What Is In Store For The E-Book Reader Arena?

This time last year, the new market for e-book readers was really taking off – gold rush style. Following the huge success which Amazon had enjoyed with its Kindle reader – firstly 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 bursting a gut to get their new readers launched before the 2009 festive season and Samsung, Plastic Logic, Asus and a host of others were rushing to get their readers on the market as fast as they could. For the first time ever, the Computer Electronics Show, which took place in Las Vegas during early 2010, featured a dedicated area for e-book readers. E-book readers were a hot new emerging market.

Right now however, no more than a few months later, it’s an entirely different scenario. The price of e-book readers has tumbled. Amazon have now introduced an entry level, Wi-Fi only, Kindle priced at $ 139 – not much more than a third 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.

Several new e-book readers which were going through the development process – including Plastic Logic’s Que – have been cancelled. 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 reader hardware and making a profit on the follow up sales of Kindle books. Barnes and Noble could employ a similar strategy – but it’s somewhat debatable as to whether or not they could make use of economies of scale in the same way that Amazon can.

Of course, it would be lunacy to suggest that the launch of the Apple iPad had not played a major part in this. There’s little doubt that e-book reader prices would have come down anyway – but the iPad has certainly hastened things along quite a bit. However, bearing in mind the fact that the new third generation Kindles sold out shortly after they were released, the iPad doesn’t look like the Kindle Killer that it was expected to be.

Apart from the debate about e-ink displays being easier to read on than backlit screens, there is – for the moment at least – enough daylight between the price of the Kindle and the price of even the entry level iPad to make the Kindle the more attractive option for anyone whose primary 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 ample room in the market for both the Amazon Kindle and the iPad to co-exist – for the short term 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.