One thing is for certain about the upcoming Amazon event on September 6, 2012 – prices will be dropped. Maybe not on all devices, but the company will want to keep pushing that price advantage. There are millions to be made in the e-reader market.
The announcement all but confirms that Amazon will debut new tablet devices next week, with its founder and CEO Jeff Bezos noting that the company will “offer our customers the best hardware, the best prices, the best customer service, the best cross-platform interoperability, and the best content ecosystem.”
With a new tablet coming out and lower prices, I expect Amazon to change the game (again). But, we’ll have to wait until next to week to see what that means.
Microsoft and Barnes & Noble have teamed up to compete against Apple and Amazon in the eBooks business. The new partnership sees Microsoft investing $300 million in a new Barnes & Noble subsidiary.
The $300 million investment in the Nook subsidiary of Barnes & Noble gives Microsoft about 17.6 percent ownership of this business unit. That values this part of the business at about $1.7 billion. Before the markets opened this morning, the Nook business was valued about $900 million more than Barnes & Noble itself.
In addition, Microsoft is paying another $305 million to get Nook on Windows 8 with some content:
Microsoft will be paying the Barnes & Noble subsidiary $180 million for revenue sharing on the Nook app that B&N will make for the Windows 8 platform. This is nonrefundable, the filing notes. Microsoft is also paying $125 million (equal to $25 million over five years) “for purposes of assisting NewCo in acquiring local digital reading content and technology development.” This, too, looks to be nonrefundable.
To put that in perspective, in the last quarter Barnes and Noble made $52 million in profit (on $2.4 billion in sales), and Amazon pulled in $130 million in profit (on $13 billion in sales). Clearly, Amazon has a big edge over B&N.
But, when you look at Microsoft’s earnings for the last quarter, $5.1 billion in profit (on $17 billion in sales), it looks like the big dog just entered the game. But, don’t forget that Apple is on the scene as well.
Clearly, the e-reader battle is just heating up and everyone wants a piece.
There is a booming market for apps that allow you to read while offline. The two most popular of these apps, Instapaper and Pocket, let you save an article for later like on an airplane or in your underground nuclear bunker.
Now, Amazon is entering the game by offering the same service for the Kindle. A new app for Mac and PC allows you to “Send to Kindle” and then read on your e-reader or on a smartphone/tablet.
I think this gives the Kindle an edge in two big ways. One, most of us are likely to carry our Kindle with us when going into non-internet zones. That’s why we bring it, to pass away those long hours with books, but now we may be able to do so with articles and blog posts as well.
Two, we all know reading on an e-reader is preferable than doing so on the backlit displays of smartphones and tablets.
It will be interesting to see how this Kindle competition affects the market. I always thought that Instapaper and Pocket had a niche market. They must be scared to see the 10-ton behemoth, Amazon, entering the fray.
28% of Americans age 18 and older own at least one specialized device for e-book reading – either a tablet or an e-book reader.
The holiday season saw a huge boost in ownership for both e-readers and tablets. Both jumped 9%, meaning that nearly one in ten Americans received a device over the holidays.
The average reader of e-books says she has read 24 books in the past 12 months, compared with an average of 15 books by a non-e-book consumer.
78% of those ages 16 and older say they read a book in the past 12 months.
Overall, those who reported reading the most books in the past year include: women compared with men; whites compared with minorities; well-educated Americans compared with less-educated Americans; and those age 65 and older compared with younger age groups.
30% of those who read e-content say they now spend more time reading, and owners of tablets and e-book readers particularly stand out as reading more now.
The longer people have owned an e-book reader or tablet, the more likely they are to say they are reading more.
The prevalence of e-book reading is markedly growing, but printed books still dominate the world of book readers.
In our December 2011 survey, we found that 72% of American adults had read a printed book and 11% listened to an audiobook in the previous year, compared with the 17% of adults who had read an e-book.
There are four times more people reading e-books on a typical day now than was the case less than two years ago.