even that it is deliberately malicious.  Some have claimed that just as this is a 1.0 software, so is the EULA in early versions too and ambiguity will inevitably be removed.  If so, and there was no intent to deceive or control, so be it.  It is already a complicated enough process to get anything out of your eBooks that authors should be aware of what they are getting into, though.  I, for one, wouldn’t want to be locked out of the Kindle platform by accident when that’s where all the readers are.

This is good software.  Possibly great software.  But the limitations aren’t the same as you get when publishing a Kindle Edition, where all you need to worry about is not selling things cheaper elsewhere.  Under the current wording it seems to literally stop you from reaching an audience.  That’s just unpleasant, and something that people need to be aware of when deciding whether or not iBooks Author is for them.

Kindle Success Spurs Apple To New eBook Moves

Recent reports indicate that later this month we can expect to see Apple host a press conference related to, of all things, eBooks.  After news that the Kindle Fire has had a noticeable impact on iPad sales this past quarter, clearly something has to be done.  This is not official as of yet, but multiple sources in positions to be aware of such plans have passed along the same information.  While we have no way as of yet to know for sure where this will lead, the most common rumors seem to point to Apple’s launching of a digital self publishing platform to compete with the Kindle Direct Publishing program.

In reality, such a move on Apple’s part would be quite surprising.  In addition to the fact that simply matching the competition seems to offer far less reward than the effort would be worth given that the iBooks store has failed to really take off so far anyway, Apple is already making about as much on each book sold to owners of their devices as they would be likely to make off a program competitive enough to draw in new authors.  Keeping in mind the fact that anybody publishing through Amazon’s KDP program, or even Barnes & Noble’s slightly less popular PubIt, will already be available to iOS users, the only real motivation for Apple here would be to draw authors into an exclusive arrangement in some way to enhance the iBooks selection.  Amazon has already begun a similar effort tied into their Kindle Owners’ Lending Library, so this would not necessarily be a shocking move, but there is little reason to suspect that Apple is desperate to suddenly push into the eBook market in a major way.

Since we can be fairly certain that whatever the announcement is about will be related to publishing in some way, however, there are a few other possibilities.  Textbook rental is one of the more likely possibilities.  While Amazon’s new Kindle Format 8 provides some more robust formatting options to publishers and the Kindle Fire obviously handles the demands of textbooks more easily than E INK reading devices, so far the Kindle Textbook Rental program has failed to draw much attention.  Given the iPad’s larger screen and Apple’s strong presence on college campuses, it would make sense for them to jump to fill in this gap in the market before anybody else beats them to it.

It is also possible that this has something to do with the ongoing class action lawsuits against Apple and the Big 6 publishers over price fixing and the imposition of the Agency Model around the time the iPad was released.  In the past month the situation has become quite a bit more intense, with the US Justice Department joining in and at least 15 ongoing suits.  It would seem unlikely that the company would want to comment on an ongoing legal battle, but given claims of detailed inside information on the part of certain plaintiffs there is always the chance that preemptive spin on an anticipated settlement attempt might be in order.

The one thing everybody agrees on is that this will not be a hardware announcement.  While there is still speculation with varying degrees of believability about a smaller iPad meant to compete with the Kindle Fire, that will have to wait until later.  For now, it’s hard to know exactly what to expect.