E-Book Reader Price Cuts Could Signal Big Changes In The World Of Digital Publishing
Amazon, using their Kindle reader family as a vehicle, has been a major player in the development of both the e-book reader and e-book market. The first Kindle was released in November of 2007. In February of 2009, the updated and enhanced Kindle 2.0 hit the market, quickly followed by the large format Kindle DX in the summer of the same year.
The Kindle readers dominated the market and took a 60% share of all e-book reader sales in the USA. The Sony reader, which was actually launched in 2006 before the Kindle, followed in second place with a share of around 35%. Other companies saw the potential of the e-book reader market and launched or updated their own readers to get a slice of the pie.
Manufacturers like Bookeen, Plastic Logic, Sony and Barnes and Noble worked hard to get their share of the rapidly developing market, but the dominance of the Kindle seemed pretty well established, if not unassailable. It was only when Apple launched their iPad that the Kindle faced any credible competition – despite the fact that the two devices were very different and, you would think, aimed at different target markets.
Nevertheless, since the release of the iPad, e-book reader prices have pretty much gone into free fall. The Kindle 2.0, which retailed for $ 359 at its February 2009 launch is now priced at just $ 189. The Kindle DX, which has just had a mini makeover and now sports a new higher contrast screen, has had its price slashed from $ 489 to $ 379. Still a pricey piece of kit, but a lot cheaper than before and also way cheaper than even the entry level iPad (which also has a monthly connection fee associated with it). The price of the Barnes and Noble Nook reader has also dropped to just $ 199.
Although the iPad seems to have provoked a round of price cuts among the manufacturers of e-books, the same cannot be said about the price of the e-books to read on these devices. Prior to the launch of the iPad, Apple had negotiated a deal with the major publishing houses which let them set the price of their e-book editions at pretty much whatever they wanted – as long as they did not allow the same e-book to be offered cheaper on any other platform. This was seen as good news by the publishers, who had been unhappy with Amazon’s policy of selling all e-books for $ 9.99 or less.
Amazon may have had to abandon their low e-book price policy – but that wasn’t necessarily a disaster for them. Considering the way that Amazon have made it possible to read Kindle books on such a wide variety of different devices – you can use the PC, the Mac, the iPod Touch, the iPhone, the iPad, your Blackberry and any device which runs Android to read Kindle books right now (and no doubt there will be further additions in future) – it must be obvious that Amazon are more interested in book sales than hardware sales. The latest downward price movement for e-book readers and simultaneous price increase for e-books means that they can now sell the hardware for less and make their profit by selling e-books over the life of the hardware. The same will apply for Barnes and Noble and Apple themselves of course.
It may be that the future pricing of e-book readers and e-books will tend to favor such companies over manufacturers who are involved only in hardware production. Looking at the number of different devices which Kindle books can be read on, you would have to suspect that, whether or not the iPad becomes the reader of choice for many users, Amazon will continue to have a huge say in the future of books and e-books for the foreseeable future.
