The E-Reader Price Wars Heat Up
The battle for tech-savvy bookworms is on, with Amazon, Barnes & Noble, and Sony competing to sell e-book reader hardware. And as the major players struggle for better position in the electronic-publishing industry, recent months have seen price drops, new devices, and defeats.
Competition stepped up in June when a price war broke out. First Barnes & Noble slashed the price of its Nook by $60, down to $199; the company also started selling a Wi-Fi-only Nook for $149. Within hours Amazon dropped the price of its Kindle by $70, to $189. And ten days later, Sony cut the price of each of its three Reader products by $30, bringing its most expensive 3G version down to $229.
What's sparking e-reader price drops? Thank Apple's iPad, the dominant multipurpose tablet available today--and the juggernaut that has the major single-purpose e-reader makers quaking. In the face of this competition, other e-reader manufacturers have thrown in the towel. Plastic Logic has dumped plans to launch its QUE e-reader, and says that it will instead focus on creating a next-generation ProReader. Samsung delayed its e-readers indefinitely.
The e-reader is at a crossroads. Amazon and other companies must make the case that their dedicated products have a place in a world filled with multipurpose devices that can display e-books, such as smartphones, tablets, and netbooks. Each e-reader maker also wants to ensure that its product becomes the de facto standard for reading e-books. After all, repeat sales of e-books look to be where the real money is. Selling e-reader hardware with hooks to e-bookstores is more critical now than ever.
Market research firm The Yankee Group forecasts that 6 million e-readers will ship in 2010; that number is expected to grow to 19.2 million by 2013. And experts say e-book sales will follow the same growth curve.
E-books represent a fraction of overall publishing sales, but it's a growing share: The Association of American Publishers says that though e-book sales for the month of May totaled just $29.3 million, sales grew by 163 percent that month and have already increased by 207 percent in 2010 compared with 2009.
Amazon has said that 80 percent of its Kindle-book buyers own a physical Kindle; the other 20 percent are using one of Amazon's apps for Android, BlackBerry, iPad, iPhone, Mac, or PC.