AAPL - Apple Inc.

[innerscorecard]

Apple, Samsung and Xiaomi and then everyone else. That's not what market share indicates, of course. But no one except "feeds and speeds" driven nerds actually care about other brands.

 

Of course, other brands will continue to be bought. Most people just buy the cheapest functional thing.

 

My first smartphone was a Huawei. It got the job done (sort of) and showed me how nice it was to have a smartphone, but I gave it away to a relative (also her first smartphone) as soon as I got my iPhone.

 

[txlaw]

Cars are commoditized? What planet do you live on? Some segments are more commoditized than others, but at the higher-end a very large number of people care very much about the difference between an Audi and a BMW and a Porsche and a Jaguar and a Tesla, etc. Do I have to bring up the Nike example again? If there's something that should be commoditized, it's shoes, right?

 

As for the margins, of course the economics of the car industry are different from the consumer electronics and software industry. I don't think it's too relevant what margins they get.

 

The only thing I can say to this is that you seem to continue to misunderstand what I mean by "commoditization."  It doesn't mean that there is no "high end" or that there is no differentiation in the market.  Almost all product/service categories are subject to "commoditization," and there is a spectrum for product markets, with the opposite ends being "pure commodity" and "completely unique" products.

 

You are essentially taking "commoditization" to mean an end-state product market similar to natural resource commodities (e.g., petroleum or iron ore).  That is probably my fault for using TVs and toasters as examples of consumer product commoditization, which are closer to the "pure commodities" end of the spectrum.  But the reason I used those examples is because you insist, for some reason, that "consumer products" are not subject to the "good enough" phenomenon.

 

If you want to argue that the smart phone market will be closer on the spectrum of product markets to "unique products" than cars, that is a fine argument to make, but do not go overboard and argue that "commoditization" has not occurred in the automobile market.  That is a denial of reality. 

 

Given your refusal to acknowledge what I mean by "commoditization" and what the effects of commoditization may be -- a change in the profit pool and Apple's potential profit share -- there can be no moving forward here with this debate because the response will always be, see Nike or Porsche.  As I said above, my own opinion is that the value will shift away from hardware and the OS to the software and services that run on top, and differentiation will be much less for the core hardware and OS experience (and it already is much less, IMO).  Therefore, there is a danger that the profit pool will change, and Apple will not be able to capture close to $40 billion of pure profit every year going forward.

[rkbabang]

Cars are commoditized? What planet do you live on? Some segments are more commoditized than others, but at the higher-end a very large number of people care very much about the difference between an Audi and a BMW and a Porsche and a Jaguar and a Tesla, etc. Do I have to bring up the Nike example again? If there's something that should be commoditized, it's shoes, right?

 

As for the margins, of course the economics of the car industry are different from the consumer electronics and software industry. I don't think it's too relevant what margins they get.

 

The only thing I can say to this is that you seem to continue to misunderstand what I mean by "commoditization."  It doesn't mean that there is no "high end" or that there is no differentiation in the market.  Almost all product/service categories are subject to "commoditization," and there is a spectrum for product markets, with the opposite ends being "pure commodity" and "completely unique" products.

 

You are essentially taking "commoditization" to mean an end-state product market similar to natural resource commodities (e.g., petroleum or iron ore).  That is probably my fault for using TVs and toasters as examples of consumer product commoditization, which are closer to the "pure commodities" end of the spectrum.  But the reason I used those examples is because you insist, for some reason, that "consumer products" are not subject to the "good enough" phenomenon.

 

If you want to argue that the smart phone market will be closer on the spectrum of product markets to "unique products" than cars, that is a fine argument to make, but do not go overboard and argue that "commoditization" has not occurred in the automobile market.  That is a denial of reality. 

 

Given your refusal to acknowledge what I mean by "commoditization" and what the effects of commoditization may be -- a change in the profit pool and Apple's potential profit share -- there can be no moving forward here with this debate because the response will always be, see Nike or Porsche.  As I said above, my own opinion is that the value will shift away from hardware and the OS to the software and services that run on top, and differentiation will be much less for the core hardware and OS experience (and it already is much less, IMO).  Therefore, there is a danger that the profit pool will change, and Apple will not be able to capture close to $40 billion of pure profit every year going forward.

