iPad: Apple takes a bite of the e-books market

Adam Leach/Ovum
29 Jan 2010
00:00

OvumApple has finally launched its much-anticipated tablet device, the iPad, and with it Steve Jobs proclaimed that Apple was now a mobile device company. Apple hopes to kick-start the market for e-books with its iPad and iBookstore service, and replicate its success with the iPod and iTunes. However, like the iPhone, the key to the iPad’s success will be the value added by the enthusiastic community of Apple developers.
 
The iPad, which resembles an enlarged iPhone, with a 9.7-inch touch-screen, will be available worldwide from March 2010. Apple has produced a unique device that has multiple use cases, from e-book reading to video watching and gaming.
 
A key aspect of the iPad proposition is Apple’s iBooks application. It allows users to both read e-books on the device and, importantly, to purchase new books and download them directly to the iPad. This puts the iPad in direct competition with other e-book readers, most notably with Amazon’s Kindle.
 
The revenue-generating capacity of the e-book market looks significant, with early estimates for the Kindle 2 last year suggesting that the device had generated over $100 million in revenues in little more than two months after its launch in February. Apple will be aiming higher still with the iPad, which should also deliver a useful uptick to its other content stores.
 
The iPad’s advantage over the similarly-priced Kindle DX is that it provides a host of multimedia functions as well as e-book reading. Although this seems like bad news for Amazon, the iPad will certainly increase the market for e-books.
 
The iPad is based on the iPhone OS, and applications built for the iPhone will run on the iPad, providing users with access to over 140,000 existing applications, giving them content from the start. However, the real value will be delivered once developers start delivering applications optimized for the iPad. Although this will require extra effort for developers and cause fragmentation, some will be motivated by first-mover advantage. However, the larger shift will happen once there is a proven addressable market.
 

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