Lower E-Book Reader Prices Could See The E-Book Market Grow Faster

Amazon seemed to have found the perfect product in their Kindle reader. It was by far the market leader in the e-book reader arena, commanding a 60% share of all sales, and there was no real competition to speak of. Despite the release of competing e-book readers by other manufacturers such as Bookeen, Barnes and Noble and Sony, there was no credible competition and the Kindle's top position seemed to be unassailable.

Then Apple launched their iPad and, even if it is a totally different device, it took the wind out of Amazon's sails just a little. The iPad is not without some fairly major flaws of its own, and whilst most Apple devices seem to provoke a "love them or loathe them" response, the numbers of people who would buy almost anything with the Apple logo on it are certainly large enough to make a major dent in the sales of the Kindle.

As well as releasing new, sexy hardware, Apple also struck a deal with many of the major publishers which let them charge whatever they wanted for e-books – as long as they weren't offered for less on any other device – the Kindle in other words. This appeared to effectively wipe out the Amazon approach of offering e-books at $ 9.99 or less. It certainly seems as if the price of e-books has been creeping upwards since the launch of the iPad. It does seem a little strange that increased competition should drive prices upwards – but there you have it.

It's a different story with the actual e-book reader hardware however. Barnes and Noble have dropped the price of their Nook reader from $ 259 to $ 199. Amazon have now dropped the price of the Kindle 2.0 from $259 to $189 – a very low number considering that it retailed at $ 359 when it was launched in February of 2009. The price of the larger format Kindle DX has also been reduced from $ 489 to $ 379, an event which coincides with the device's first upgrade which includes a higher contrast screen and a new body color.

Even the top of the range Kindle DX is now more than $100 less than the entry model iPad. Neither is internet connection included in the iPad purchase price as it is for the Kindle range. Certainly the iPad is much more than just an e-book reader,people may very well be quite happy to pay more for a more versatile and powerful device - even if it does have a much shorter battery life.

It will be interesting to see whether this downward price movement of e-book readers is simply a temporary reaction to the iPad or whether it heralds the dawn of a new pricing policy. Perhaps companies like Barnes and Noble and Amazon might consider selling the reader hardware for less, safe in the knowledge that they will make their profits by selling e-books at a slightly higher average price throughout the lifetime of the device. Or it may simply be a stalling tactic until the next generation color Kindle hits the streets later this year.