 

Maybe I'm dense, but why is it not appropriate to say "see Nike"?  The cell phone market will never be as commoditized as the shoe market.  There isn't much left you can do to a shoe, but with electronics there will always be improvements in technologies allowing better/faster/etc phones/interfaces as well as having nice designs.  Yet, Nike is still able to make better margins than many other companies and sell its products at a premium.  Please tell me how exactly that is different?  Unlike cars (maybe cars are a bad analogy) almost anyone can afford Nike shoes if they wish to pay the higher price.  Cell phones don't cost tens of thousands of dollars like cars, but hundreds like high end shoes.  The high end in shoes doesn't imply catering to the 1%.  This too is like Apple.

[rkbabang]

As I said above, my own opinion is that the value will shift away from hardware and the OS to the software and services that run on top, and differentiation will be much less for the core hardware and OS experience (and it already is much less, IMO).  Therefore, there is a danger that the profit pool will change, and Apple will not be able to capture close to $40 billion of pure profit every year going forward.

 

These software and services will still need to be run on a device (phone/watch/glasses/etc).  The device is still what people are going to be seen using.  I don't think it changes anything.  It just makes the design of the device itself all the more important.  If this is really where things are moving to, the 18ct gold Apple Watch is a brilliant move.

[Liberty]

But the reason I used those examples is because you insist, for some reason, that "consumer products" are not subject to the "good enough" phenomenon.

 

I "insist" because that's the actual real-world dynamic. But only at the premium, differentiated end of the market where people want the best (a relative positional thing), which is the only space Apple plays. This is what the facts show in other industries, and the consumer computing industry has much stronger network/ecosystem effects so there will be a lot fewer players left at the premium end of the market, so the winner(s) will have a much higher market share than, say, with cars or shoes or watches where there can be many more entrants and brand loyalty is about intangibles alone rather than lock in too. And because phones are relatively affordable to most people, the premium segment can be a lot bigger than for cars. And margins can be a lot higher in an industry where IP is your raw material rather than in a cyclical industry with high fixed costs, high capex, labor issues, etc, like with cars.

 

The low-end is already pretty commoditized (by any definition of that word), so that's clearly not the part I'm talking about.

 

Anyway, time will show who is right and who is wrong. This argument against Apple has been around for many years and so far it has proven completely wrong. In fact, the more personal electronics become, the better Apple has been doing because that plays to its strengths. They did better with laptops than desktops, better with iPods than latops, better with phones and tablets than iPods, and watches are a very interesting new space that is a lot more personal (always visible wearable). It'll be interesting to see the competition try to successfully go into this high-end fashion/design heavy space and sell thousand dollar watches with multi-hundred dollar bands... The more I think about it, the more I think this could be a hugely profitable new segment for Apple.

[txlaw]

Cars are commoditized? What planet do you live on? Some segments are more commoditized than others, but at the higher-end a very large number of people care very much about the difference between an Audi and a BMW and a Porsche and a Jaguar and a Tesla, etc. Do I have to bring up the Nike example again? If there's something that should be commoditized, it's shoes, right?

 

As for the margins, of course the economics of the car industry are different from the consumer electronics and software industry. I don't think it's too relevant what margins they get.

 

The only thing I can say to this is that you seem to continue to misunderstand what I mean by "commoditization."  It doesn't mean that there is no "high end" or that there is no differentiation in the market.  Almost all product/service categories are subject to "commoditization," and there is a spectrum for product markets, with the opposite ends being "pure commodity" and "completely unique" products.

 

You are essentially taking "commoditization" to mean an end-state product market similar to natural resource commodities (e.g., petroleum or iron ore).  That is probably my fault for using TVs and toasters as examples of consumer product commoditization, which are closer to the "pure commodities" end of the spectrum.  But the reason I used those examples is because you insist, for some reason, that "consumer products" are not subject to the "good enough" phenomenon.

 

If you want to argue that the smart phone market will be closer on the spectrum of product markets to "unique products" than cars, that is a fine argument to make, but do not go overboard and argue that "commoditization" has not occurred in the automobile market.  That is a denial of reality. 

 

Given your refusal to acknowledge what I mean by "commoditization" and what the effects of commoditization may be -- a change in the profit pool and Apple's potential profit share -- there can be no moving forward here with this debate because the response will always be, see Nike or Porsche.  As I said above, my own opinion is that the value will shift away from hardware and the OS to the software and services that run on top, and differentiation will be much less for the core hardware and OS experience (and it already is much less, IMO).  Therefore, there is a danger that the profit pool will change, and Apple will not be able to capture close to $40 billion of pure profit every year going forward.

