Amazon’s Kindle reader seemed to be the ideal product for Amazon. Its dominance of the e-book reader market was complete, it enjoyed approximately 60% of all e-book reader sales, and it was very difficult to see where the competition was coming from. There were many predictions of a “Kindle killer”, but despite the release of new readers by the likes of Sony, Barnes and Noble, Plastic Logic and Bookeen, the Kindle looked set to maintain its number one position.
Then Apple released their long awaited iPad and, although it is a completely different device, it did look set to upset Amazon’s plans 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” reaction, 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 publishing houses 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 lower. It certainly seems that e-book prices have been trending up since the launch of the iPad. It does seem a little counter-intuitive that prices should rise as a result of increased competition – but that’s exactly what happened.
However, when it comes to the actual e-book reader hardware, it’s a very different story. Barnes and Noble have dropped the price of their Nook reader from $ 259 to $ 199. Amazon have now reduced the price of the Kindle 2.0 from $ 259 to $ 189 – a significant reduction bearing in mind that it sold for $ 359 when it was first launched in February of 2009. The price of the larger format Kindle DX has also been cut from $ 489 to $ 379, an event which coincides with the device’s first upgrade which includes a higher contrast screen and a new body color.
Even the top of the range DX model is now more $ 100 cheaper than the entry level Apple iPad. Neither does the iPad come with connection to the internet for free as is the case for the Kindle reader range. Of course, the iPad is very much more than just an e-book reader, so it may very well be the case that people are happy to pay more for a more versatile and powerful device – even if it does have much shorter battery life and a less “reader friendly” screen (which excels for other applications).
It will be interesting to see whether these e-book reader price reductions are no more than a knee-jerk response to the release of the iPad or whether they signify a new approach to the pricing of e-book readers and e-books. 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 just be a stalling tactic until the next generation color Kindle hits the streets later this year.
