Why Amazon Are Better Placed Than Other Manufacturers To Cope With Changes In The E-Book Reader Market
This time last year, the e-book reader market was like the Wild West – or maybe the gold rush would be a more appropriate metaphor. Following the huge success which Amazon had achieved with its Kindle reader – first of all with the Kindle 2.0 in February of 2009 and then with the large display DX model in the summer of the same year – a small army of personal electronics firms seemed to be developing, releasing or updating e-book readers of their own in order to grab a share of the new and rapidly developing market.
Sony and Barnes and Noble were working feverishly to get their new readers to market in advance of the 2009 festive season and Plastic Logic, Asus and a number of others were rushing to get their readers released as quickly as they could manage. The Computer Electronics Show (CES), held in Las Vegas in early 2010, had a dedicated e-book reader section for the first time ever. E-book readers were a hot new emerging market.
However, just a few months later, it’s a very different scene. The price of e-book reader hardware has been in free fall. The latest third generation Kindle now has a Wi-Fi only entry level model available for only $ 139 – less than 40% of the $ 359 price which the Kindle 2.0 launched. The price of the Nook reader from Barnes and Noble has also been slashed to just $ 149 – and a further cut before the festive season arrives seems highly likely.
A number of e-book readers in development – including Plastic Logic’s Que – have been shelved. The market seems to be entering a new stage in its development – and whether there is any place in it for pure electronics manufacturers or not is highly debatable. Amazon’s business model is very well suited to selling lower priced reader hardware and making a profit on the follow up sales of Kindle books. Barnes and Noble could employ a similar strategy – but it’s somewhat debatable as to whether or not they could make use of economies of scale in the same way that Amazon can.
Clearly the release of Apple’s iPad tablet computer has been an important influence in this. E-book reader prices were always going to fall – but the appearance of the iPad definitely seems to have jollied things along quite a bit faster. However, bearing in mind the fact that the new third generation Kindles sold out shortly after they were released, the iPad doesn’t look like the Kindle Killer that it was expected to be.
Aside from the debate about e-ink displays being better to read on than back-lit screens, there is – for the moment at least – enough daylight between the Kindle price and the price of the entry level iPad to make the Kindle the more attractive choice for anyone whose chief interest is reading books. The iPad’s monthly connection fees will be a stumbling block for many customers.
It does seem that there is enough room in the market for both the Amazon Kindle and the iPad to co-exist – for the short term future at any rate. Other manufacturers of e-book readers, including major players like Barnes and Noble and Sony, may well find things starting to get tough as reader prices keep falling.
Learn more about the Amazon Kindle for yourself and view the wide range of Kindle accessories available to help you personalise your reader.
