In a wide ranging conversation, Sony Reader president Steve Haber said the Sony Readers have sold millions of units; that the redesigned Touch and Pocket edition units have sold out completely and he maintained that Apple changed the rules on them when it rejected the Sony iPad/iPhone app. Haber outlined a growing international demand for Sony Readers, the launch of a library device lending program and emphasized that not only are e-ink devices “not doomed” but “set to replace the traditional book.”
Taking a break from TOC last week, we spoke with Haber at the Sony offices in Manhattan and he was fairly adamant that Sony had been blindsided by Apple’s rejection of the Sony iPhone/iPad app. And in light of Apple’s release of both a new in-app purchase system for subscriptions and a clarification of its app store purchasing guidelines (released after this interview), he may have a point. (Dark Horse Comics, which was also set to launch an iPad app with a purchasing system that would by-pass Apple, has also delayed its release without offering an explanation.)
Released last week, Apple’s new guidelines for in-app purchases make it clear that beginning this year (June 30 seems to be the deadline), apps that offer sales outside the app must also offer the same sale through the in-app purchasing system—in addition to giving Apple its 30% commission. And in a change that is likely to be very contentious, apps cannot offer a link that will take the consumer to a web storefront outside of the app, something that all the major book retailing apps have done. (Amazon and B&N have declined to comment on this).
While this language has always been in Apple’s developer guidelines, it seems that Apple has decided to enforce the rule just as millions of new iPads (not to mention the introduction of the iPad 2) enter the market. Apple spokesperson, Trudy Miller, told ComputerWorld.com that these rules will definitely apply to retailers like Amazon.com. While it appears that it’s okay for a consumer to, say, open a web browser on their iPhone and then go and purchase content from an outside source—a cumbersome process—Apple is clearly banking that the ease and speed of its in-app purchasing system will capture these sales.
Haber said the Sony app was designed “to sell out-of-app, just like everyone else’s app. We’re very disappointed. We spent a lot of time and money developing the app.” Although he declined to outline how they plan to deal with Apple’s new requirements, he said, “We’re going to continue to try and find a way to bring our content to the iPhone but its become a huge technical and business question," referring also to Apple's 30% commission. He was quick to point out that the Sony Reader app for the Android OS has been released.
He said the devices were selling well. Sony’s Daily Edition, the only Sony device offering wireless download, is the only one of the devices currently still in stock. The Pocket and Touch editions have sold out, he said, and Sony is working to get more back into stores. Although Haber would not give precise figures, he said they had sold “millions” of devices and that “there’s not enough product to satisfy demand. Retailers are happy with the sell through but not with our supply.” He said the Daily Edition was selling “extremely well,” but is only available for sale in the U.S. The Pocket and Touch editions are available for sale in 19 countries.
Haber said Sony has upgraded the Sony Reader e-bookstore allowing for sales (it will support multiple currencies) through the website. They’ve also launched a program in 30 public libraries that will put two Sony devices in each library for public use and offer two devices to be loaned out. “We plan to increase the size of this program on a case by case basis,” he said.
He said the growing popularity and fascination with full color multimedia tablet devices—not only the iPad but the big influx of tablets set to hit the market by the summer—was “great for the overall industry. Anything that moves people from paper to digital is a win.” While he admitted that e-ink devices “don’t work for magazines, you’re not going to read Vogue on an e-ink device, but they are great for black and white books.”
He added, “you’ll continue to see devices that are easy on the eyes. Reading on a device with the equivalent of a lightbulb shining behind it is difficult for some people. E-ink devices are not doomed; people will have multiple reading devices.” Indeed he continually used the phrase, “e-ink devices are designed to replace traditional books,” unapologetically. “When the first black and white Sony Reader came out, everyone said, what’s this? The world is in color. But the Sony Reader is not a Swiss Army knife.”
In fact he told PW how the Sony e-ink devices turned him into reader (that and a nudge from his wife, an early fan of the device who told him it was “cool”) after he realized that ease and convenience of digital reading. “Change can make people uncomfortable but when they see the positives of digital reading—it makes people read more—it can be awesome.”