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. Originally 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 and 3G.
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.