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.
For months, the rumor-mill suggested that Google would debut its own e-book service to blunt Amazon’s influence in the market. Termed Google Editions, said service was supposed to launch sometime this summer, in conjunction with partners such as the American Booksellers Association (ABA).
According to the plan, Google Editions would make some 400,000 e-books available to Web-enabled devices such as laptops, tablet PCs, and smartphones. Those volumes would be purchasable directly from Google, via the Google Checkout system. And whereas Amazon and its current rivals offer e-books in a proprietary format, the search engine giant’s own e-bookstore would theoretically offer more freedom over where and how its e-books could be read.
“I don’t think anyone who has bought an e-reader in the last several years has really intended to only buy their digital books from one provider for life,” Tom Turvey, Google Editions’ director for strategic partnerships, told The New York Times.
But the longer Google waits to roll out Google Editions (and the longer it neglects to provide details about how the service will work, in order to build the all-important buzz), the harder will be its eventual battle against Amazon, Barnes & Noble, and Apple, all of which have been moving aggressively to draw readers to their respective platforms. In that context, Google’s chances of breaking off a substantial portion of the e-book market appear dimmer and dimmer by the week.
On Aug. 11, the tech blog Slashgear posted a story about Sony “apparently looking to Android for its future e-reader plans,” based on a job posting in its Digital Reader Business Division.
The cached version of that job posting, “Senior Staff Software Engineer (Android)-Digital Reader Business Division” can be found here. Responsibilities, apparently, include “developing application software for digital reading and other consumer electronic devices.”
It’s no secret that Sony has fallen behind in the e-reader wars, especially when it comes to mindshare. In July, Sony mirrored its rivals’ price-cuts, dropping the cost of the Sony Reader Pocket Edition to $149, the new Daily Edition to $299, and the Touch Edition to $169. On top of that, Sony recently shined up the design of its Reader Store for e-books.
But if Sony plans to use Android as the operating system for its future e-readers, it could be tacit acknowledgment that none of its previous steps have been enough; through Android, Sony could conceivably add software features equivalent to those of the ever-more-advanced Kindle and Nook.
That would place Sony smack in the middle of what’s become an extraordinarily competitive space, locking jaws with not only Amazon, Barnes & Noble, and Apple, but also with the upcoming Android-based tablet PCs. If Sony were willing to spend millions of dollars to aggressively assert itself in that position, it could translate into a market-share advantage-but Sony seems reluctant to grow fangs in that regard, with anemic e-reader marketing and a follower’s mentality when it comes to pricing and features.
Unlike smaller e-reader manufacturers, though, Sony has millions of dollars to sustain its presence in a product category. That could ensure its placement as an e-reader also-ran-but leaping outright into the fray against its stronger competitors, without the corporate will or marketing push, could result in a costly mess.