E-books are becoming affordable these days. Consider Nook which dropped its price to $199 from $ 259. Next followed in the race was Amazon, which dropped the price of their 3G Kindle 2 to $189.00. On the whole, things are getting better on our part….and I hope the companies would add more customers accordingly.
The Amazon Kindle and the Barnes & Noble Nook have undergone a new pricing policy, also ending the age of unitasking Vizplex e-Ink devices for e-book reading. While the launch of the iPad almost positively was a foretelling of the end of the devoted eReader device, the actual extinction event started this week with Barnes & Noble’s introduction of a $149.00, Wi-Fi only Nook, as well as a significant price drop of the Wi-Fi/3G model to $199 from $259.00. This was followed by an immediate reprisal by Amazon, which also changed its pricing. This was a major price change as two and a half years ago, the original Kindle was selling for $399.00, and now its priced at $ 189.
However, the price war was prompted by Barnes & Noble because it had finally come to the comprehension that it was only going to be on an equal playing field with its violent competitor by effectively erasing the profit margins on device sales and focusing all off its efforts on its content store. This also effectively put all secondary competitors which make and distribute e-reader devices for the North American and European markets out of business or in an immediately unstable position, who most probably do not have the aptitude to absorb such huge price cuts due to differences in volume manufacturing costs. Companies such Spring Design, iRex, Bookeen, Kobo and Plastic Logic are some of them.
All of these companies e-reader devices will almost surely be gone within the next few months unless they undercut both the Nook and the Kindle on price and have better features and cheaper content, which will be tremendously difficult to do.Of all of these companies which compete with Amazon and B&N, SONY may be able to weather the storm, but even this is questionable as their mid-range touchscreen reader product which has no wireless connectivity at all is $200, and their Daily wireless edition is $300. SONY just doesn’t play in the inexpensive, commodity ballpark, and they may not be able to stomach added price cuts by Amazon and B&N as the dark and cold abyss of the margin floor approaches.
But regrettably, Amazon and Barnes & Noble will be incapable to sustain a business on the devices when it hits that low, because the price of the most important and expensive component of those Black & White e-ink readers, the Vizplex display, is controlled by a company that exclusively manufactures and owns the rights to the electrophoretic technology used in these devices, E Ink Corporation. So is this a long term plan…..or they have some much better plans in mind? But whatever, lets enjoy the pricing policy!
Tags: 3g, amazon kindle, e books, e reader, iPad, nook, nook vs kindle, profit margins