 

Maybe I'm dense, but why is it not appropriate to say "see Nike"?  The cell phone market will never be as commoditized as the shoe market.  There isn't much left you can do to a shoe, but with electronics there will always be improvements in technologies allowing better/faster/etc phones/interfaces as well as having nice designs.  Yet, Nike is still able to make better margins than many other companies and sell its products at a premium.  Please tell me how exactly that is different?  Unlike cars (maybe cars are a bad analogy) almost anyone can afford Nike shoes if they wish to pay the higher price.  Cell phones don't cost tens of thousands of dollars like cars, but hundreds like high end shoes.  The high end in shoes doesn't imply catering to the 1%.  This too is like Apple.

 

There is absolutely nothing inappropriate with saying that Apple is like the Nike or Porsche of mobile device hardware.  As I have to keep repeating over and over again, make your "high end" comparisons all you want -- that's fine.

 

BUT if you then also say that because companies like Nike and Porsche exist, there is no "commoditization" effect in those markets, and Apple is not subject to market forces that could change the profit pool, I can't agree with that.  Ultimately, what we really should be arguing about is not Apple's position as a "high end" product provider, but what level of profits the entire smart phone hardware market can sustain going forward. 

 

In a hypothetical world, for example, where every smartphone provider other than Apple makes very, very low margins because they are depending on a razor blades business model, I am doubtful that the entire mobile phone hardware market can sustain as much profit, and Apple can keep the level of market share, to necessarily warrant the current market valuation.  But note that I view it as an asymmetric risk to the downside rather than an impossible upside.  So it's an argument about MOS.

 

Now, keep in mind that I'm also not taking into account new product categories and markets that Apple may create.  I could absolutely see Apple coming up with some amazing new category that keeps them earning $40 billion of profit a year.  But to me this is a lot risker proposition than the notion that Apple is the best designer of mobile hardware, and they will continue to generate amazing amounts of profit from those business lines alone going forward.

[frommi]

As I said above, my own opinion is that the value will shift away from hardware and the OS to the software and services that run on top, and differentiation will be much less for the core hardware and OS experience (and it already is much less, IMO).  Therefore, there is a danger that the profit pool will change, and Apple will not be able to capture close to $40 billion of pure profit every year going forward.

 

These software and services will still need to be run on a device (phone/watch/glasses/etc).  The device is still what people are going to be seen using.  I don't think it changes anything.  It just makes the design of the device itself all the more important.  If this is really where things are moving to, the 18ct gold Apple Watch is a brilliant move.

 

Just calculate what a huge drop in profit will happen when people use their phones 3 years instead of 2. I really can`t see this not happening in the next 10 years, with iPads its already happening.

[txlaw]

As I said above, my own opinion is that the value will shift away from hardware and the OS to the software and services that run on top, and differentiation will be much less for the core hardware and OS experience (and it already is much less, IMO).  Therefore, there is a danger that the profit pool will change, and Apple will not be able to capture close to $40 billion of pure profit every year going forward.

 

These software and services will still need to be run on a device (phone/watch/glasses/etc).  The device is still what people are going to be seen using.  I don't think it changes anything.  It just makes the design of the device itself all the more important.  If this is really where things are moving to, the 18ct gold Apple Watch is a brilliant move.

 

Of course the software and services need the devices to run. 

 

The question is what sort of margins per unit can device sales generate going forward, and how many of these devices will Apple sell on an annual basis going forward.  If the differentiation for most smart phone hardware becomes miniscule, and the cost of such hardware continues to go down at a rapid rate, then the "high end" of the smart phone market could generate far less absolute profits per year. 

 

Here's how I believe Apple can possibly sustain its position as one of the world's best businesses, and it's not about a fantasy land where the "innovation gap" is not closed.

 

I can imagine a world where the big tech companies have a very close and almost unbreakable relationship with individuals because their software and services power your phone, desktop/laptop, TV, wearables, your home, and a multitude of other things in your home that utilize compute power and are connected to the Internet.  They will generate value from that relationship somehow, be it product sales, service sales, advertising/data mining, etc.

 

That is where I really see Apple potentially sustaining their role as a fantastic business going forward.  But that will require them to get very good at software and services in a way that they haven't demonstrated as of yet.  And they will have competitors who are on par with them, so it is unclear how it all shakes out.

[txlaw]

Here's the last thing I will add to this thread, related to my last post re: big tech and these companies' relationships with end users.

 

My worry about Apple versus, say, an Amazon or Google is that Apple's incredible focus on certain product categories and its unique way of doing things means that Apple takes less of a portfolio approach to the tech businesses than those other guys.

