Is The $99 E-Reader on The Horizon?

The e-book market came of age Tuesday when Amazon trumpeted some impressive news:The online retailer is now selling more Kindle titles than hardcover books. Over the past three months, in fact, Kindle e-books have outsold hardcovers 143 to 100, the company said.

Much of that surge is likely attributable to a recent price war in the e-reader market, in which Amazon lowered the Kindle's price from $259 to $189. The company says the growth rate of Kindle device sales tripled after the price cut. And what's the first thing you do after powering up your shiny new Kindle?Buy a few e-books, of course.

Cheaper Readers Coming

Let's take a quick look at Amazon's main competitors in the e-book market:Barnes & Noble, Borders, and Sony. (I'm excluding Apple for now because its iPad tablet isn't a direct competitor to dedicated e-readers with non-backlit displays.) Each of these three companies sells one or more e-readers, and also has an online bookstore with the unenviable position of competing with Amazon and Apple's iBookstore.

Amazon's competitors--particularly Borders, which just opened its online shop two weeks ago--need to make a big splash to draw customers. And what better way than to slash e-reader prices? The sub-$100 e-reader isn't far off, according to a 2009 study by Forrester ResearchThe question is:Which vendor will get there first?

Odds-On Favorites

Borders:The bookstore chain sells the Kobo eReader for $150. But Kobo, a start-up that's partially owned by Borders, has an e-reader that's a step below similarly priced devices from Amazon and Barnes & Noble. The Kobo device, for instance, doesn't include Wi-Fi, but Barnes & Noble's $150 Nook does.Would Borders discount the Kobo to boost its appeal? A $99 Kobo would certainly drive traffic to Borders' new eBooks store.

Barnes & Noble: This bookstore behemoth ignited last month's e-reader price war by launching a Wi-Fi- only version of its Nook e-reader for $149.It also lowered the price of the Wi-Fi/3G version to $199.B&N's management has made it clear that it's not afraid to slash e-reader prices to build its e-book business.

Sony:The electronics giant returned fire in last month's price war by reducing its trio of readers:The Reader Pocket Edition is now $150; the Touch Edition Reader is $170; and the Reader Daily Edition (with 3G service) is $300. Like Kobo, however, Sony's $150 e-reader lacks wireless capabilities and might benefit from yet another price cut.

The Big Wheels

Amazon:The $189 Kindle appears to be a hit, as does Amazon's e-bookstore. For those reasons, it's unlikely that Amazon would be first to break the $100 barrier.

Apple:Yeah, right.The iPad starts at $500 and is a huge success. Apple isn't going anywhere near the $99 e-reader market.

The Little Guys

Some industry observers would argue that the $99 (or less) e-reader is already here. After all, if your mobile phone can run an e-reader app (e.g., Kindle), you've already got a portable reader, right?

But are smartphones an ergonomic match for full-length books? Based on my experiences with the Droid X and the HTC EVO 4G--both of which have relatively large 4.3-inch displays--they're not. Too much eye strain after a short time. Smartphones may be fine for news stories and other brief articles, but they're too tiny for book-length works.

The $99 e-reader may also come out of left field from a little-known competitor. Many companies showed off e-reading devices at January's Consumer Electronics Show. Don't count the little guys out.

Contact Jeff Bertolucci via Twitter (@jbertolucci ) or at jbertolucci.blogspot.com .

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