The Price War for E-readers Heats Up

By Tracey E. Schelmetic September 02, 2010

Just in time for the winding up holiday season, the retail battles have begun. Desperate for a bigger share of consumer’s very trimmed down holiday shopping budgets, retailers will be pulling some surprises out of their sleeves in the coming months. E-readers, the digital devices used to read digital e-books, will be no exception.

Staples announced today that it will begin selling Amazon’s Kindle e-reader at its more than 1,500 U.S. stores. It plans to sell the 3G Kindle DX at about $139. Target announced plans earlier in the year to carry at least one Kindle model, and bookstore giant Borders has been selling e-readers (though not its own) for some time. Big box retailer Best Buy began serving the e-reader market this year by selling Barnes & Noble’s Nook e-reader, a competitor to Kindle.

In addition to Kindle versus Nook, other players have stepped up their efforts in the e-reader market, perhaps to prepare for battle with not only each other, but Apple and its iPad device, which can also act as an e-reader.

This week, Sony announced that it is updating its Pocket e-reader and making it a touch screen: the device now has an infrared sensor to read finger swipes or taps from an included stylus, eliminating the need for the special touch-sensitive overlay that users complained reduced clarity. Sony also boosted the screen graphics and added memory to the device, which will sell for $179.

It’s no surprise that we’re seeing a price war on e-readers, given the flurry of activity in the market. In July, the three major players: Barnes & Noble, Amazon and Sony began aggressively cutting prices on their respective devices. Borders also chimed in this week and said that it had plans to lower the price of two e-readers it sells. According to the Wall Street Journal, Borders plans to slash prices of the Kobo and the Aluratek Libre e-reader by $20, in a bid to better compete against the Kindle and the Nook. The Aluratek model is expected to retail at Borders for $99. Borders also plans to begin selling two higher-priced, full-color e-readers in the coming weeks: the $199 Cruz Reader and the $299 Cruz Tablet. Both units offer users the ability to surf the Web and play multimedia files.  

The drop in price on e-readers (which of course makes the profit margin thinner) is seen as necessary to encourage adoption. The sellers of e-readers no doubt plan to recoup the profits lost by the lower prices by ratcheting up their sales of e-books.

Tracey Schelmetic is a contributing editor for TechZone360. To read more of Tracey's articles, please visit her columnist page.

Edited by Beecher Tuttle

TechZone360 Contributor

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