Did the Kindle Start a Trend Toward Paperless Living?

A recent survey put out by Gartner looked at portable device usage among five hundred or so participants to see how things like tablet computing were changing the way we live.  One of the more notable results that they came up with was an indication that over 50% of those involved said that they prefer reading on a screen to reading on paper.  This includes newspapers, magazines, and books.

They didn’t specify whether or not the participants logged any of this data based on using a Kindle or other dedicated eReading device, but that matters surprisingly little in this case.  The reading experience on portable devices is becoming comparable to, and sometimes superior to, that of reading on paper.  Who would have thought?

It would be somewhat foolish to claim that this was the result of the Kindle’s impact of consumer impressions.  We’ve been heading toward digital text distribution since the first computers were capable of storing enough text to be useful.  It was only a matter of time for it to reach the reading public.  It was what the Kindle signaled that accelerated the transition.

Sony already had a better eReader on the market when Amazon released the first Kindle.  What they didn’t have was the Kindle Store.  Amazon made it easy for their customers to buy popular books.  They even went the extra mile and made sure that purchasing could be accomplished right from the device itself.  With no more need to find USB cables or memory cards, eReading was finally more convenient than picking up a book from the store.  It was sometimes even easier that picking up a book off the shelf.

Over time, adding devices as they went, Amazon brought their selection to practically any device with a screen.  The Kindle itself was and is still important for many people, but just about anybody who is interested will always have a device within arm’s reach that can load a book for them now.  Convenience has reached an extreme.

Convenience is what the Gartner survey attributes the move away from paper to.  Their participants indicated that they were willing to pick up whichever device lay closest to hand for practically any reading situation, even to the point of excluding print at times.  Since all participants were required to have a media tablet and at least two other similar devices, being out of touch would have been a stretch.

None of this says that the printed book is really going to disappear.  We know that won’t happen any time soon, despite the fact that the death of print has been declared regularly since at least 1984 (extra points for catching the obvious movie reference).  What this means is that print is likely to lose its primary position in the reading world, even for magazine and newspaper readers, before too much time is up.  Tablets used to be toys, now they are becoming household tools.  Prices are dropping, exposure to options like the $79 Kindle is up, and it seems like every day readers get more to choose from.  Publishers can’t even entertain the notion of maintaining their old model unaffected at this point.

Amazon Kindle Fire Profits May Exceed Initial Estimations

It comes as no real surprise that Amazon’s bestselling Kindle Fire tablet is going to make the company some money despite estimates that say the hardware is being sold at, or even slightly below, the cost of manufacturing.  They basically brought eReading to the mainstream at a time when people barely understood what the idea meant, after which I tend to give them the benefit of the doubt when it comes to identifying profitable ways to create content sales.  What has come as a surprise to many is exactly how much average profit the company many stand to make on each unit.

Ross Sandler, an analyst from RBC Capital, has managed to estimate that your average Kindle Fire will be the source of around $136 of income for the company during its lifetime.  Naturally this is speculative to a certain extent, but it was based on an independently conducted survey of over 200 Kindle Fire owners regarding their spending habits thus far.  The findings are actually somewhat surprising to me and I have to wonder if they don’t reflect a certain amount of skewing due to early adopters with narrow expectations of the tablet’s potential.

Personally, despite having had the Kindle Fire since the day it came out, I can’t imagine sitting through so much as a single book on it.  It works for the occasional article or academic publication when needed, and I couldn’t be much happier with the PDF functionality for my own purposes, but owning E INK eReaders has left me with higher expectations.  It was therefore interesting to find that the most popular use for the Kindle Fire among those surveys was eBook reading by a wide margin (71% citing this as among their most frequent uses.

Also interesting is the fact that video streaming, which has seemed to be Amazon’s primary focus with the Fire so far, is relatively unpopular with only 13% of those surveyed reporting it as a frequently used feature.  That seems to include all video streaming, including things like Hulu Plus and Netflix, which works against Amazon even further given their efforts to built the Instant Video service into something impressive.

