Amazon's Kindle, Barnes & Noble's Nook and the Apple iPad are engaged in a three-way war for the e-reader market. But that conflict's casualties could end up being smaller e-reader companies, Google Editions and Sony's e-reader franchise.
With April's release of the Apple iPad, along with the recent software and
hardware upgrades for both Amazon.com's Kindle and Barnes & Noble's Nook,
the battle for the e-reader market is well and truly joined. Each of those
three companies seems equally determined to match the others on a number of
competitive fronts, from bookstore size to device features.
Competition, of course, leads to casualties. "I don't see more than two
or maybe three dedicated reading companies in the market for selling e-books,"
William J. Lynch, chief executive of Barnes & Noble, told The New York Times in June
. "I think you are
starting to see a shake-out now."
In that spirit, here's a look at three entities that could soon be squeezed
out of the e-reader market:
Smaller E-Reader Companies
On Aug. 10, Plastic
Logic announced the death of its high-end e-reader, the Que
intended as a device for business travelers and other highly mobile
professionals, with an ability to download and display documents in a variety
of formats, the Que found itself technologically outpaced even before its
release. While Plastic Logic executives had originally touted the Que's unique ability
to add comments, highlight text, and search through files, recent software
updates from Barnes & Noble and Amazon offered comparable functionality for
their respective e-readers.
With that in mind, it was difficult for Plastic Logic to justify the Que's
considerable expense: $649 for the 4GB Que; $799 for the 8GB version with WiFi
But with Amazon and Barnes & Noble both lowering the prices of the
Kindle and Nook, other e-reader manufacturers could soon find their offerings
in the proverbial cross-hairs.
"E-book readers from Barnes & Noble as well as Amazon now are
priced at about the break-even level with their Bill of Materials,"
William Kidd, director of research firm iSuppli, wrote in a June statement
following price-drops for both the Kindle and Nook. "With zero profits on
their hardware, both these companies now hope to make their money in this
market through sale of e-books."
But Amazon and Barnes & Noble can also leverage their existing
infrastructures-not to mention their marketing millions-to create the brand
awareness necessary to sell millions of e-books and e-readers through their own
digital storefronts. Smaller e-reader manufacturers lack those resources; and
that, combined with the pressure to drop their devices' price-tags to
margin-killing levels, will drive many out of business.