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ebook Readers are Today’s Printers

Printer manufacturers have long since given up most of their profit margins on the actual printer hardware. Rather, they make most of their profit on the continuing sales of ink once the printers have been purchased. When ebooks were first introduced, they were relatively expensive. Both Sony's and Amazon's were over $300. Now there is a version of the Barnes and Noble Nook for $149 and a version of the Amazon Kindle for $139. At these price points, they're starting to make very little on the hardware itself, but hope to make longer term profits on the subsequent ebook sales. The major implication for the market is that dedicated ebook readers that don't have an integrated ebook distribution system are not going to fare well...

Printer manufacturers have long since given up most of their profit margins on the actual printer hardware. Rather, they make most of their profit on the continuing sales of ink once the printers have been purchased.

When ebooks were first introduced, they were relatively expensive. Both Sony’s and Amazon’s were over $300. Now there is a version of the Barnes and Noble Nook for $149 and a version of the Amazon Kindle for $139. At these price points, they’re starting to make very little on the hardware itself, but hope to make longer term profits on the subsequent ebook sales.

The major implication for the market is that dedicated ebook readers that don’t have an integrated ebook distribution system are not going to fare well. In fact, most of the ebook readers that were announced earlier this year have already folded. The only major player other than B&N or Amazon that is left is Sony and, unfortunately for them, they don’t have a (book) content distribution system that compares with the other two.

Of course, the wild card in the race is the iPad and other up-and-coming non-dedicated ebook readers. And a big wild card it is. Of course, neither Amazon nor B&N are hurt too much by the iPad because both have iPad apps that let their customers read their books on it, but it does damage their exclusivity and force more price competition on the books themselves.

The next twelve months should be interesting.

Domus, Inc. is an integrated digital and traditional marketing communications agency. For more information, please visit us at http://www.domusinc.com.

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