counternotions

In the current Newsweek cover story “The Future of Reading” Steven Levy describes Amazon’s new eBook reader Kindle. In development since 2004, the stats on Kindle are impressive:

$399; 10.3 ounces, paperback size and shape; 6-inch high-res 167 ppi screen from E-Ink; 200 book, extensible storage capacity; 30 hour battery, with 2-hour recharge; wireless connectivity via Sprint EVDO; 88,000 books for sale, most new books at $9.99; prominent newspapers, magazines subscriptions; Wikipedia, Google searches; always-on, PC tethering not necessary.

But we’ve heard so many eBook promises for so long that it’s hard to take them seriously: Franklin eBookMan, Rocket eBook, Sony Librié, iRex iLiad, to cite some of the better known ones. The latest (and the first major implementor of the E-Ink screen technology also used by Kindle) is the $299 Sony Reader. None of these devices have caught the attention of readers in any meaningful way. Why should Kindle be any different then?

Potential

Because it’s from Amazon, the most prominent retailer on the web. Amazon CEO Jeff Bezos is careful not to position Kindle as yet another digital gadget: “This isn’t a device, it’s a service.”

Levy speculates on the potential for reading devices like Kindle that are always-on to aid the discovery process by links to other eBooks and reader communities, automatic subscriptions, community annotations, cross-book searches, recommendations, hyper-targeted advertising, even serialized books where the text is never quite finished as it’s constantly updated by the author or the community. These can all play to Amazon’s strengths, unlike earlier attempts that have not been successful in cultivating services for connected devices.

The price of Kindle may be too high (Bezos points to the iPod that was priced also at $399 at its introduction). Kindle’s design may be clunky, DRM too restrictive, screen not as large or colorful, storage capacity not enough, store not as extensive, and so on. But in Amazon, Kindle has a parent that is determined to take a loss to expand the market and the reach of the device.

“The iPod of reading”?

Levy says “Though Bezos is reluctant to make the comparison, Amazon believes it has created the iPod of reading.” While “the iPod of …” has become a cliché to describe any product with a semblance of distilled design sensibilities emanating from Cupertino, there is one fundamental strategic reason why Kindle won’t be like the iPod.

As Steve Jobs often repeats, the vast majority of music on existing iPods are not purchased from the iTunes Store. The music labels claim they are pirated, Apple and others say they are mostly ripped from existing CD collections or otherwise acquired online or from friends. Either way, iPod users have had an easy way to populate their devices, without having to repurchase most of what they have already paid for or illegally downloaded.

Kindle users, however, will have to purchase or repurchase all the content on their reader. Whereas it was possible to pay $399 for an iPod and enjoy all the music you wanted legally or illegally without any additional expense, not so with Kindle. Amazon is banking on the proposition that readers will indeed pay more for the convenience and additional social aspects of the digital device, just as they have for iPod/iTunes.

Kindle or iPhone?

Bezos’ comparison aside, I think Kindle is far more comparable to the iPhone than the iPod. The iPhone is roughly half the weight (4.8 ounces) of Kindle, its screen (3.5 inches) is about 40% smaller and its resolution (160 ppi) is almost the same. The two devices seem to share a lot of capabilities. In fact, Levy drops a either a juicy hint or a common wish-lits item regarding the iPhone’s potential as an eBook reader itself:

I’ve been reading Boswell’s “Life of Johnson” on my iPhone, a device that is expected to be a major outlet for e-books in the coming months.

This invites us to further speculate. A device like Kindle embodies many Apple strengths: small form factor, connectivity, easy interface, service back-end, media integration, systems design, transactional fees, untapped market, existing patents, etc.

While its screen is smaller, the iPhone’s connectivity, storage, integration with the web via Safari, multimedia capabilities, etc., are equal or better than Kindle’s, at a much better price considering all the other features it supports. So why hasn’t Apple brought in the publishing industry to the iPhone? Yes there have been a few announcements like the Texterity portal, but by and large, prominent brands and especially book publishers are absent on Apple’s device. Does Apple believe that long-text reading is not suitable for mobile devices and thus not a viable business? Or is it possible that they are already in touch with publishers for iPhone partnerships? Or will the iPhone get bigger and transform into the fabled “iTablet” device everybody’s been waiting for?

In digital music, despite Apple’s seemingly insurmountable lead, Amazon has shown its willingness to compete with Apple head on. With no apparent current interest in the market, could Apple be ceding the eBooks front to Amazon? If Apple were to compete, would it be wiser to build its eBook business on the iPhone or a new, larger and perhaps a more dedicated device?

