The Amazon Kindle reader has been instrumental 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 took a 60% share of all e-book reader sales in the USA. The Sony reader, which was actually launched in 2006 before the Kindle, followed in second place with a share of around 35%. Other companies saw the potential of the e-book reader market and launched or updated their own readers to get a slice of the pie.
Manufacturers like Bookeen, Plastic Logic, Sony and Barnes and Noble worked hard to get their share of the rapidly developing market, but the dominance of the Kindle seemed pretty well established, if not unassailable. It was only when Apple launched their iPad that the Kindle faced any credible competition – despite the fact that the two devices were very different and, you would think, aimed at different target markets.
Since the launch of the iPad, e-book reader prices have fallen 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 large format Kindle DX has been upgraded, being fitted with a new improved screen, and has had a price reduction from $ 489 to just $ 379. Barnes and Noble have also dropped the price of their Nook reader from $ 259 to $ 199.
Although the iPad seems to have provoked a round of price cuts among the manufacturers of e-books, 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 allow the same e-book to be offered cheaper on any other platform. This was seen as good news by the publishers, who had been unhappy with Amazon’s policy of selling all e-books for $ 9.99 or less.
Although Amazon had to modify their approach, it wasn’t all bad news for them – or for Barnes and Noble either. Amazon had always given the impression that they were much more interested in book sales – and e-book sales – than they were in hardware sales. How else to explain the fact that they had bent over backwards to make it possible to read Kindle books on such a wide variety of different devices? It’s possible to read Kindle books on the PC, the Mac, the iPod Touch, the iPhone, the iPad, the Blackberry and any mobile device that runs Android. The latest price movements mean that Amazon, and other companies such as Barnes and Noble – and now Apple – who have a significant stake not just in the sale of hardware but also in the sale of e-books, can adopt a policy of selling the hardware cheap and making their profit in the sale of e-books over the life of the reading device.
This trend may tend to favor companies which have a foot in both the book and hardware sales camps. Considering the current number of devices which can be used to read Kindle books, it looks as if Amazon will be a major player in the future of digital publishing for some time to come.
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