As e-reader market explodes, cost of the devices get slashed

Posted by Knowlton Thomas

It's like the Sony's business model on the PS3: sell the console to break-even, or even suffer a loss, and profit off the games. Because what's a device without its constant flow of new content? They will always come back for more.

This is likely the thinking behind book giants Amazon and Barnes & Noble, who slashed the costs of their e-readers on Monday. Barnes cut the Nook's price tag from $259 to $199, while Amazon swiftly responded, bringing its Kindle down from $259 to $189 later that day. E-books are selling better than the companies anticipated, which allows for the aforementioned business model to be executed. That, and rising competition is driving price points down.

James McQuivey, an analyst at Forrester Research, offered his own analogy. "They can go to the old razor-world model of giving away the razor for free and selling the blades," he said. "They are starting to give away the e-reader." The expert expects certain e-reader models to hit $99 by year's end, and many agree with his prediction.

Company:
Amazon
Website:
http://www.amazon.com
Location:
Vancouver, British Columbia, Canada

Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth's Biggest Selection. Amazon.com, Inc., seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of... more


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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys playing tennis, hiking, and exploring weird side streets. more




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