When Steve Did Jeff A Favour

They're called anchors, and Apple is very, very good at making them.

Dan Ariely's book, Predictably Irrational, introduced me to the concept of anchors. It's a very handy one to have floating around (arf).

Basically: an anchor is the item you compare everything else with. For example, Volkswagen has been running a campaign based on the idea that everyone uses the Golf as an anchor to judge hatchbacks in the UK. 

The iPad became an anchor at launch. Immediately, everything in the digital reading market and the tablet market was judged against the Apple product. It's what they do at Apple. They come along and they make something which is so well-judged and so pretty that suddenly everyone else has to try to make a product to outdo it on its own terms and of course they can't. iPhone-killer. iPad-killer. Blah blah.

Interestingly, the question was also asked whether the iPad was a Kindle-killer. To which the answer, it would seem, is a resounding 'no'. (And actually, of course, it was never going to be - because the real battle is not between the two gadgets, which are nicely differentiated by function and price, but between the Kindle Store and the iBook/iTunes store, which are in many ways exactly the same thing with different corporate jumpers on).

Amazon are rising to the iPad challenge all the same, with a sexy new graphite skin, a better screen and battery life, a cheaper option, and so on. Eventually, the iPad and the Kindle may be destined to drift together. I'm told that E-Ink touchscreens capable of displaying colour motion images are not so far off, at which point you're talking some pretty serious technological convergence. 

But all that aside, why do I say Steve has done Jeff a favour?

Well, back to anchors. The thing about them is that people don't necessarily buy the anchor product, it's just the yardstick they use. So anyone looking at the ebook reader market is going to make a mental list. They're going to put the glossy, sexy, lifestyle-ish iPad at the top, but acknowledge that it's the most expensive of the bunch. Immediately below it will go the Kindle, with all that brand recognition, wireless delivery, assorted apps for your other devices so you need never be without your books. And then comes everyone else, in a bewildering array of colours and uncertainties.

Think of it like a restaurant menu. You probably won't order the caviar and kobe beef combo at fifty four pounds, but after you've seen the eyewatering price for that, a mere twenty quid for a tuna steak seems reasonable. Amazon is going to sell a lot of tuna to people who aren't really looking for high-grade surf-and-turf and can't be bothered to wonder whether they want the calamari or the porkbelly. (Before you say 'yeah, but', consider the title of Ariely's book. His point is that a lot of our buying decisions are mad. They're just mad in a very predictable way. And yes, again: I'm grossly simplifying his argument for the sake of... er... simplicity.)

And while you're thinking about that, get your noggin around this little gem:

“Our best estimate is that Kindle books will outsell paperbacks sometime in the next nine to 12 months.” — Jeff Bezos

Ladies and gents, we have ourselves a ballgame.

Comments

I chose the Kindle after deciding against the iPad

rjlib's picture

Interesting post. I chose to buy a Kindle after deciding against the iPad, so I guess I've used the iPad as an anchor in more or less the way you describe*.

I wasn't sure whether I wanted a dedicated ebook reader device. I have been reading ebooks for years (originally on Palm/PalmOne/Treo devices, more recently on my iPhone) because I like being able to fit a big selection of books in my bag. But find the iPhone screen a bit too small to read for long periods and the annoucement of the iPad persuaded me that the iPad would be perfect for me as an ebook reader. I waited for the iPad to come out and had a play with that, but decided it was too heavy and shiny to read books on, especially when compared to the Kindle 2 my sister owns. Then the new Kindle was announced at a much lower price than the iPad and there is a UK Kindle store so no more faffing with dollars and import duty. So now I have a Kindle on pre-order. For me the Kindle does solve a problem (how to have lots of books in my bag at a reasonable price with an easy to read screen on a lightweight device with a long battery life).

* I've read Ariely's book too, so I know what you're referring to.

We shouldn't forget that these two are very different devices..

Jane Tappuni's picture

The kindle is an e reader and the iPad is fully fledged entertainment convergence device - it solves many more problems for the consumer than reading digital content, the single use kindle can only be used for one thing and I wonder that once bought how much is it used? I am not convinced e readers will be around forever as they don't solve a problem for the consumer.  

I do agree though that the iPad is an anchor but not for e readers but for tablet devices.

Price

The new prices for the Kindle in the UK is tempting - if it wasn't for the fact that the Kindle is such a sucky device! Personally, I use my iPod Touch for ebook reading, but I'd like to have an e-ink reader if I could get a decent one cheaply enough that supported EPUB and PDF. For me, then, the Kindle noly ticks one box of the three: price. Both Kindle and iPad enforce vendor lock-in - you're stuck with Amazon or Apple. Of course, the iPad lets you install Stanza, eReader (or even Kindle) instead for access to more books, so big score for that platform.

You're quite right, though, about the way the iPad is viewed. It's selling like hot cakes, we're told, but I'm not convinced it's really competing with the ebook readers. For all the marketing puff, it's actually competing mostly with netbooks when you look at the market shares.

Yes, but...

Nick Harkaway's picture

Sure - they're in different actual categories (for the moment) and the Kindle is probably the anchor if you stick closely to the definition of an e-reader. But that's the point - people don't. As soon as you have to invoke market share numbers and so on to make the distinction, you're out of Predictably Irrational territory. You're basically right about everything, but I don't know how much that matters. It seems to me that the perception is that the iPad is king of this particular hill, and everything else follows. Similarly, while you're right again that Kindle and iPad both lock you in, I'm not sure the majority of buyers care about that. Technologically-minded people do, of course - but both of these devices appeal to a wide demographic which is much softer on tech. In fact, their technological shortcomings are often cited as advantages. So... Interesting times...

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