 

Because high tech is such a rapidly changing market, my preference is to invest where a company will benefit from rapid, unappreciated profit growth potential (somewhat like a VC), where a company takes a portfolio approach, or where the company is better off dead than alive (i.e., a cigar butt). 

 

To me, the portfolio approach is why IBM has lasted so long.  Over they years, they have changed their portfolio of businesses to serve their end customer and have generated immense value over time.  I think Amazon takes the same approach, as does Google and Microsoft.  So they are far less risky in nature than Apple. 

 

And then the cutting edge big tech portfolio guys -- GOOG and AMZN -- also go further and operate in a way that Apple partisans would derisively call the "throw shit at the wall" approach.  But they "throw shit at the wall" better than anyone else at the moment and so, over time, I expect them to do quite well.  That's why I'm a big believer in Bezos because he is the best at making that approach work over time in a highly lucrative way. 

[innerscorecard]

But see, you basically assume the Google model for consumer electronics, that devices are merely dumb glass for the services layer where the real value is added. As Apple has shown, it differentiates with services that require specific, differentiated hardware. And with each generation, Apple's innovation is more and more hardware dependent, not less (see Touch ID, Taptic Touch, etc.). And as devices get more and more personal (Apple Watch), differentiation among devices may become more important, not less.

[Liberty]

But that will require them to get very good at software and services in a way that they haven't demonstrated as of yet.

 

Online services is a weak spot of the company (though some parts are very strong -- people underestimate just how gigantic iTunes, iMessage, and the App Store are).

 

But software? What do you think iOS and OSX are? Two best-of-breed OSes which are being updated rapidly. And now they just came out with Swift, a huge deal that lays a foundation for the coming decades, along with tons of great new API platforms that their best-in-the-world developer ecosystem can build on (XPC, TouchID, Homekit, Healthkit, Cloudkit, CarPlay, soon Apple TV apps I'm sure, Metal for graphics, etc). Almost everybody adopted Webkit, the HTML rendering engine that Apple built (on top of KDE's KTHML, but they made huge contributions even before Google adopted it, to then fork it again). That's another huge, very complex software project that they built up from almost zero market share when IE and Mozilla dominated.

[DCG]

If done right, I think CarPlay should/will be a bigger market for Apple than the Apple Watch.

 

 

If the can somehow make CarPlay available as a stand-alone receiver you can mount on your dashboard (similar to what Sirius offers), I'd buy it in a second. Changing all my music and podcasts on my phone while driving is a pain - a bigger pain than taking my phone out of my pocket to check the time or apps). Hoping the next car I buy (probably in a couple years) will have this built in.

[roundball100]

Here's the last thing I will add to this thread, related to my last post re: big tech and these companies' relationships with end users. [...]  That's why I'm a big believer in Bezos because he is the best at making that approach work over time in a highly lucrative way.

A "highly lucrative way"? Isn't the real problem with Amazon that they haven't yet demonstrated that they can deliver real profits?

[Liberty]

Here's the last thing I will add to this thread, related to my last post re: big tech and these companies' relationships with end users. [...]  That's why I'm a big believer in Bezos because he is the best at making that approach work over time in a highly lucrative way.

A "highly lucrative way"? Isn't the real problem with Amazon that they haven't yet demonstrated that they can deliver real profits?

 

Bezos is a great retailer and I think that if he wasn't reinvesting so much in growth, he could show GAAP profits.

 

But Amazon is far from a product company. Its best products are mediocre at best, if not terrible. How's the premium-priced-at-launch Fire Phone doing? The Kindle is selling mostly because of Amazon's near monopoly in ebooks. If ebooks were all sold on open DRM free standards, almost anyone else could make a better e-ink reader than Amazon and kill the Kindle.

[DCG]

Here's the last thing I will add to this thread, related to my last post re: big tech and these companies' relationships with end users. [...]  That's why I'm a big believer in Bezos because he is the best at making that approach work over time in a highly lucrative way.

A "highly lucrative way"? Isn't the real problem with Amazon that they haven't yet demonstrated that they can deliver real profits?

 

Bezos is a great retailer and I think that if he wasn't reinvesting so much in growth, he could show GAAP profits.

 

But Amazon is far from a product company. Its best products are mediocre at best, if not terrible. How's the premium-priced-at-launch Fire Phone doing? The Kindle is selling mostly because of Amazon's near monopoly in ebooks. If ebooks were all sold on open DRM free standards, almost anyone else could make a better e-ink reader than Amazon and kill the Kindle.

