As I discussed in last Saturday’s issue, we’ll be addressing many of the questions you asked and topics you requested in our recent survey over the next few weeks and months. One thing that came up repeatedly was revisiting topics we’ve discussed before and providing updates on past recommendations. So today, I’m going to discuss a topic I’ve written about in the past … e-readers.
I wrote a column a little over a year ago detailing what I thought were the problems with many e-readers and some possible solutions.
Many of the problems that I saw with e-readers a year ago still exist: once you buy an e-reader, you’re locked into that technology and so are the books you’ve purchased; it’s difficult to share books on e-readers; you don’t really “own” the books in a long-term way because you can’t display them on your shelves or pass them along to future generations; and of course, the cost of an e-reader can be substantial, especially if you upgrade when new models come out.
But one major hurdle has been surmounted: You can now check library books out on certain e-readers. It was announced just this week that users of Apple’s (AAPL) iPad and Google’s (GOOG) Android tablets would have the ability to check out e-books from their local libraries.
Sony’s Reader and Barnes & Noble’s Nook have had this ability for a while, but you need a PC and USB cord to download the books, whereas the new service, from OverDrive Inc., allows users to download the books through an application right on the device. Amazon’s (AMZN) Kindle does not yet have this capability.
I read a lot (98 books in the last 23 months!), so constantly buying books is not something I want to do. Instead, I get a lot of books from my local library, which is connected to 40 others, so it has a great selection. And knowing that I could access them on an e-reader would definitely entice me to think about purchasing one.
The library e-books will be free, just like the regular books you check out there. You’ll keep them for between seven and 21 days, about the same as a normal book. And some libraries are even going to allow patrons to set their own due dates.
The major problem I see with this new system though is that there are only a certain number of copies of the books, as the libraries are paying fees to license them, just as they buy the regular books that they lend. So this means that if all the copies of the book you want to read are checked out, you have to wait until it comes available before getting started. This makes sense from the licensing perspective, but it seems backward that there would be limited copies of a piece of digital media.
So while there are now e-books available for free, the system still isn’t perfect. But knowing that I can still use my local library with certain e-readers definitely makes me more inclined to purchase one that is compatible.
When I wrote about again e-readers last fall I discussed Amazon and Apple. Today, I’m going to revisit those recommendations. Both stocks have climbed higher since then, with AMZN moving from 160 to 189 and AAPL going from 307 to 340.
However, the market has recently begun to pull back, which is a normal, healthy reaction to the incredible run-up we’ve seen in the past few months. So while I think both of these stocks have a lot of future upside potential, this may not be the best time to buy.
If I had to pick one stock between these two, I’d pick Apple. Its recent earnings reports have been much stronger than Amazon’s and I think the company has a lot more innovative technology up its sleeve. And Michael Cintolo has been recommending Apple to Cabot Top Ten Weekly subscribers since early June 2010 and continues to feature it in the newsletter, meaning that it’s one of the strongest stocks in the market.
That’s not to say that Amazon won’t succeed. Its recent announcement that it will try to compete with Netflix by offering Amazon Prime members online movie subscriptions will undoubtedly help it going forward.
As I mentioned, the market is due to correct, so you should watch these stocks first before diving in. Or better yet, get Mike’s latest thoughts on AAPL and other leading stocks in Cabot Top Ten Weekly.