In Microsoft Changes Its Marketing Tune for Lackluster Zune, AdvertisingAge outlines the changes in the company’s new Zune 2 promotional strategy:

…Zune is dropping its original strategy, which painted the iPod as an isolating device and Zune as more social because its tunes can be shared among users. Now the campaign is centered on the individual and tagged “You make it you.” The iPod “has become a superficial status symbol,” said Mike Harris, partner-strategy for [Microsoft ad agency] T.A.G. Zune is more personal, he said.

When Microsoft launched Zune last year, it wanted to establish the brand and emphasize its unique wireless sharing ability to create a “stark contrast” to the iPod. Peter Kingsley, group manager for Zune brand marketing, explained the approach to CNET:

A key principle to our advertising creative is authenticity, in that the Zune brand is about celebrating great artists and the real people that enjoy it.

Hmm. After its first year, Zune gained less than 11% market share in the $250+ players-with-hard-disks category (cf. Apple’s 86%+ share) and 2.2% overall share among all MP3 players. For a company that spends $1 billion in advertising, its paltry $9 million ad budget in 2006 underscores Zune’s lowly status in Microsoft’s strategic focus hierarchy.

So what does Microsoft do for Zune 2? Double the ad budget ($17 million for the next six months), change the ad agency (McCann-Erickson’s new T.A.G. unit in San Francisco) and drop the “Welcome to the Social” strategy.

With the iPod having a near-invincible lead, Zune 1 took the alternative, anti-entablishmentarian approach by featuring quirky arts and sharing themed campaigns, which I declared a dud in an earlier article, Consumer markets: Time for Microsoft to exit?

Now the new youth-oriented agency, is planning a more aggressive TV-heavy approach. As can be seen at ZuneJourney.net, there’s a Beatlesque, happy-to-be-alive, psychedelic streak to the campaign:

The first Zune 2 TV ad is Ballad of Tina Pink, featuring “Lake Michigan” by Rogue Wave (1:05 min video):

Is this going to work?

Let’s recall that Microsoft first ignored the iPod, then attacked it for being closed and touted its own ‘many options’ approach with its hardware partners. Christine Andrews, lead product manager of MSN, at the introduction of Microsoft’s music service in 2004:

We’re different because Apple is a closed system. If you want Apple, you have to use the iPod. A lot of people want choice and we offer that.

When that didn’t work, it complained about its partners not delivering compelling hardware, abandoned its PlaysForSure platform and got into the hardware business to compete directly against its erstwhile partners. Now that Zune 1 has flopped, Microsoft is playing its ultimate card: ‘we’ll get there by version 3.’ Chris Stephenson, GM of global marketing, Microsoft Entertainment:

We are very much aware of the strength of our competition, but once our company gets into something, it will not give up…It’s good being in the No. 2 place — we can fight the good fight.

As I argued earlier, Zune has no compelling advantage over the iPod, other than being not-the-iPod. With the possible exception of Sony (that apparently cannot write software if its life depended on it), there’s really no other company better positioned to challenge Apple’s digital music hegemony than Microsoft. But is Microsoft being delusional here or is Zune 2 just a bridge to Zune 3 that’ll crush the iPod?

At the company’s financial analysts meeting this summer, Robbie Bach, president of the Entertainment and Devices Division at Microsoft, outlined Microsoft’s ‘version 3′ strategy:

We think of this in the hundreds of millions of dollars of investment…It is something that is going to take time. This is not a six-month initiative.

At this rate of ad spending alone this should be a five-year initiative. Does Microsoft have that much time? And what of the brand strategy that’ll run that initiative? Robbie Bach:

We have to drive a new brand: Zune…We have to drive people who think about iPod as the brand to think about other things.

Is that clear?

You might also be interested in this article:
Consumer markets: Time for Microsoft to exit?

Creando conciencia en las calles

Outstanding blending of digital and hand-drawn typography for a thoughtful second-take effect. (More at the site.)

» Via NFG.

Oversized screw as a table by FinnishDesignShop

For when you need to send a signal to your advertising agency or application development shop; nice furniture for close-quarters negotiations.

» Via Sensory Impact.

Walking on exhibit walls

While designing the space for the 2007 collection of 100% Products, Nendo decided to lock the entire exhibit – furniture and all on to the wall surface. The spatial hack was intended to create attention by allowing the viewer to see the exhibit from a floor above. In addition, any visitor the booth would end being part of the exhibit by appearing to be walking on the wall of the room.

» Via Sensory Impact.

Who’s zooming whom?

Say you want to do outdoor advertising touting the 12X optical zoom capability of Leica cameras. You could do a lot worse than these very clever boards:

» Via 2WENTY 4HOUR.

Panasonic follows suit, or is it the other way around?

» Via The Online Photographer.

Schooling you

Just how brilliant is that!

» Via tantramar.

Weather.com Formatted for Windows Mobile vs. iPhone

Are we still arguing the iPhone won’t have much impact on mobile content design?

» Via o’reillynet.

‘Nuff said. :-)

Via CardCow.com.