Kno CEO Osman Rashid To Apple: “Now We Will Fight On Who Has The Better Product”

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Apple’s latest foray into digital textbooks today raises a lot of questions about the future of the textbook publishing industry and digital textbook startups who now find themselves going up against Apple. One of the highest profile digital textbook startups is Kno, which started out with its own oversized tablet but now focusses on delivering textbooks through its iPad app.

On the surface, things don’t look so great for Kno, but CEO Osman Rashid is nonplussed: “We love the fact that so much light has been put on digital textbooks. Now we will fight on who has the better product, more interactive features, and a bigger catalog.”

Let’s start with the catalog. Apple launched with all of eight textbooks today, Kno has more than 100,000. But that is not even a fair comparison because Apple is initially going after a different subset of the textbook market, high school textbooks. Kno only deals with college textbooks. So they don’t compete for the same students—yet.

But what about the price? At $15 each, the price Apple convinced textbook publishers to go with is well under the discounted prices Kno offers most of its digital textbooks. Again, you have to undersand the dynamics of the different textbook markets. “They did not introduce college textbooks for a reason. They are not going to bring out a college textbook for $15,” predicts Osman.

By and large, high school textbooks are bought by school districts, whereas college textbooks are bought by students. A typical high school textbook stays in circulation for 5 years or more, getting passed from one class to the next. Publishers end up making on average $15 to $20 per student over the life of a high school textbook. Apple’s pricing model doesn’t change that. Publishers just won’t get all of that money up front, but must earn it every year.

Until school districts begin to equip students with iPads, Apple’s iBooks textbooks aren’t going to take off. The early adopters most likely will be private schools.

Apple’s ambition is presumably to expand its iBooks to college textbooks. It would be wonderful if Apple could convince publishers to maintain that $15 price point for digital textbooks, but don’t count on it. College textbooks are often more than $100, even digital ones. Expect different pricing to take hold there.

College textbook pricing is also highly regulated. “If they decide to give Apple a special price, they have to give it to us as well,” maintains Osman. So that remains a big question mark.

On features, there is already a race between Apple and Kno to see who can add the best interactive features to textbooks. Kno is slightly ahead with 3D chemistry models, social sharing, and advanced journaling features. Other iPad book publishing platforms like Inkling are also pushing the feature set forward. All of this competition will mean a richer digital reading experience for everyone.

Finally, startups like Kno will try to compete by being more publisher-friendly. Apple released its own authoring tool today for digital publishers, but the fact is that the publishing industry is standardized on Adobe InDesign. Apple’s iBooks Author is not compatible with Adobe’s software. “They are only compatible with Microsoft Word,” notes Osman, “and nobody produces books in Microsoft Word.”