A well-timed endorsement from Oprah Winfrey made the Kindle e-reader one of last year’s hottest holiday items, but this year, Amazon’s electronic reading device may face a lot more competition.
Several companies, including Sony, Asus, iRex and publishing giant Hearst are rolling out competitive products, each offering a new way to consume old content.
Potentially waiting in the wings are devices from Apple, which is rumored to be adding the functionality to its widely anticipated tablet, and Time Inc., which could unveil its own e-reader before the end of the year.
It’s a classic technology land grab, with manufacturers scrambling to stake a claim.
Even non-literary retailers are getting involved. Best Buy last week announced plans to sell a new device from iRex Technologies allowing owners to use Verizon’s 3G network to download books from Barnes & Noble’s e-bookstore.
It’s easy to understand why. e-readers could do for the written word what the iPod did for music, making it possible for consumers to carry an entire bookshelf with them, instead of one well-chosen volume.
E-readers free book buyers from the need to visit physical newsstands and bookstores, too, since they can buy books and periodicals directly through their devices. Publishers get a new way to engage their audience. And, since each e-reader uses a different format, retailers can lock in customer loyalty, ensuring fatter profits down the road.
Betting on the future, though, appears to be costing companies in the present. Amazon, Sony and Barnes & Noble, which all charge users of e-readers roughly $10 for bestsellers, are selling titles for less than they have to pay the publisher per copy, according to publishing industry sources.
“Certainly, Amazon, Sony and Barnes & Noble are pricing at a low point now in hopes that they can command market share,” says Gwenyth Jones, vice president of digital publishing at Wiley. “I think a lot of them are hoping to make that margin back on their device sales.”
The Kindle has the most public awareness among e-readers, but Amazon has yet not issued Kindle sales numbers, even to its publishing partners. CEO Jeff Bezos did say in a note to shareholders earlier this year that sales so far “have exceeded our most optimistic expectations,” but since they’re not saying what those expectations were, the Kindle’s success remains hard to gauge.
Sony, in an effort to differentiate its e-reader line, is offering titles beyond those in its own
e-bookstore, partnering with Google to offer more than 1 million free public domain books. And in December, its $399 Reader Daily Edition will allow owners to “check out” e-books and digital content for a limited time from their local library.
Not surprisingly, every manufacturer is trying to make its product stand apart from the Kindle. IRex has partnered with Barnes & Noble over Amazon. And Asus is working on a pair of products, one of which will feature two screens and offer color, to better re-create the traditional book experience.
The reader wars haven’t turned into much of a price war, though — at least, not yet. The cheapest Kindle runs $299. Sony’s low-end unit runs $199. Asus is reportedly targeting a lower price than that. But the sweet spot remains $99 and below, which isn’t likely to be hit soon.
“Everyone is banking on the fact that there will be a shift to these devices,” Jones says. “I think the perfect device has yet to be developed.”