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The Kindle reader has been a fantastic product for Amazon since it was first released in November of 2007. Amazon’s strong association with both electronics and books made the Kindle the ideal product for them and, after an upgrade to the Kindle 2.0 in February of 2009, followed by the launch of the large format DX model in the summer of the same year, it went on to become the number one selling product on the Amazon site.

Over the festive period of 2009, the Kindle became Amazon’s most gifted product ever. On Christmas day of 2009, Amazon sold more Kindle books than physical volumes for the first time ever. Admittedly this was probably due to people who had received a Kindle as a Christmas gift testing it out by downloading a Kindle book or two – but it was a landmark event for Amazon and the Kindle nonetheless.

However, there were times when it seemed as if Amazon was a somewhat reluctant manufacturer. They went out of their way to make sure that Kindle books could be read – even without a Kindle reader. Currently, Amazon has released Kindle “Apps” for a huge number of alternative devices. These include the PC, the Mac, the iPod Touch, the iPhone, the new iPad, the Blackberry and any device which runs Android. On the face of it, Amazon seemed to be their own main competition.

However, with the release of the Apple iPad, the method in Amazon’s apparent madness became clear. The launch of the iPad produced a downward trend in the prices of e-book readers as Apple fans rushed to get their hands on the new iPad. On the other hand, e-book prices started to edge upwards.

Prior to the release of the iPad, Apple had negotiated a deal with the major publishing houses which allowed them to set the price of the e-book editions of their publications at pretty much whatever level they liked. The only rider was that the same e-book could not be offered at a lower price for any other reader – Amazon’s Kindle for example. Up until that point it had been Amazon’s policy to price e-books at $9.99 or less. Apple’s deal, much to the delight of the publishers, pretty much blew that out of the water. At first glance, Amazon looked to have been hit pretty hard by the release of the iPad.

However, a more detailed analysis of the situation shows that Amazon’s decision to release Kindle apps for just about every major device going was a stroke of genius on their part. Each App acts as an additional outlet for the sale of Kindle books – and given that e-book prices are rising, Amazon can afford to sell their Kindle hardware at a lower price secure in the knowledge that they will make a profit by selling Kindle books over the lifetime of the reader. If the iPad were to totally decimate the Kindle sales figures – an improbable scenario – Kindle books would continue to sell. No doubt, if another tablet computer or super duper reader launched tomorrow there would be “an App for that” within a couple of weeks. Amazon seem to know what they’re doing after all.

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

The Amazon Kindle reader seemed to be the ideal product for Amazon. It totally dominated the e-book reader market, accounting for 60% of all e-book reader sales, and it was hard to see where the competition was coming from. There were many predictions of a “Kindle killer”, but despite the release of new readers by the likes of Sony, Barnes and Noble, Plastic Logic and Bookeen, the Kindle looked set to maintain its number one position.

The release of Apple’s iPad did look like it would put a bit of a damper on things for Amazon. Even although it is an entirely different type of gadget, the very fact that it could be used to read e-books was enough to convince many that it sounded the death knell for the Kindle. As pointed out by many industry watchers, whilst not without flaws of its own, the iPad was so eagerly snapped up by Apple adherents that it could hardly fail to have some impact on Kindle sales figures.

As well as releasing new, sexy hardware, Apple also struck a deal with many of the major publishers which let them charge whatever they wanted for e-books – as long as they weren’t offered for less on any other device – the Kindle in other words. This looked set to put a bit of a spanner in the works of Amazon’s policy of providing e-books for $ 9.99 or less. It certainly seems as if the price of e-books has been creeping upwards since the launch of the iPad. It does seem a little strange that increased competition should drive prices upwards – but there you have it.

It’s a different story with the actual e-book reader hardware however. Barnes and Noble have dropped the price of their Nook reader from $ 259 to $ 199. Amazon have now dropped the price of the Kindle 2.0 from $259 to $189 – a very low number considering that it retailed at $ 359 when it was launched in February of 2009. The price of the larger format Kindle DX has also been reduced from $ 489 to $ 379, an event which coincides with the device’s first upgrade which includes a higher contrast screen and a new body color.

Even the pricey DX model is now over $ 100 cheaper than the cheapest of the Apple iPad range. Neither does the iPad come with connection to the internet for free as is the case for the Kindle range. Of course, the iPad is much more than an e-book reader, so it may be that people are prepared to pay more for a more powerful and versatile device – even if it does have much poorer battery life and a less “reading friendly” screen (which excels for other applications).

Time will tell whether or not this downward price trend for e-book readers is no more than a knee-jerk reaction to the appearance of the iPad or whether it is the beginning of a new pricing policy. It may be that companies such as Barnes and Noble and Amazon could use the upward trend in e-book prices to offset lower hardware ticket prices and make their profit on the sale of e-books over the lifetime of the device. In Amazon’s case, it may be no more than a holding tactic until the next generation Kindle, complete with color screen, hits the market later this year.

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

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