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Allen Weiner
Research VP
7 years at Gartner
23 years IT industry

Allen Weiner shares insights on how to monetize digital marketing through commerce. His focus on “Commerce Everywhere” provides perspective on how social, mobile, search and emerging channels can be tapped to improve customer experiences and drive business results … Read Full Bio

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Amazon’s Aims for Immediate E-reader Supremacy

by Allen Weiner  |  September 28, 2011  |  5 Comments

While most observers obsess about the impact of Amazon’s new tablet and its impact on Apple’s iPad and other media tablets, the real story is much less about tablets and more about e-ink e-readers. With three new e-ink readers ($79, $99, $149), Amazon is looking to fire a double tap to the heads of Barnes and Noble, Kobo and Sony, its major competitors in that market. The newest Nook, a 7-inch beauty with e-ink’s Pearl technology has been coming on strong and is considered by consumers to be superior to Kindle 3 which is larger and has a physical keyboard. Amazon was not about to take such competition lightly.

Nor was Amazon about to let B&N take mindshare control in to so-called “reader tablet” market with its $249 Nook Color which features a version of Android as well as enhanced content from publishers and a variety of apps. At the same time, Amazon needed to face pending efforts in the color reader tablet space from Kobo and Sony—a lethargic but potentially dangerous competitor—in this arena.

Amazon’s frontal assault on its e-reader competitors is on price, undercutting the current market by about $40 for its new touch version and $60 for the new non-touch version. In addition, Amazon is offering a 3G model for $149 which is within $20 of its competitors’ WiFi only e-ink readers. As Gartner has predicted, the price point for e-ink readers would fall below $100 in time for the holiday shopping season. What remains to be seen is whether Amazon will be alone in that distinction or whether B&N, Kobo and Sony—whose new Pearl screen, WiFi device has yet to hit the market—will follow suit. The thinking is price cuts will be fairly dramatic market wide in Q4 along with perhaps some innovative campaigns which include product or service bundles.

This is not a straightforward Amazon vs. the market event; the dynamics are complicated. Amazon’s new lower-priced e-readers could thwart B&N’s efforts in non-U.S. markets. B&N only offers Nooks domestically but has talked about global distribution; Amazon’s ability to sell internationally a popular device at a low cost could keep B&N from becoming a global player. Such a move would challenge Kobo which has set up a number of intentional distribution agreements as well as put a major dent in any plans Sony—a global player—would have in this market.

The $199 Kindle Fire initially would attempt to undercut B&N’s Color Nook in price and functionality. The Fire would not only be ideal for enhanced books (books with audio and video) but also offer streaming media services, something the Nook Color does not offer. And while a 7-inch tablet is not an ideal screen size for newspaper and magazine publishers, Amazon might offer some ways to render such content better than the Nook Color and become an initial volley in a longer-term newspaper/magazine strategy which fully blossoms when Amazon releases a 10-inch tablet. Amazon will not have to make a big effort to be more newspaper and magazine friendly than Apple has been regarding in-app purchases and sharing consumer data.

Amazon’s double tap has the impact of targeting its e-reader competition today and the media tablet market as a magazine and newspaper device in short order. Holiday shoppers will have a cornucopia of digital media devices to select from this year. Amazon’s hope is it sits under more trees at home and abroad than any of its competitors.

5 Comments »

Category: Amazon Apple     Tags: , , , , ,

5 responses so far ↓

  • 1 Kindle Touch Looks Like a Winner at $99 | Got2.Me   September 28, 2011 at 6:18 pm

    [...] Of course, my Amazon-centric comparisons don’t take into account the upcoming moves by Amazon’s e-reading competitors, a key consideration that Gartner analyst Allen Weiner discusses in a Sept. 28 blog post: [...]

  • 2 Kindle Touch Looks Like a Winner at $99 : Tera Code – Portal Information Service   September 28, 2011 at 6:23 pm

    [...] Of course, my Amazon-centric comparisons don’t take into account the upcoming moves by Amazon‘s e-reading competitors, a key consideration that Gartner analyst Allen Weiner discusses in a Sept. 28 blog post: [...]

  • 3 Kindle Touch Looks Like a Winner at $99 | Kindle Sale 101   September 29, 2011 at 9:10 pm

    [...] that Gartner analyst Allen Weiner discusses in a Sept. 28 blog post:”As Gartner has predicted, the price [...]

  • 4 BLOG: Kindle Touch looks like a winner at US$99 | Kindle Sale 101   September 30, 2011 at 2:30 pm

    [...] that Gartner analyst Allen Weiner discusses in a Sept. 28 blog post: “As Gartner has predicted, the price [...]

  • 5 Thad McIlroy, The Future of Publishing   September 30, 2011 at 11:33 pm

    I agree completely that the e-Reader supremacy is far more important to Amazon than competing with Apple. But I think the supremacy that Amazon has its sights on is e-book supremacy, not e-reader. The e-reader is a transitional hardware device that, at some point, will be replaced by a device offering broader functionality. Amazon has done very well in hardware thusfar, but long-term cannot compete with PC and mobile phone vendors.

    But that won’t matter to Bezos as long as people see Amazon as THE place to buy ebooks, because it offers both the lowest prices and the broadest selection of digital and print books.