The move to $99 eReaders grows stronger

The $189 Kindle 3 and the $139 Kindle WiFi have galvanized eReader companies into action.

More and more of them are pricing their eReaders at the magic $99 mark. Two weeks ago we’d looked at a few eReaders discounted to $99 including the rather impressive Cybook Opus and the Sony 300 (at one solitary store – P. C. Richard & Son). The key distinction there was that these were all discounted eReaders.

Now we’re seeing a bunch of eReaders and pretend-eReaders arriving at $99 or planning to lower their price permanently to $99.

New Wave of $99 eReaders

Well, here’s what we have -

  1. The New Yorker talks about how Kobo is planning on reducing the price of its eReader to $99 by Christmas - 

    And its own e-reader’s simplicity and affordability (it will reportedly be down to ninety-nine dollars in time for Christmas)

  2. WSJ’s Digits Blog talks about the $99 Copia which has a 5″ color screen and is set to arrive this fall.  
  3. Augen’s ‘The Book’ eReader is being offered for $90.
  4. CVS is going to start selling a $100 Sylvania Netbook that some people are calling an eReader. It’s also selling something called the Sylvania LookBook eReader for $179.  
  5. Sony 300 has shown up at the $99 price a few more times (at various stores) since our last sighting.

It’s a motley bunch but what’s impressive is that these are not discounts or temporary price reductions (except the Sony 300) – These are eReaders tying the wedding knot with sub-$100 prices.

What impact will these $99 eReaders have?

The $99 eReaders impact eReaders in lots of ways -

  1. They put some pricing pressure on Kindle WiFi and Nook WiFi.
  2. They help create more buzz around eReaders and reading. People then investigate and find out about Kindle and Nook and Sony Reader.
  3. If they sell they help increase eInk screen sales and thus help create economies of scale.
  4. If they sell they lead to more eBook sales and accelerate the rise of eBooks.
  5. They help kill the Press’ delusional arguments that eReaders are dying out.

The most important impact of the $99 eReaders might be anchoring $99 in people’s minds. It’s anchoring in two ways – It opens people up to buying eReaders since $99 is a great price, it creates the expectation of $99 eReaders in people’s minds and forces the Big 3 eReader makers to match the price.

$99 eReaders will help push Kindle WiFi and Nook WiFi to $99

The $99 eReaders are going to be one amongst a number of factors that push Kindle WiFi and Nook WiFi to $99 by end 2010. Here are the other factors -

  1. Competition amongst the Big 3′s lower priced eReaders. Kindle WiFi vs Nook WiFi vs Sony 350 probably means we get top quality $99 eReaders by year end.
  2. Economies of Scale. The more Kindles and Nooks and Sony Readers sell the cheaper everything gets – the screen, the chips, everything. We also have talk of system on a chip designs and various other improvements.
  3. Christmas 2010 is vital. It’s vital for Nook and Sony Reader because they can’t afford to be missing in action two years in a row. It’s vital for Kindle because it can cement its position as the #1 eReader and the #1 ebook store.
  4. The entry of Google Editions makes it vital for Kindle 3 and Nook 2 to sell more units and lock-in users. 
  5. (Perhaps) Advances in technology such as touch (and perhaps even rough versions of color eInk) which force Kindle WiFi and Nook WiFi to compete on price.
  6. The iPad 2.
  7. Android Tablets that come in at $200 and lower. They will attack eReaders on value for money and force lower prices.  

There are just a lot of factors. We have the Kindle WiFi at $139 in August. There’s no easy way to conceive a situation where it’s not down to $100 by December 2010.

A little on Kobo

The New Yorker article is fascinating as it goes into a lot more than just the rumored $99 price.

First, we get a little on Kobo -

Lounging on a swanky rooftop patio the other day, dozens of beaming young people sipped complimentary cocktails and marveled about the nonstop hiring their company was doing …

They were all from the content side of the company, and I noted that everyone at their table was dressed like they might work in film or music.

Yup, that’s what you need to win the eReader Wars – swanky rooftop parties and LA style.

Next, we get a little bit of delusion -

Kobo is perhaps the scrappiest and most focussed player in the e-book war.

Really?

Then, a lot of delusion -

… has spawned a cult following. In Amazon’s rear-view mirror, Kobo is quickly gaining ground.

If you define ‘quickly gaining ground’ as – Looks outdated compared to Nook WiFi and positively ancient compared to Kindle WiFi.

Finally,  a ridiculous amount of delusion -

“What we’re doing is the first major change in publishing in hundreds of years,” Michael Serbinis told me.

“This is a monumental shift in how ideas and stories are spread,” he said. “This is an advance for humanity.”

The Kobo CEO is like Steve Jobs except without the hit products.

Sony started the whole eReader idea and Amazon executed on it. Kobo is a company that joined a few years late and that has perhaps 1% market share – It’s absurd for Kobo to be claiming credit for what’s going on with eReaders and eBooks.

Here’s a comment from the New Yorker (courtesy KW Newton) -

Is it just me or is there a whiff of incredible ego here?

What *Kobo* is doing is “the first major change in publishing in hundreds of years”?

That would be news to Sony, who were the first to market a readable, usable eReader, or to Amazon, who were the first to market one that didn’t require a computer, or to Barnes & Noble, who are playing catch-up but at least realize that ease of use is as important as the screen technology.

Well, back to the topic of $99 eReaders.

How soon will we see Kindle WiFi or Nook WiFi or Sony 350 at $99 and what will it mean?

My money is on us seeing one of the Big 3 selling a $99 eReader by October 2010. Mostly because – Companies will want to cash in on Thanksgiving and early gift buying, Nook 2 and Sony 350 prices are yet to be announced and they might cause price wars, waiting till December would be too late, this season is far too important.

By October 2010, one or more out of Kindle WiFi, Nook WiFi, and Sony 350 will be at $99.

What will the Big 3 hitting $99 mean?

Well, the $99 price point is huge psychologically – A lot more people start making impulse purchases, a lot more eReaders start being gifted, more people feel a device ‘that does nothing other than read’ is worthwhile since it’s just $99, more casual readers try it out.

There’s also enough separation between $99 eReaders and $200 Android Tablets and $300 iPad 2s and even iPhones and smartphones (since there’s no contract).

The increased sales create a vicious positive cycle since eInk/PVI can now make its eInk screens even cheaper and invest more into R&D. eReader companies get more revenue and sell more ebooks and that affects all of Publishing giving eReader companies more power and money and they put some/most/all of the money back into eReaders.

Kindle WiFi coming in at $139 has set the wheels in motion for an explosion in eReaders this Christmas season and a guaranteed great 2011. Every ‘eReaders are going to die’ article and every ‘Android devices are going to kill eReaders’ article seems more and more of a joke. There was some plausibility when we had hundreds of thousands of eReaders being sold per year. Now we have millions and eReaders have differentiated themselves from every device that was supposed to kill them.

It’s gotten so bad that the only ‘Kindle Killer’ the press is left with is some unreleased ‘Android Death Star Tablet’.  2010 went from The Year of the eReader to potentially The Year of the Death of the eReader with the iPad’s success and is now, thanks to the $139 Kindle WiFi, back to being The Year of the eReader.

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