Why the iPhone Kindle app does not cannibalize Kindle

I thought the next gadget I’d get after buying an iPhone was the Kindle. Then I discovered the Kindle app on iPhone and gave it a try. I’ve read three books on the iPhone so far, and am quite satisfied with its performance. If you have to read for hours together, then it’s not a very good option, but I haven’t been doing that kind of reading lately, so it’s not a problem for me.

In fact, I have decided that I won’t be buying the Kindle now. The iPhone serves as a satisfactory book reader and since I have access to all books that are on Kindle – I don’t think I will gain anything from getting the Kindle.

I guess there must be a few others who decided that they don’t need Kindle if they have an iPhone. So, I was wondering whether the app cannibalized Kindle sales or not.

I know my reasons for not buying a Kindle, and was interested to know Amazon’s reasons for not worrying about the app cannibalizing Kindle sales.

Here is what I found:

iPhone app may induce Kindle sales: For one, there must be several people who decide to buy Kindle after they use the iPhone Kindle app. A lot of people are apprehensive about using Kindle, and if they get to try a free app first — that might just nudge them into buying Kindle.

The app doesn’t have all the features that Kindle has, and most comparisons state that the Kindle is much better than the app. So using the app may nudge some people into buying Kindle.

Great potential for e-book sales: There are about 10 – 15 million iPhones and iPod Touches, but fewer than a million Kindles, so the potential boost that e-book sales can get from this app is pretty significant.

Competition: Other e-book readers like Indigo Books and Music Inc’s Shortcovers – are already on the iPhone. So, people who are looking to read on the iPhone do have other options. Amazon could lose out sales to their competitors, if they didn’t come up with this app.

Kindle didn’t cannibalize paper books: This is by far the most interesting thing I read about Kindle. In January this year, Amazon’s CEO, Mr. Bezos said that Kindle hadn’t cannibalized its paper book business. He said that Kindle owners continue to buy the same number of paper books they did before owning a Kindle. They incrementally buy about 1.6 – 1.7 e-books for every physical book they buy.

This is a real indirect inference, but if Kindle didn’t cannibalize paper books, then the app may also not cannibalize Kindle, as that’s not a perfect substitute of Kindle.

Amazon was certainly not concerned when it released the app, and an Amazon Vice President Mr. Freed told the WSJ that he doesn’t expect iPhone readers to read more than 20 or 30 minutes on the iPhone and they were “not at all” concerned about cannibalization.

Reading all these reasons made me think that it’s much better for Kindle to be on the iPhone, Blackberry and Droid to boost e-book sales rather than stay away from there in the fear of cannibalizing their Kindle sales. Who knows – I might still change my mind and buy the Kindle after all.

3 thoughts on “Why the iPhone Kindle app does not cannibalize Kindle”

  1. I tried the Kindle app on the iPod Touch right after I bought my Touch and I am very happy with it. I tried a few free books first to see if I liked it, and I think it’s a great way to read a book if you desire portability. So far I have only read short stories and used it for reference, so I have avoided eye strain by reading on a small screen. I’m not so sure it would be a good option for long books or those with pictures. But for quick reading it’s not bad.

    As for affecting Kindle sales, I am actually more likely to buy a Kindle now than I was before. This gave me the opportunity to try it for free since I already had the equipment. I wasn’t likely to go out and buy a Kindle without having been exposed to reading ebooks.

  2. I absolutely agree with this article. Kindle had the price going against it. Many
    reviewers declared the price would make it a non seller.
    However with Kindle on Iphone, they would be silenced.
    Its for free and provides the same features as on the original device. Even if it may not be helping the kindle hardware sell in a big way, its surely going to move a lot of e-books from the kindle store.
    I found the below article very helpful
    Maybe you can also go through it.

  3. Hmm this is an interesting article….the new Kindle version just got released this week….allows for US and Int’l wireless facility but no other upgrade. Its priced lower @ 279 bucks as compared to earlier. The only reason I can think of in buying this new version would be in case you are stranded at an Int’l airport at some place where you have this Kindle wireless connection. So you can still download books off the Internet without cribbing about the fact that your iPhone won’t work in another country. 🙂

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