So where is all of this money that the Kindle Fire will supposedly earn coming from?  It looks like the current numbers support an estimation of around 5 eBooks per quarter, 3 apps per quarter, and a noticeable but unaccounted for increase in the number of general Amazon purchases each quarter.  My inclination would be to say that this is an overestimation of eBook purchasing and an underestimation of app appeal that will turn around once people get more comfortable with the capabilities of the tablet, but that is admittedly a matter of personal observation with no backing in numerical research.

The problem with any survey of this sort is that it the recent surge in Kindle Fire owner numbers has led to potential inaccuracies.  This is especially the case since all those surveyed came to own the Fire during 4th quarter 2011, nearly half of them as gift recipients.  It is hard to know for sure if things will change once the primary pool of new owners is made up of people buying for themselves.  Even so, chances are good that the numbers will level out somewhere along these lines.  Amazon clearly made a smart move here, and the Kindle Fire is going to pay off big in the long run.

Kindle Fire Demand Exceeds That Of First iPad

Can the Kindle Fire really manage to compete with, or even beat out, Apple’s iPad?  Opinions are divided, naturally, but it is definitely a strong step in the right direction.  What’s going to be most important in the near future is how customers perceive the new Kindle.  Is it just another eReader with color, like the Nook offerings?  Is it the poor man’s iPad?  Would Amazon have been better off making just another generic Android tablet rather than keeping tight control over their ecosystem?  Both individual needs and individual experience will play a large part in answering these questions for customers.  You don’t necessarily get what you expect or what you’re hoping for, but those are important in informing purchasing decisions.

Since the iPad effectively built the Tablet PC market around itself, that’s going to be the best spot for comparisons.  ChangeWave Research, a company specializing in identifying consumer and business demand trends, recently did a survey of 2,600 consumers regarding their interest in the Kindle Fire.  The results were interesting.

Of those surveyed, 5% said they had already ordered a Kindle Fire.  Another 12% indicated they were fairly likely to make the purchase.  Compare that to a similar study of the iPad’s initial launch back in 2010, wherein only 4% considered themselves likely to buy and another 9% said they were somewhat likely.  Of those who said that they have already ordered their Kindle Fire, 26% said that they are likely to put off an intended iPad purchase as a result.

Do these numbers mean that the Kindle Fire is doing better than the first iPad was?  Only in the most superficially literal sense.  Keep in mind that Amazon’s new device is less than half the price of Apple’s.  That makes a difference in how many people will even have the opportunity to make the purchase, if nothing else.

What is really telling is the number of people who are likely to put off their iPad purchase thanks to the Kindle Fire.  That is only 26% of people who are already getting the 7″ tablet.  This would indicate that the clear majority are interested in owning both products.  While you can’t say that they are not in competition, it can be assumed from this that the two tablets meet different customer needs (or at least are perceived to do so) at this time.

The iPad currently holds more than two thirds of the tablet market at the moment.  Depending on your source, significantly more than two thirds.  It is going to be hard to budge no matter who takes it on, regardless of the company backing the hardware.  With the Kindle Fire, Amazon has seemingly done a fair job of approaching it non-confrontationally.

This is not just a cheaper iPad or a smaller iPad.  It certainly isn’t a superior version of the iPad.  The comparisons will remain inevitable because so much of tablet computing is based on what Apple started, but perhaps it is possible for there to be a more nuanced appreciation for the two different pieces of hardware.

eReader Growth Outpaces Tablets as Kindles Catch On

A recent survey by Pew Research Center shows growth in both eReader and Tablet PC markets.  The ownership base for Kindle and Nook owners has doubled in the 6 months from November 2010 to May 2011, ending up at an impressive 12% of those polled.  Tablet ownership, over the same period, has seen a 3% jump.  The breakdown is about what one might expect in a lot of ways.  While it might just be a matter of curiosity for most at the moment, studies like this will be what determines the immediate future of these devices. The study takes into account 2,277 adults aged 18 and up.

Owners of eReaders like the Kindle are fairly evenly broken across the genders.  Parents are more likely to have picked up an eReader in the last six months than people without kids under 18.  The greatest growth among surveyed ethnic groups was in Hispanics, who jumped from 5% ownership to 15%.  The only group that seems to have dropped off in terms of eReader ownership was High School non-graduates, who went from 5% to 3%.  College graduates predictably jumped the most.

