With the introduction of Barnes & Nobel’s new ebook reader – NOOK – Sony finds itself in a pretty difficult position. In case you haven’t seen it yet, here is a quick overview of what the Nook can do:
Let me start by saying that I own a Sony ebook reader, and have enjoyed using it for many years. While all of Sony’s readers are well designed and engineered, they have been held back by a lackluster (and somewhat expensive) ebook store, and a lack of hunger on Sony’s part to really push the ebook market where it has the potential to go. Their Connect store is poorly thought out, and despite their recent introduction of several new reading devices, they are still lagging behind the current ebook market leader – Amazon.
Amazon’s reading device – the Kindle – offers wireless access to their ebook store, allowing books to be purchased and downloaded directly from the device. It also supports the automatic delivery of subscription based digital content like newspapers and magazines. In addition, it also offers basic web browsing capability with access to knowledge sites like Wikipedia.
Sony has none of these features now, and probably won’t for the rest of this year.
On the other hand, B&N’s Nook has almost all of Kindle’s capabilities, a few unique ones of its own, and dangles the possibility of some interesting software enhancements in the future. The Nook is a dual screen device. It has a large e-ink display on top for reading, and a small touch enabled color display below it for navigation. While it is hard to make usability judgments without living with something for a while, its design seems better thought out and more appealing than the joystick/menu navigation model used by the Kindle. The Nook also has ePub and eReader format support, making it open to connection with other ebook stores as well as public domain titles from Google (as the Sony can as well). The Nook also brings a new concept to the ebook space – lending books to friends. When it comes to the basics, Nook seems to be a good mix of both feature refinement and clever innovation.
What is most exciting about the Nook is that it is based on Google’s Android OS. Barnes & Noble has implied that they may be interested in opening up the platform in some way to third party developers. I really hope they do. This could extend the interface with useful utilities and widgets to access various web based services. This openness could give Nook the potential to become much more that just and ebook reader. And that is exciting. If there are no negative surprises once it starts to ship, the Nook will be a serious threat to Amazon’s Kindle.
As for Sony, they are clearly outgunned at this point. I don’t see a strategy outside of serious price cuts that will allow them compete with Amazon and B&N this holiday season. If they are committed to being in this market long term, Sony will need to invest a lot more next year into improving their entire ebook ecosystem. Time isn’t on their side.
The thing is, I just not sure that Sony is really committed to making that kind of investment in this market.
They have been boxed in at this point and don’t have too many options available to them. It will be difficult for them to find a partner in this space. Both Amazon and B&N are clearly off the table, leaving Borders as the only full catalog bookstore that might have the scale to do something with them (assuming Apple hasn’t already locked them down!). It would also be difficult for Sony to just shutter their store and be successful as a device-only provider. Open ebook standards aren’t widely adopted at this point, and there just aren’t enough independent sellers available. Without an industry wide adoption of common open ebook formats, it will be difficult for any unaligned ebook provider to have a critical mass of titles to build a viable business around.
Apple proved that it can be good for the bottom line to tie a device to a store, and both Amazon and B&N have taken that lesson to heart. And that leaves Sony in an unenviable position: double down or fold and get out.
I hope they find a way to stick it out.