The Amazon Kindle reader has been an important factor in the growth of the e-book reader and e-book market. The original Kindle was released in November of 2007. The Kindle 2.0 was released in February of 2009 and the large display Kindle DX model followed in the summer of the same year.
The Kindle readers dominated the market with a 60% share of all American e-book reader sales. Sony’s PRS reader – which was actually available in 2006, some time before the Kindle – followed in second place with a 35% market share. Other companies quickly saw the huge potential of the rapidly developing e-book reader market and either launched or updated their own readers in order to get a share of the available sales.
Manufacturers like Bookeen, Plastic Logic, Sony and Barnes and Noble worked hard to get their share of the rapidly developing market. However, the dominance of the Kindle seemed pretty well established, if not unassailable. It was only with the release of the Apple iPad that the Kindle faced any serious competition – despite the fact that the two devices were very different and were, you might imagine, aimed at different market segments.
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.
Whilst the price of e-book readers may be falling, the same cannot be said about the price of the e-books which these devices are used to read. Once again, Apple played a key role in this. Prior to the launch of the iPad, Apple had established their own book store and agreed a pricing deal with the major publishers which basically allowed them to set the price of their e-book editions at whatever level they wanted. The only caveat being that they could not offer the same e-book version at a lower price for any other reader. This effectively killed off Amazon’s plan of pricing e-books at $ 9.99 or lower and was very popular amongst the publishing companies.
Amazon may have had to abandon their policy of pricing e-books low – but that wasn’t necessarily a catastrophe for them. Considering the way that Amazon have made it possible to read Kindle books on such a wide range of different devices, it seems obvious that Amazon are more interested in book sales than Kindle sales. Currently you can use the PC, the Mac, the iPod Touch, the iPhone, the iPad, your Blackberry and any device which uses Android to read Kindle books (and no doubt there will be more free Kindle apps in future). This downward price trend for e-book reader hardware and simultaneous price increase for e-books means that Amazon can now market the Kindle reader hardware at a lower price and still turn a profit by selling e-books throughout the life of the hardware. The same will apply for Barnes and Noble and Apple themselves of course.
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.