It looked like Amazon had found the perfect product for their business model in the form of the Amazon Kindle reader. Its domination of the emerging e-book reader market was almost complete. It achieved around about a 60% market share (the Sony reader trailed in second with a 35% market share), and it was difficult to see, despite the fact that almost every new reader that was released was instantly christened the “Kindle Killer”, where the competition was going to come from.
Then the Apple iPad came along and, although it is an entirely different device, it did look set to spoil the party somewhat. The iPad is not without some fairly major flaws of its own, and whilst most Apple devices seem to provoke a “love them or loathe them” response, the numbers of people who would buy almost anything with the Apple logo on it are certainly large enough to make a major dent in the sales of the Kindle.
As well as releasing new, sexy hardware, Apple also struck a deal with many of the major publishers which let them charge whatever they wanted for e-books – as long as they weren’t offered for less on any other device – the Kindle in other words. This looked set to put a bit of a spanner in the works of Amazon’s policy of providing e-books for $ 9.99 or less. It certainly seems as if the price of e-books has been creeping upwards since the launch of the iPad. It does seem a little strange that increased competition should drive prices upwards – but there you have it.
The price of the hardware for reading the e-books has certainly fallen in the same timespan. The Nook reader, from Barnes and Noble, has seen a price reduction to $ 199 from $259. Amazon themselves have now cut the Kindle 2.0 price to $ 189 – quite a drop from the February 2009 launch price of $ 359. The larger format Kindle DX has been upgraded with a new sharper screen and the price has been cut from $ 489 to $ 379.
The freshly updated Kindle DX is now more than $ 100 cheaper than the entry level iPad – and it requires no monthly payment to connect to the internet, unlike the iPad. Many people will be happy to pay more for the iPad of course, as it is a more powerful and versatile device.
It will be interesting to see whether this downward price movement of e-book readers is simply a temporary reaction to the iPad or whether it heralds the dawn of a new pricing policy. It could be that companies like Amazon and Barnes and Noble might take advantage of the trend for higher priced e-books by offering lower priced hardware secure in the knowledge that they will make their profit throughout the life of the device. Or it may simply be a stalling tactic until the next generation color Kindle hits the streets later this year.
Find out more about the Amazon Kindle for yourself and view the wide range of Kindle accessories available to help you personalise your reader.
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