Amazon, using their Kindle reader family as a vehicle, has been a major player in the development of both the e-book reader and e-book market. The first Kindle was released in November of 2007. In February of 2009, the updated and enhanced Kindle 2.0 hit the market, quickly followed by the large format Kindle DX in the summer of the same year.
The Kindle readers dominated the market and took a 60% share of all 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.
Companies such as Barnes and Noble, Sony, iRex, Bookeen and Plastic Logic did their best to secure a share of the new and rapidly expanding electronic book market, but the dominat position of the Kindle seemed to be virtually unassailable. It was only when Apple released its long awaited iPad that the Kindle first had any real competition – despite the fact that the two devices are very different.
Following the launch of the iPad, the prices of e-book readers have been significantly reduced. The Kindle 2.0 is currently on sale for just $ 189, a significant reduction over the February 2009 launch price of $ 359. 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. The price of the Nook reader, from Barnes and Noble, has also been cut from $ 259 to $ 199.
Although the iPad seems to have provoked a round of price cuts among the manufacturers of e-book readers, 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 for a lower price on any other platform. This was a welcome development for the publishers, who had been unhappy with Amazon’s policy of selling all e-books for $ 9.99 or less.
Amazon may have had to abandon their e-book pricing policy – but it’s hardly a disaster for them, or for Barnes and Noble. Amazon has always seemed to be much more interested in the sale of books, including e-books, than the sale of hardware. That’s the only feasible explanation as to why they have bent over backwards in order to make it possible to read Kindle books on such a wide selection of different devices. Currently, you can read Kindle books on the PC, the Mac, the iPod Touch, the iPhone, the iPad, the Blackberry and any mobile device which runs Android. So companies like Amazon, Barnes and Noble and now Apple, who have an interest in the future sale of e-books over the life of a reader, can afford to sell the hardware cheaper and make their profits over the life of the reader.
Companies who sell both books and hardware may enjoy a significant advantage over straight hardware manufacturers in future. Looking at the number of different devices which Kindle books can be read on, you would have to suspect that, whether or not the iPad becomes the reader of choice for many users, Amazon will continue to have a huge say in the future of books and e-books for the foreseeable future.