Will E-Book Reader Prices Continue To Fall?
Wednesday, September 1st, 2010When Amazon launched the original Kindle e-book reader back in November of 2007, there must have been a lot of discussion as to what the correct price point was. The Kindle wasn’t the first e-book reader on the market (not by a long way), but neither was the market mature enough to suggest a clear price point. They also had a variety of different pricing plans that could have worked.
They might have decided to go for a cell phone type of plan with the price of the hardware being heavily subsidised by regular monthly payments over a fixed contract length. Some intermediate arrangement with a charge to download books or surf the web might have also been a viable option. In the end, Amazon decided to charge the full price for the Kindle reader and to have no monthly fee - connection via 3G was included in the $ 359 selling price. Nor was there any fee for downloading Kindle books, it was pretty much an all inclusive package.
The Kindle was fairly well received - Oprah Winfrey announced that it was her “new favorite gadget” - but it didn’t really change the world. It was perceived as very much a work in progress - which is pretty much what it was. It was only with the launch of the Kindle 2.0 in February of 2009 that the e-book market really took off. The Kindle 2.0 was also priced at $ 359 and the large format Kindle DX followed in the summer of 2009 with a ticket price of $ 489.
The e-book reader market was hot and, for a while, it appeared as if all the major electronics companies either had a reader of their own or had one in the development pipeline. Companies such as Plastic Logic, Sony, Barnes and Noble, Bookeen and iRex fought to secure their share of the new and fast developing e-book market. The Kindle had a reported 60% share of the e-book reader market and was the standard to which other e-book reader manufacturers needed to aspire. Any reader which displayed the slightest potential was immediately dubbed the “Kindle killer” - but the truth was that the Kindle had no genuine competition.
That all changed with the launch of the Apple iPad and, not for the first time, industry analysts predicted the death of the Kindle. However, once again, the predictions of the Kindle’s demise seems to have been somewhat premature. The third generation Kindle was launched in August of 2010 and was an instant success. Shortly after the Kindle 3 launched Amazon were sold out of the new readers and prospective customers were faced with a four or five week wait before their new readers would ship.
As well as all the usual technical upgrades - faster page turns, smaller, lighter body, better contrast display, increased memory etc. - Amazon introduced a new entry level Wi-Fi only Kindle priced at just $ 139. The price of the 3G plus Wi-Fi model was set at $ 189 - a big drop compared to the $ 359 price. More importantly perhaps, the new Kindles are considerably cheaper than even the entry level iPad - and there’s no monthly connection fee to pay.
It seems fairly obvious that the Kindle and the iPad can co-exist. If the same can be said for other e-book readers must be somewhat questionable. The big advantage that Amazon enjoys over some other e-book reader manufacturers is the fact that, being a book seller, it will be able to profit from the ongoing sale of e-books. It could elect to subsidise the sales of its reader hardware using the profits from e-book sales if it wished.
The e-book market is maturing very quickly. It seems obvious that hardware prices have still got some way to fall, and very possibly in the near future. Could we conceivably see Amazon, and maybe Barnes and Noble, making e-book readers available for free in an attempt to lock in future e-book sales? Is it to fanciful to suppose that customers who join Amazon’s premium delivery Prime club or who sign up for an Amazon credit card could find themselves taking receipt of a free, or at least heavily discounted, Kindle reader in the fairly near future? Time will tell.
Find out more about the Amazon Kindle for yourself and view the wide range of Kindle accessories available to help you personalise your reader.
