Juice Report

Since its launch in November 2007, the Kindle electronic book reader has been a great product for Amazon. Amazon’s strong association with both books and electronics was a marriage made in heaven and the Kindle, after an upgrade to Kindle 2.0 in February of 2009 followed by the introduction of the large display Kindle DX model in the summer of the same year, went on to become Amazon’s top selling product.

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, the method in Amazon’s madness became clear after the release of the Apple iPad. This saw the price of e-book readers fall as many consumers rushed to buy Apple’s new device which, amongst its many functions, was suitable for use as an e-book reader. However, at the same time as e-book reader prices were falling, the average price of the e-books to read on them was creeping ever 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.

Check out the Amazon Kindle for yourself and view the wide range of Kindle accessories available to help you personalise your reader.