Retailers Race to the Bottom on E-Reader Prices
Busy days in the e-reader universe. Apple announced it has
sold three million iPads (not strictly an e-reader) in the first 80 days the
product was on the market. Both Amazon and Barnes & Noble have lowered
prices on their electronic devices and Borders is throwing in a gift card with
every purchase of its Kobo e-reader.
"It was obvious that the price of stand-alone e-readers had to come
McQuivey, an analyst at Forrester Research, told The New York Times. "We
just never thought it was going to happen this rapidly."
Conversations RetailWire has
had around these announcements have been of the glass half-full and half-empty
The position of those positive about the developments suggest that
lower prices will democratize the e-reader universe and bring more of the public
into the market. The real money, they say, is not in the sale of the devices
but the e-books that follow.
Those with a more negative take say all the price
cutting in the wake of iPad’s impressive beginning is a sign that most of the
e-readers on the market are ready to go the way of the dodo bird.
writing the Tech Broiler blog on ZDNet, points out that
Amazon’s Kindle started out selling for $399 a few years back. By Mr. Perlow’s
estimate, retailers may still be making money at the new lower prices (he puts
manufacturing costs at between $90 and $125 per device), but just how low will
they be willing to go?
William Lynch, chief executive of Barnes & Noble,
told the Times that
he can see e-readers going for under $100 within a year. "I don’t
see more than two, or maybe three dedicated reading companies in the market
for selling e-books. I think you are starting to see a shake-out now."
Discussion Questions: Is the e-reader market ready for a shakeout? What do
you see as the future of the market?
- Borders Adds $20 Card to E-Reader as Rivals Cut Price – Bloomberg News
- Kindle, Nook and Vizplex eReader devices face mass extinction – ZDNET
- In Price War, E-Readers Go Below $200 – The New York Times