iPad could be big threat to Kindle? So What!

There is an article today on the AP feed titled iPad could be a big threat to Kindle.

So What! Amazon is not going to get kicked out of the publishing party because no-one is buying their Kindle hardware. It’s a small revenue stream compared to the number of eBooks they can sell. They have a reader for iPhone/iPad.

The market has been requesting digital books for some time. People who spend alot of time on the road, for instance, want to read. Carrying around 10 lbs of books in addition to their laptop and other work related items is a rotator cuff injury waiting to happen. So, in the absence of any real device to use to read books, Amazon came out with the reader with what I think was one goal in mind… TO SELL MORE BOOKS!

eBooks are immensely more profitable than paper books. There are practically no shipping costs, and the same payment engines can be used. There are practically no carrying costs. The publisher doesn’t need to have racks of paper books in a warehouse, it simply needs disk storage. Customers have the instant gratification of putting their hands on the book they want to read right now for a reduced cost! Win/Win. Amazon is able to sell more books, and the customer gets to buy books at a reduced cost.

eBook sales are on a tear! Amazon sells 6 eBooks for every 10 physical books. There are currently an estimated 3 million Kindles TOTAL in the field. Analysts estimate between 1 and 5 million iPads will be sold in the initial launch.

Will Kindle users who switch to iPads quit buying books? If users can download the Amazon Reader app and all of their purchases for the Kindle are now available on the iPad for no extra cost, I’d say that Amazon has not forfeited any eBook sales.

Do you think Amazon will pick up a new market channel with the iPad? People who didn’t have a Kindle, but will now buy eBooks? You bet they will!

Seems like a classic razor and blade model. I’m sure Amazon is rejoicing about the new sales channel for “blades” and will be more than happy to give up selling “razors”. Well, maybe not rejoicing in less revenue, but it’s a good problem to have. Hardware has a shelf life and is worthless after a certain point. Books, however, are usually relevant for extended periods of time, if not for all time.

There is also the effect on the publisher’s business models. There is less risk to publishing a book when you don’t have to print several thousand copies before you’ve even sold the first one.