Amazon’s Kindle reader has been a major factor in the development of the e-book reader and e-book market. The original Kindle launched in November of 2007. The Kindle 2.0 was released in February of 2009 and the large format Kindle DX followed in the summer of the same year.
The Kindle readers dominated the market and secured a 60% share of all e-book reader sales in the USA. The Sony reader, which hit the market in 2006 before the Kindle, followed in second place with a share of around 35%. Other manufacturers quickly saw the potential of the fast growing e-book reader market and either developed or updated readers of their own in order to gain a share of the market.
Companies such as Sony, Barnes and Noble, Bookeen, Plastic Logic and iRex tried their best to get their share of the new and fast developing e-book market, but the Kindle’s dominant position looked to be pretty much unassailable. It wasn’t until the appearance of the Apple iPad that the Kindle had any serious competition – even although the two devices were very different and would appeal, you might think, to different market segments.
Since the launch of the iPad, e-book reader prices have dropped quite some way. The Kindle 2.0 is currently selling for just $ 189, a huge reduction over the $ 359 launch price of February 2009. The newly upgraded Kindle DX, with a new high contrast display, is now available for just $ 379, down from $ 489. The Nook reader, from Barnes and Noble, also fell in price to $ 199 from $ 259.
Although the iPad seems to have provoked a round of price cuts among the manufacturers of e-book readers, 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 permit the same e-book to be offered at a lower price on any other platform. This was welcomed by the publishers, who had been dissatisfied with Amazon’s policy of pricing all e-books for $ 9.99 or lower.
Despite having to re-assess their e-book pricing strategy, it’s not a disaster for Amazon. Amazon has always appeared to be more interested in selling books – and e-books – rather than hardware. It’s difficult to see any other explanation for the fact that they have made Kindle books available on such a wide variety of different devices. At the moment, you can read Kindle books on the PC, the Mac, your Blackberry, the iPod Touch, the iPad and any mobile device which runs Android. So companies like Amazon, Barnes and Noble and now Apple, who have a stake in the future sale of e-books over the life of a reader, can take the opportunity to sell the hardware for less and still make their profit over the lifetime of the device.
It may be that the future pricing of e-book readers and e-books will tend to favour such companies over manufacturers who are involved only in hardware production. Considering the number of different devices which Kindle books can be read on, you would have to think 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.
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