Amazon’s Number One Selling Kindle Is As Popular As Ever at Flashlights

Amazon’s Number One Selling Kindle Is As Popular As Ever

This time last year, the new market for e-book readers was really taking off – gold rush style. Following the stunning success which Amazon had achieved with its Kindle reader – first with the Kindle 2.0 in February of 2009 and then with the large format DX edition in the summer of the same year – a veritable host of personal electronics manufacturers were either developing, releasing or updating their own e-book readers so as to get their share of the nascent market.

Sony and Barnes and Noble were working feverishly to get their new readers to market in advance of the 2009 festive season and Plastic Logic, Asus and a number of others were rushing to get their readers released as quickly as they could manage. The Computer Electronics Show (CES), which took place in Las Vegas in early 2010, had a special zone dedicated to e-book readers for the first time ever. E-book readers were a hot new emerging market.

Currently, no more than a few short months later, the scene is very different. The price of e-book readers has tumbled. The latest third generation Kindle now has a Wi-Fi only entry level model available for only $ 139 – less than 40% of the $ 359 price which the Kindle 2.0 launched. The price of Barnes and Noble’s Nook reader is also down on its launch price at $ 149 – and you can expect to see this fall further prior to the festive season.

A number of e-book readers in development – including Plastic Logic’s Que – have been shelved. The market seems to be entering a new stage in its development – and whether there is any place in it for pure electronics manufacturers or not is highly debatable. Amazon’s business model is very well suited to selling lower priced readers and making a profit on the ongoing sales of Kindle books. A similar strategy would be available to Barnes and Noble of course, but it’s debatable as to whether or not they can benefit from the same types of economies of scale as Amazon.

Of course, it would be lunacy to suggest that the launch of the Apple iPad had not played a major part in this. It’s certain that the price of e-book readers would have trended downwards anyway – but the iPad’s launch certainly speeded things up a bit. However, based on the fact that the third generation Kindles sold out shortly after launch – even today customers are facing a three to four week wait before their Kindles will ship – it doesn’t look as if the iPad is the long awaited Kindle Killer that it was widely predicted to be.

Even disregarding the debate about e-ink displays being better for reading on than backlit screens, there is – currently at any rate – more than enough daylight between the Kindle price and the price of even the entry model of iPad to make the Kindle a very attractive option for prospective customers whose chief interest is reading books. The iPad’s monthly connection fees will be a stumbling block for many customers.

It does look as if there is enough room in the market for both the Amazon Kindle and the iPad to co-exist – for the foreseeable future at least. Other e-book reader manufacturers, including Sony and Barnes and Noble, seem destined to struggle as hardware prices will continue to fall.