You might argue that Sony was visionary. In the fall of 2006, it introduced the first eBook with an E Ink screen—long before Amazon's Kindle rolled out with the same technology. The Sony Reader also connected users to an online store, solving a problem that had long bedeviled the e-book market—how do you get books onto your new device?
On the other hand, you could say Sony was incompetent. The Reader was buggy—many users faulted its uncomfortable controls and unintuitive software. And its eBook store was threadbare; it had just 10,000 books when it launched. According to AdAge, Sony spent more on marketing the Reader than Amazon has spent on pushing the Kindle, but the company never managed to convince people that they should take a chance on this new way to read books. An eBook reader is a tough sell. It's expensive (the first Reader sold for $350), which means that it will really appeal only to voracious readers, a customer base that is also resistant to change. Amazon understood this perfectly; its masterstroke was to give the Kindle a free, always-on wireless Internet connection, turning an electronic screen into a book-delivery system. Now Amazon could offer something that no printed book could compete with: books on demand, anywhere, for cheap. Though neither company has released detailed sales numbers, it's obvious that the Kindle is cleaning the Reader's clock. The Kindle has become synonymous with eBook readers, overshadowing every competitor—the Kleenex of its industry.
Now Sony is trying again. This week it unveiled the Reader Daily Edition, a new digital reader that includes a wireless connection and touchscreen—something the Kindle lacks. The new Reader will go on sale in December for $399. Sony hasn't let anyone play with the device, so it's hard to say how well it will stack up. But its launch suggests that Sony isn't going to concede the market to Amazon. That's good news: As I've written before, though the Kindle is great, authors, publishers, and readers will suffer if a single company comes to dominate the future of books. It's in everyone's best interest for lots of eBook makers to flourish—that'll keep down prices and keep one company from dictating the terms of eBook sales.
If you're in the market for an eBook device today, you've got some choices. Besides the Kindle and the Reader, there's the Cool-er, the iRex iLiad, and an upcoming reader from Barnes & Noble (which already offers mobile apps that let you read eBooks). The trouble is, we've heard this story before. After the iPod came to dominate the music industry, a host of tech firms tried to take it down. Apple faced what looked to be stiff competition from Dell, Creative, Microsoft, and even Sony. And none of them came close to toppling the iPod. The market for eBook readers is similar to that of music players—both devices replace analog content with digital files, and both industries must negotiate deals with content providers who are leery of the digital age. Anyone looking to beat the Kindle, then, should look to the iPod: Study everything that Apple's rivals did, and do the opposite.
Lesson No. 1: Beat the Kindle on features, not just price. One of the reasons the iPod managed to stay on top for so long was that Apple was constantly innovating. Its rivals would match its features—stylish design, unbeatable interface, ever-better capacity—but by the time they got there, Apple had invented some newer, better, smaller, sleeker iPod, and its old version was now passé. Eventually there seemed to be only one reason to buy a rival device—it was cheaper. But it turned out price wasn't a deciding factor for most people. Customers chose the pricier iPod because it offered a lot more, not to mention because it had become a fashion statement.
The good news for Kindle rivals is that there are lots of ways to improve upon Amazon's device. Sony is on to something with the touchscreen—the Kindle's biggest flaw is its cumbersome directional-pad pointer, which is slow to respond to commands. On the Sony Reader, you can get a dictionary definition just by tapping a word, and go from page to page by swiping the screen—in other words, it follows an interface that people already use on smartphones and other touch devices. When I reviewed the Kindle DX—Amazon's big-screen reader—I lamented that it formatted nonbook content (newspapers and magazine stories) in ways that weren't very useful. Non-Kindle devices could let publishers lay out their content more creatively—for instance, a newspaper could create graphical pages that show off several stories side-by-side. Also, even though the current Kindle is much prettier than the old Kindle, it's not an iPod-like fetish object. Sony or someone else has plenty of room to design a prettier bauble.
Lesson No. 2: The service matters more than the device itself. Every time I dismiss the Zune, Creative Zen, or some other MP3 player as an also-ran, I get letters from loyalists who insist that their gizmo far outshines the iPod. Sometimes they're right—but what they miss is that the iPod isn't a standalone device. It's part of a music-delivery ecosystem, the most important feature of which is iTunes.
It's here that Kindle's rivals will find it hard to compete. Amazon is the Internet's master retailer, and the Kindle's killer feature is its convenience. When you buy a Kindle, it comes pre-loaded with your Amazon account info; you don't even need to enter your credit card number to buy any books. And then there are all those customer reviews and the amazing recommendations—not to mention the huge selection of popular, cheap titles.
How could anyone compete with that? Here's one idea: Pull down the restrictions. The Kindle's biggest problem is its "Hotel California"-content model: You can check out any time you like, but you can never leave. Because Amazon uses its own proprietary eBook format, every book you buy is tied to the Kindle (and other devices Amazon deigns to approve, like iPhones and iPod touches). Sony recently embraced the ePub document format, which—though it's still copy-protected—works on multiple devices. This lets you buy a book for your Reader but be assured that your library won't get deleted if you get some other gadget in the future. The ePub format also lets you hook into other sources for books—for instance, the Reader lets you borrow eBooks from your local library. Google just put 1 million public-domain books online—these will work on all devices that read ePub, which means everything but the Kindle.
I'd counsel Amazon's competitors to embrace openness even more. In particular, they'd be wise to let people trade eBooks. They could do this even while maintaining copy protection—you could authorize your friend to read your copy of The Da Vinci Codefor three weeks, and while he's got it, your copy would be rendered unusable. (I'd prefer if eBooks came with no copy protection—as is the case with most online music—but many in the publishing industry would never go for that.) Kindle's rivals could also get together to create a huge, single ePub bookstore. Publishers would have a big incentive to feed this store with all their books—if they provide books only to Amazon, they'd be helping to create a monopolist in their industry, and that's never good for business.
Will any of this happen? Perhaps I'm dreaming; it's been a long time since Sony's seen a hit gadget, and the new Reader could certainly end up as another failure. But the Kindle hasn't won yet. It's not too late to keep it from swallowing up the book industry.