Attrition in the eBook Ranks!

It’s been an interesting week in ebook-land. We’ve seen the opening shots of a price war, and the beginnings of what may prove to be many players dropping from the ebook market. It’s an exciting time to be an ebook fan, so read on for more details and exciting news!

First, in case you missed it earlier this week, B&N attempted to gain the upper hand in the ebook world with a twofold strategy. First, they announced a WiFi-only nook for $149, effectively out doing Borders Kobo Reader, and then they dropped the price of the famous original nook to $199. Within hours analysts and bloggers were pontificating on how Amazon would respond. Jeff Bezos and company didn’t leave anyone hanging for long, responding in the afternoon of the same day and dropping the Kindle to $189!

Yes, Amazon dropped the price of the Kindle by $10 more than B&N. Not only does it give them better bragging rights, but it also proves an alpha-dog style point. Amazon has deeper pockets and better profit margins than B&N, and can keep this up for a lot longer. If B&N cuts their prices to $149, Amazon will drop to $139. And eventually, the point will come (if it hasn’t already) where B&N simply can’t afford to drop their prices any further. The most amusing part in all of this is that the publishers can thank themselves for this price war. If they hadn’t demanded Amazon stop undercutting prices and forced the agency model on them, Amazon wouldn’t be making a profit on each and every agency book they sell. Effectively, the publishers forcing Amazon and B&N to turn a profit is allowing them to cut prices!

But all this is coming at a price for other manufacturers. The Digital Reader is reporting the best Borders could squeeze out as a response to the price gyrations was to offer up a $20 Borders gift card along with the purchase of a Kobo Reader. It’s a good deal, but that’s probably the best the cash-poor Borders can do, and it’s unlikely we’ll see a further drop unless the device is a huge success or they find another investor with deep pockets.

Sony has been basically silent on these price wars, and that makes me seriously raise an eyebrow about their future plans in this market. Their lineup still sits at $199 for the non-wireless touch edition, $169 for the pocket edition and a whopping $399 for the daily edition. Sony is either delusional or doesn’t care about the ebook market, and either way it doesn’t bode well for their future lineup.

And Plastic Logic is starting to look awfully vaporware-like. Engadget reported that the Que reader has been postponed indefinitely and pre-orders have been canceled. This is the second major delay for the Que, and if prices don’t change it’s likely to be the death knell. As great as it sounds, there’s very little room in the market for a large screened device that costs more than the iPad, with little content and developer support behind it. It’s the same reason I believe Spring Design’s Alex is going to fade into oblivion as well. We haven’t heard a thing about their Borders partnership since CES, and there has not been a single press release from the company since mid-April. In a world where the iPad starts at $499, and the nook and Kindle clock in below $200, does the Alex offer enough differentiation to be worth $399? My prediction is no, but we’ll see…

So what is the evolution of books from here? Even with triple-digit growth ebooks are still a small portion of book sales. But there’s a problem: that triple-digit growth is coming from dedicated book readers, the people who bought books by the stacks. Slowly they’re turning to nooks and Kindles and iPads, which means they aren’t buying their books from stores. Teleread has a great editorial about how ebooks have changed one person’s experience with bookstores, making them less interesting to browse than they once were.

I’ve had a similar experience, though I still love spending an afternoon or evening browsing and people watching. Instead of buying a stack of books as head out the door, though, I’m usually leaving with a list of books to download to my Kindle later. The only time I really buy physical books anymore is when it’s a bargain (remaindered) book. Sometimes I feel guilty about this, but the truth is I enjoy reading on my Kindle more, and I love being able to hit a few buttons and swap books on the fly. It does make me wonder, though, if the day will come when I’ll turn down a visit to a bookstore because it won’t interest me anymore…

Of course, there’s some serious good that ebooks are bringing to the world as well. JKontheRun reported this week about an organization called WorldReader that successfully tested using Kindles in classrooms in Ghana. While Kindles haven’t done well in education in the USA, it’s great to see they’re being used effectively to promote literacy worldwide!

That’s the big ebook news for the week! What’s on your summer reading list? And will you be taking a Kindle or an iPad with you on vacation? Share your thoughts below!