por Victor VE » Lun Jun 21, 2010 5:36 pm
Amazon and Barnes & Noble Cut E-Reader Prices
A price war is brewing in the growing market for electronic reading devices.
Barnes & Noble, the national bookseller, announced Monday it was dropping the price of its six-month-old Nook e-reader to $199 from $259 and introducing a new version of the device, which connects to the Internet only over Wi-Fi networks, for $149.
Responding rapidly, rival Amazon.com then cut the price of its popular Kindle e-reader below the Nook, to $189 from $259.
The price cuts were made as manufacturers of e-readers face a growing threat from Apple’s iPad. Even though it is far more expensive than the e-readers, the iPad, which starts at $500, performs a range of functions with a versatile, colorful display that contrasts sharply with the static, monochrome screen of e-book readers. Apple has said it has sold over 2 million iPads in the two months since the tablet’s introduction.
“It was obvious that the price of standalone e-readers had to come down,” said James McQuivey, an analyst at Forrester Research, citing the threat by Apple and other tablet makers. “We just never thought it was going to happen this rapidly.”
Analysts had expected the prices of e-readers would gradually fall because of the natural decline in component costs and the increased profitability of e-books themselves.
Until this spring, e-book sellers like Amazon and Barnes & Noble sold many bestselling e-books at a loss, in order to entice customers. But then five of the six major American publishers agreed with Apple to change to a so-called “agency” sales model. Under the new agreement, booksellers were required to raise prices on many digital books and got to keep a 30 percent commission on the sales, which now allows them to sacrifice some profit on their hardware.
The price cuts should add further momentum to what, despite incursions by the iPad, has been a growing market for dedicated e-reading devices. Amazon and rivals are on pace to sell 6.6 million e-reading devices this year, up from 3.1 million in 2009, according to Forrester.
But even as the market grows, several smaller players have encountered problems. iRex Technologies, based in the Netherlands, recently sought protection from creditors in Dutch bankruptcy court, citing problems with its division in the United States. Earlier this month, the Skiff e-reading platform, developed by Hearst, was acquired by News Corp., casting doubts about the planned introduction of a Skiff reading device.
“I don’t see more than two, or maybe three dedicated reading companies in the market for selling e-books,” said William J. Lynch, chief executive of Barnes & Noble, in an interview. “I think you are starting to see a shakeout now.”
Mr. Lynch also predicted that within 12 months, e-reading devices “that people will actually want to buy” could be available for under $100.