 

 

Agreed.

 

 

Still waiting for Apple to come up with a way to allow the iPad to switch between color display and e-Ink.

[Liberty]

http://9to5google.com/2014/09/29/samsung-note-4-screen-gap-screengate/

 

I wonder if this will be all over every single media outlet for days. Oh wait, of course not. Not because there's a conspiracy, but mostly because people don't care about Samsung phones the way they care about iPhones, so the coverage wouldn't draw much attention...

[rkbabang]

Agreed.

 

Still waiting for Apple to come up with a way to allow the iPad to switch between color display and e-Ink.

 

I'd love that.  I have a Kobo Aura HD.  It is miles better than the Kindle paperwhite (the screen is better, the light is more even), it supports sideloading epub and mobi, and once you are reading a book it is perfect.  The problem is finding a book in your library. The software is bad, I mean really, really bad.  I have a few thousand books on it and sorting through them and organizing them is nearly impossible.  What I am considering doing is removing all of my books and only putting a few books at a time on it.  Once I read 4 or 5 books, I'll remove them and put 4 or 5 more on it.  If you have more than a couple of books on it at any one time it is a hassle.  I'd love for Apple to do an e-ink reader right.  Or produce a cover for the iPad which has a retina e-ink screen to turn your iPad into an e-reader.  That would be perfect.

[intothebreach]

Hello all, as my first post (after lurking for way too long!), I will offer this, hoping to compensate a little for the low velocity of this thread... ahem! (another way to say that this post should be fairly rapidly lost in deeper pages in case it proves to be not so good  : )

 

First off, I am quite possibly completely biased as Apple is my largest investment ahead of BRK (even if somewhat reduced after selling off LEAPS bought in the darkness of Spring 2013, a rare event for me), but I believe it is one of the few companies falling in my circle of competency.

 

My investment theory here is built on what I perceived as being Apple's biggest competitive advantages: 1) an ability to deliver a premium consumer experience versus available alternatives*, 2) a combination of network effect in that each new device and service brings a little more value to the rest, 3) low but increasing switching costs for users (in both replacement costs of accessories and other devices plus effort of learning a new interface), 4) their ability to protect margin by both decreasing component costs, limiting models and steadily introducing improvements to maintain prices and 5) increasingly, demonstrated respect for the privacy of their users (other than the U2 gift). To that I add the optionality of potentially being able to port their premium experience in other markets, such as watches and cars.

 

As a consumer, I very much welcome all forms of competition if only to make sure none of the players rest on their laurels (in fact, I was a bit peeved when Bill Gates—who I have huge respect for—admitted candidly that his reaction to the launch of the iphone that they had not aimed high enough, implying that they could have...) As a Canadian, I would have loved Blackberry (aka The Artist Formerly Known As RIM) to still be a major player in this space, and even Nokia, Microsoft or Palm.

 

However, as an investor looking at the market, I see that Samsung's otherwise successful fast follower strategy is severely handicapped by not fully controlling its core technology and having different goals that its "partner" Google, while also being spread thin in trying to cover all bases (the "stuff against the wall" approach which was ubiquitous in the wireless telco space before Apple and, to be fair, RIM when they almost single-handedly controlled the business market). Samsung clearly remains the second most profitable player in the space, but I have a hard time picturing them closing the "experience + quality" gap, and fending off the increasing Chinese competition at the same time (which also requires a very wide breadth of offering).

 

If I had to name the competitors that could give Apple a run for its money, I would go with Amazon even if it has not so far because of their focus on consumer experience and technological capabilities demonstrated in other aspects of their business (AWS and such), and Microsoft because, in theory, it has all the component but so far not the right recipe.

 

Apple is never first anywhere, but their slow, deliberate approach usually results in a redefinition of the marketplaces they enter (single data point as an example: I bought my first Mac because all the PCs out there at that time felt like cheap plastic toys with too many lights (and was actually looking for a HP/Compaq replacement) and today a lot of laptops look like Apple's). Just for fun: look at comparison of smart phones pre/after the iphone and transpose this to watches. Or again, the first iphone vs the 6, and transpose that to the Apple Watch. Not saying history will repeat, but I like having this as an option play which does not seem to cost me much, if anything.

