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Sunday, August 15, 2010

Kindle Takes Charge

Originally written for eBookGuru - The Digital Magazine Devoted to eBooks

Amazon recently announced two new Kindles slated for release at the end of August. While the Kindle seems to hold the edge in eReader sales it is definitely not standing still.

The new model comes in two flavors, which I’ve dubbed regular and lite. Both models are thinner and lighter than the Kindle 2, although still heavier than the Kobo. The devices have sharper contrast and faster page turns, making it easier to read on them. The device is also quieter, with the button clicks being tamped down.

The regular version comes with Wi-Fi and Amazon’s WhisperNet and the lite version forsakes WhisperNet as it only comes with Wi-Fi. The regular version is priced at $189 - the same price as the Kindle 2. The lite version is priced at $139, $10 lower than the Wi-Fi Nook, the Kobo or the Sony Pocket Edition. The makes the Kindle the lowest price eReader currently available.

An article in Wired Magazine (Amazon Strikes Back at the iPad With New, $140 Kindle) talks about the strategy behind the $139 price point.

…Bezos anticipates millions of new customers who can live with waiting for a Wi-Fi hot spot to replenish their content. He says that the introduction of the Wi-Fi version is purely a price play, a way to sell Kindles to families and couples who already have one in the house.

“At $139, you’re going to have multiple Kindles, not just one,” Bezos says.

More interesting to note is a comment by James McQuivey, a Forrester Research analyst who

…expects the new low Kindle price will “shatter the bottom” of the e-reader market.

“Anything that doesn’t have any kind of connectivity, like the Sony Pocket Reader, has to drop to $99 by the end of the year,” he says. “Why would you buy that non-wireless device if you have the choice for the same or less money to buy a Wi-Fi-enabled Kindle?”

Why indeed? Even I’m tempted and as regular readers know I’m not a big fan of Amazon’s proprietary book format.

The loss of the Cool-er eReader was just the first of many casualties in the eReader wars. Foxit (the PDF company) recently announced that it was killing off it’s eSlick eReader, a device I’ve heard little about.

New entrants, like the iRiver Story and the Copia family of eReaders face an uphill battle and will either need to compete aggressively on pricing or introduce new features in order to succeed. The trick with new features is to keep the price point low enough to keep potential buyers from jumping to an iPad instead and it remains to be seen if anyone can pull it off.

As I stated in The $50 eReader, iPad competitors will force the price of the iPad down, as well as making tablets more affordable. This in turns puts pressure on eReaders and the only way to compete will be price. Amazon has an advantage in this type of market since only Amazon sells Kindle books. Therefore they can afford to discount the eReader, knowing that they will eventually make up the different in eBooks. Add in WhisperNet and Wi-Fi plus all the Kindle Books already available and this is a tough combination to beat.

At least the Nook is trying. In September Barnes and Noble will

…begin an aggressive promotion of its Nook e-readers by building 1,000-square-foot boutiques in all of its stores, with sample Nooks, demonstration tables, video screens and employees who will give customers advice and operating instructions.

Obviously B&N is hoping that the hands on approach will entice more readers to buy the Nook once they’ve tried it for themselves.

This is better than the approach taken by Sony, which

…refuses to get caught up in a price war with Kindle, intends to compete on quality.

It has also been remarkably quiet on the Kobo front and it will be interesting to see how the newest entrant to the eReader and eBook market reacts to the new Kindles and their aggressive pricing.

In the meantime I’m still holding out for that elusive $99 eReader.

posted by David at 1:01 am  

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