BII Express: Apple Fires A Sidewinder Into Amazon And Disrupts The Huge Textbook Market Good morning! Biggest news this morning: Apple is going to announce tools and a platform to create and distribute e-books on iPads, according to a report by Ars Technica. The biggest new thing is that Apple is going to announce a "GarageBand for eBooks", or a tool that makes it drop-dead easy to create gorgeous, interactive ebooks. We also know from Steve Jobs' biography that he had a plan to disrupt the textbook industry by offering digital textbooks on the iPad, perhaps by directly hiring textbook authors to make textbooks for the iPad. - On the textbook front, we believe this is going to be all about the content. Everyone agrees it's ridiculous that in 2012 students should have to lug around huge, expensive textbooks made from dead trees. But the problem is that universities and university professors aren't exactly early adopters of new technologies and they, not consumers, decide the textbooks students buy. And textbook publishers want to protect their existing business and margins. If Apple can get the content, either by partnering with the textbook publishers, or going around them by hiring the textbook authors, it will win. If it can't it won't.
- More broadly, this is a frontal attack on Amazon's Kindle ecosystem. Though the digital textbook market is important, it's missing the forest for the trees to think that this is what this is about. The Kindle ecosystem is the thing that makes Amazon Apple's only worthy tablet competitor; and that ecosystem, in turn, works because it has such a commanding lead in e-books (it also has video and music, but these offerings are ho-hum). Apple already tried to kill the Kindle with its iBookstore, but that pretty much failed. By coming out with a "GarageBand for ebooks" and a distribution platform, Apple hopes to sidestep Amazon as a publishing platform for books. We think this will fail, too. There are a few reasons for that: Amazon has built many barriers to entry, such as its own publishing imprint and relationships with authors and publishers; but more importantly, from a product perspective, Apple does not understand books. Interactive ebooks are great, especially for things like textbooks. But most books, and the books people love, are strings of words, not a colorful interactive experience. Which is why a Kindle is better than an iPad for reading books, and why people love them even though they are "inferior" to Apple's gorgeous tablets. Apple's iBooks are pretty with gorgeous fonts, but that's not what readers and writers care about. Readers and writers care about great prose. Amazon understands this, and as a result it has made Kindle the best platform for reading and distributing books. A "GarageBand for ebooks", while a great idea, and certainly one Amazon should imitate, will not affect the Kindle ecosystem, in our view.
For more on the Kindle ecosystem, read our primer on Kindle economics → In other news... DON'T MISS: Our Primer On Pinterest, The Fastest-Growing Social Site Today → Apple sues Samsung in Germany, alleging it's copying its designs, asking for 5 models to be banned. Another front in the multi-front, multi-year lawsuit battle between the smartphone giants. Samsung is selling a $1 billion bond to expand its semiconductor manufacturing capacity. Samsung has been one of the big winners of the Android ecosystem. The ecosystem seems to work for manufacturers and carriers as well as Google, which is a big reason it's so successful. Apple will shortly announce tools and a platform to make and distribute e-books, according to a report. This is taking aim at the textbook market and, more broadly, the online publishing market and Amazon. Symantec buys cloud-based archiving company LiveOffice for $115 million. Enterprise data software company Splunk has filed to go public. While not as sexy as their consumer counterparts, we predicted this would be a year of big public offerings and financings for enterprise startups→ The introduction of Kindle Fire accelerated booming tablet sales, according to a new report from eMarketer. Some 54.8 million Americans are expected to own a tablet by the end up 2012, up from 33.7 million last year. The unsung winners: digital content providers that form the backbone of the tablet ecosystem. Please follow BI Intelligence on Twitter. | 
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