 

Add to this what appears to be superior management, as demonstrated by a very disciplined utilization of its cash reserves and a very good (albeit far from perfect, as glitches with maps and iOS 8.0.1 have shown) operational and financial execution (ie, protecting margins). To me Apple is an example of a superior business selling at a decent price (and seemed rather cheap the last time I added both shares and the aforementioned LEAPS back in April 2013). And lastly its stock regularly goes on sale, providing repeated buying opportunities.

 

I have read with interest the exchange on the potential commoditization. And while I do not pretend to know how this will end, I will share what I am watching for: For starter, commoditization would imply a loss of pricing power, which is not happening so far for Apple, but seem to happen regularly for competitors (the Amazon Fire being a recent example). Also, no one before Apple (other than, again and to a lesser degree, RIM/Blackberry) was able to dictate to carriers how the game would be played. Back then, I used to work as a consultant for a Canadian carrier and the carriers clearly held the upper hand in negotiating with OEMs. All handsets were branded by the carriers and usually loaded with crappy carrier software to sell you stuff such as ring tones and such (definitely not a plus experience-wise).

 

Apple starting to soften its stance on such a key aspect of the user experience would be for me a sign that it may be time to move on. Other signs to watch for would be degradation of the shopping or customer service experiences (there was a moment I was actually starting to worry under Browett).

 

Hope this is useful to some. And I'll close this off with a huge thanks to administrator and the regular quality contributors who make lurking here such an interesting experience!

 

* for a given target market; the experience they offer is actually a turn-off for others, such as technically-inclined folks who feel overly constrained by Apple's choices.

 

[innerscorecard]

Agreed.

 

Still waiting for Apple to come up with a way to allow the iPad to switch between color display and e-Ink.

 

I'd love that.  I have a Kobo Aura HD.  It is miles better than the Kindle paperwhite (the screen is better, the light is more even), it supports sideloading epub and mobi, and once you are reading a book it is perfect.  The problem is finding a book in your library. The software is bad, I mean really, really bad.  I have a few thousand books on it and sorting through them and organizing them is nearly impossible.  What I am considering doing is removing all of my books and only putting a few books at a time on it.  Once I read 4 or 5 books, I'll remove them and put 4 or 5 more on it.  If you have more than a couple of books on it at any one time it is a hassle.  I'd love for Apple to do an e-ink reader right.  Or produce a cover for the iPad which has a retina e-ink screen to turn your iPad into an e-reader.  That would be perfect.

 

I don't think Apple will do e-Ink, ever. Retina displays do well enough the job-to-be-done of a screen good enough for reading.

[Liberty]

A must read on the Watch:

 

http://www.ablogtowatch.com/apple-watch-hands-on-review/

[Liberty]

That's pretty premium..

 

http://www.macrumors.com/2014/09/29/apple-watch-colette-boutique-paris/

[Liberty]

Apple got the last license needed. iPhone 6 and 6+ can now be sold in China:

 

http://mobile.reuters.com/article/idUSKCN0HP04820140930?irpc=932

[innerscorecard]

What is most remarkable for me is the MIIT's detailed explanation, citing tests of security backdoors, for why there was a delay in iPhone 6 approval:

 

http://www.miit.gov.cn/n11293472/n11293832/n11293907/n11368223/16152690.html

[innerscorecard]

Date is set! October 17.

 

http://www.apple.com/pr/library/2014/09/30iPhone-6-iPhone-6-Plus-Available-in-China-on-Friday-October-17.html

[rkbabang]

Agreed.

 

Still waiting for Apple to come up with a way to allow the iPad to switch between color display and e-Ink.

 

I'd love that.  I have a Kobo Aura HD.  It is miles better than the Kindle paperwhite (the screen is better, the light is more even), it supports sideloading epub and mobi, and once you are reading a book it is perfect.  The problem is finding a book in your library. The software is bad, I mean really, really bad.  I have a few thousand books on it and sorting through them and organizing them is nearly impossible.  What I am considering doing is removing all of my books and only putting a few books at a time on it.  Once I read 4 or 5 books, I'll remove them and put 4 or 5 more on it.  If you have more than a couple of books on it at any one time it is a hassle.  I'd love for Apple to do an e-ink reader right.  Or produce a cover for the iPad which has a retina e-ink screen to turn your iPad into an e-reader.  That would be perfect.

 

I don't think Apple will do e-Ink, ever. Retina displays do well enough the job-to-be-done of a screen good enough for reading.

 

I agree that Apple will probably never do it, because there isn't a large enough market for it.  But I disagree that the bright backlit iPad display is even sufficient for daily reading of book length material, not even close to good enough.