looks to be stepping up its battle to win book customers
by purchasing Booklamp, a startup trying to deliver
better book recommendations for readers.
BookLamp's best-known product, the Book Genome Project, scans
the writing style of books a customer likes and suggests novels
or authors with a similar feel. It could also break down plot
themes and content, allowing for better search and discovery,
reported. According to a source from the technology news site,
"Apple bought BookLamp to power an ebook search competitor to
Apple is currently in the digital books business with its
iBooks service. But while Apple sells books, Amazon is books.
That said, in an evolving market with hundreds of millions of
Apple devices in peoples' hands and credit cards on file, there
is no reason it can't catch up.
Why would Apple want Booklamp?
Amazon has spent tens -- if not hundreds -- of millions
developing its recommendation engine. Apple has not. Instead of
offering tailored choices based on purchasing history, iBooks
uses top lists like Apple's App Store, as well as featured
selections, author spotlights, and categories. Amazon can tell
you with pretty good accuracy what you might like based on what
you have already bought. Apple simply can't.
BookLamp has at least some of the technology to even the
playing field, which might make iBooks an attractive alternative
for Apple device users who already buy music, video, and apps for
their iPads and iPhones. Apple has to offer Amazon's Kindle apps
on its tablets and phones because devoted readers might buy other
devices if it was not offered. If Apple could match what Amazon
does -- or at least come closer -- it might follow a similar path
to the one it took in dropping
maps app in favor of its own -- though that move did not work out
That might outrage some devoted Amazon fans, but it could push
people to buy books from Apple and give it a chance at a much
bigger piece of the market.
How big is the market?
In the first six months of 2013, Bowker Market Research
reported that e-book sales accounted for 14% of consumer spending
on books. But e-books accounted for 30% of all books sold during
the period. The difference between the growth of e-book unit
sales and the growth of the format's share of spending reflects
the lower prices of digital books, according to
Amazon and Apple are both very cagey about their specific
sales numbers of digital books. But due to a court case, an Apple
executive had to reveal some data in June 2013. While
U.S. vs. Apple
, in which the Department of Justice accused Apple of colluding
with book publishers to set digital prices, Apple's Keith
Moerer said the company had a 20% market share.
At that time,
reported that 20% was higher than most in the publishing industry
would have guessed. "Most estimates had placed Apple's U.S. ebook
market share at around 10%, with Amazon's Kindle at 50% to 60%
Barnes & Noble
's Nook at 25%," the site wrote.
Those numbers are likely different now, as Barnes &
Noble's digital sales have plummeted over the last 12 months. But
if we assume Apple has around 20% of the market and Amazon has
50%-60%, that leaves a lot of ground for the iPad-maker to
Though sales growth for digital books has been slowing,
PricewaterhouseCoopers estimates that trade e-books -- that's
consumer, not educational or academic -- will account for $8.2
billion in sales by 2017. If that is correct, every 10% of
digital market share will be worth around $800 million, so you
can see the logic of Apple trying to up its game.
Apple and Amazon want the same customers
Both Apple and Amazon have managed to create similarly devoted,
trusting customer bases. iPhone and iPad users store their credit
cards with Apple without hesitation for use buying apps, songs,
and, in some cases, books. Amazon has managed to accomplish the
same thing by allowing its users to buy pretty much anything with
a click or two.
While Amazon has 244 million customers with credit cards on
file and tens of millions using its Kindle e-readers, Apple has a
truly stunning base of customers on its devices. The company sold
150.2 million iPhones in 2013 and 125 million in 2012. It also
sold 71.1 million iPads in 2013 and 58.31 million in 2012. That
gives the company a large potential audience for iBooks.
The biggest thing that kept Apple from gaining ground on
Amazon in book sales is its inferior shopping experience. If the
company can integrate the BookLamp technology to offer
recommendations that are equal to or better than Amazon's, it
should be able to win over customers. If iBooks gets better, it
seems possible Apple could stop making Kindle available in the
App Store. That would likely anger some Amazon customers who
would be separated from their library of already-purchased books,
causing them to leave for Kindles or Android devices.
That number would likely be insignificant, however. Most
people would be able to move to iBooks easily enough, especially
because it would not require a registration, since Apple already
has credit card information on file for hundreds of millions of
people. If Apple can build a decent digital bookstore, it should
be able to take customers from its rival.
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