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Are E-Book Sales More Important To Amazon Than Kindle Sales?

July 12th, 2010

Amazon, using their Kindle reader family as a vehicle, has been a major player in the development of both the e-book reader and e-book market. The first Kindle was released in November of 2007. In February of 2009, the updated and enhanced Kindle 2.0 hit the market, quickly followed by the large format Kindle DX in the summer of the same year.

The Kindle readers dominated the market with a 60% share of all American e-book reader sales. Sony's PRS reader - which was actually available in 2006, some time before the Kindle - followed in second place with a 35% market share. Other companies quickly saw the huge potential of the rapidly developing e-book reader market and either launched or updated their own readers in order to get a share of the available sales.

Companies such as Sony, Barnes and Noble, Bookeen, Plastic Logic and iRex did their best to get their share of the new and fast developing e-book market, but the Kindle's dominance looked to be pretty much unassailable. It wasn't until the launch of the Apple iPad that the Kindle had any credible competition - even although the two devices were very different and would appeal, you would imagine, to different audiences.

Differences in the devices and their intended applications notwithstanding, e-book reader prices have tumbled since the launch of the iPad. You can now pick up the Kindle 2.0 for just $ 189 - a huge reduction over the launch price of $ 359 - and a significant drop from the pre-iPad price of $ 259. The newly upgraded Kindle DX can be yours for just $ 379, down from $ 489. Barnes and Noble's Nook reader is now on sale at just $ 199.

Although the iPad seems to have provoked a round of price cuts among the manufacturers of e-books, the same cannot be said about the price of the e-books to read on these devices. Prior to the launch of the iPad, Apple had negotiated a deal with the major publishing houses which let them set the price of their e-book editions at pretty much whatever they wanted - as long as they did not allow the same e-book to be offered cheaper on any other platform. This was seen as good news by the publishers, who had been unhappy with Amazon's policy of selling all e-books for $ 9.99 or less.

Amazon may have had to abandon their low e-book price policy - but that wasn't necessarily a disaster for them. Considering the way that Amazon have made it possible to read Kindle books on such a wide variety of different devices - you can use the PC, the Mac, the iPod Touch, the iPhone, the iPad, your Blackberry and any device which runs Android to read Kindle books right now (and no doubt there will be further additions in future) - it must be obvious that Amazon are more interested in book sales than hardware sales. The latest downward price movement for e-book readers and simultaneous price increase for e-books means that they can now sell the hardware for less and make their profit by selling e-books over the life of the hardware. The same will apply for Barnes and Noble and Apple themselves of course.

This trend may tend to favor companies which have a foot in both the book and hardware sales camps. Considering the current number of devices which can be used to read Kindle books, it looks as if Amazon will be a major player in the future of digital publishing for some time to come.

Learn more about the Amazon Kindle for yourself and view the wide range of Kindle accessories available to help you personalise and protect your reader.