Tablet ownership grew along similar lines, though not necessarily the same ones.  Men, for example, are significantly more likely to own a tablet than women, with a large number of those surveyed saying that being able to impress others with their purchase was a priority.  This might have played into age demographic differences as well, since tablets showed the most growth in the 18-29 bracket.  eReaders, by comparison, did best with those 30-49. In the case of tablets, ownership among college graduates was actually outpaced by that of those with partial college completion.  Hispanics still lead the pack among reported ethnic groups.

Basically, everybody likes their new gadgets.  Men, especially younger men, are fond of the flashiness of the tablets.  Slightly older people of both genders are getting into the eReader market.  Overall, tablets are still lagging a bit behind, in spite of early predictions that they would spell the end of the eReader.  Possibly this has to do with the lack of serious competition among tablet makers, in which case we’ll likely be seeing some different numbers this time next year.  More likely would be that this is an indication of a trend toward dual-ownership.  A good 3% of those surveyed confirm that they have both types of device on hand.

For now, there are already groups where as many as 20% of those surveyed have adopted eReaders.  There has been noticeable growth in all households with an income greater than $30,000 per year.  Households over $75,000 per year are of course doing the most shopping for portable electronics, but the difference in growth between this and other income brackets is not as pronounced as it is among tablet owners.  They seem to be cheap enough to be accessible to, and appealing to, pretty much everybody.  Pricing the Kindle at just $114 might be the smartest move Amazon could have made.  It will likely surprise nobody if the upcoming Kindle Tablet undercuts the competing iPad by more than a little bit to take advantage of the trends.

Kindle vs iPad Demand Survey

A recently released ChangeWave survey tracking consumer data in the eReading marketplace came up with some interesting results for Kindle enthusiasts this time around.  While there was a lot of data, mostly demonstrating the justifiably increasing popularity of the iPad, there are a few specific pieces that are particularly interesting for those of us interested in the future of the dedicated eReader market.

Defining the eReader:

In looking at this topic, one of the things that it seems important to keep in mind, at least to me, is that the Kindle is essentially an eBook-specific reading device.  Yes, it is nice to have the option to grab your newspaper or news feed on it, and I do these myself, but that’s not where the device shines, nor where it is really meant to stand out.  If, for the sake of these surveys, we’re going to consider everybody who looks at a blog, a magazine, or a newspaper to have been using their device as an eReader, then that includes a lot of things that are peripheral to everything besides the iPad.  Before anybody jumps down my throat on this one, I’m not claiming that there are no people who want an eReader to read their magazines on or that that’s an unimportant market, merely one that only one of the devices was ever really intended to take into account in the first place.  When it comes to specifically eBooks, the current user base numbers reflect a different balance.

Future eReader Demand:

This is perhaps the most immediately relevant bit of information to look at, for a lot of people.  While we don’t have much to go on in terms of rationale behind these purchase decisions, it is very nice to see dedicated eReaders as a whole, and the Kindle in particular, holding a strong position here. Even with the iPad having the more diverse functionality, showing 42% for the iPad against 38% for dedicated eReaders(Kindle, Nook, and Sony) with as many as 18% of respondents undecided tells me the numbers are staying pretty close.

Current eReader Ownership:

This was the most interesting of the data sets to me, when it comes right down to it.  In a survey of over 2800 respondents, iPad ownership doubled in just four months, while Kindle ownership dropped by 15%. This doesn’t mean that 15% of Kindle owners dropped their eReaders off at the dump or switched to the iPad, obviously, simply that a more significant number of people owned iPads or both iPad and Kindle devices.  Not having a copy of the report on my desk at the moment, I can’t say anything certain about methods, but it would seem likely that you hit your participant numbers faster now that the iPad has really taken off, so Kindle numbers will appear to fall as a result.

Conclusions:

Does all this mean that the Kindle is on its way out?  Nah.  The market is growing and tablet PCs are going to take their share.  If all you want to do is read magazines and surf the web anyway, it certainly makes more sense to have one of those right now than it does an eReader.  For those of us who want to sit for hours with a good book in front of us, preferences are still pretty clearly elsewhere.