Might Amazon Make The Kindle Reader Available For Free In The Not Too Distant Future?
There can be little doubt that the main player in the e-book reader market is the Amazon Kindle. The release of the upgraded third generation Kindle reader has made Amazon’s dominant position even stronger. It’s worth noting that the only genuine competition which the Kindle has seen up until now has come from a multi-functional tablet computer which costs more than three times the Kindle price – the Apple iPad.
However, even the iPad’s appearance on the scene doesn’t seem to have had any major impact on demand for Kindle readers. Since it was unveiled at the end of July, the new and upgraded Kindle 3 has been flying off the shelves. The new Kindle is selling faster than any earlier Kindle reader did in the equivalent post launch period.
One very significant advantage which Amazon has over its competitors – including Apple’s iPad – is the enormous library of Kindle books which customers can choose from. There are more than 670,00 titles available on Amazon’s Kindle store at the moment – and that number is increasing every day. There are also an additional 1.8 million out of copyright books which are free for Kindle users to download!
As well as making the Kindle reader a more attractive choice for prospective customers, this large library of e-books means that Amazon can operate with a slightly reduced selling price for their Kindle reader hardware based on the fact that customers will be buying Kindle books throughout the lifetime of their reader. For Amazon, it’s a significant competitive edge over their competitors.
Amazon have given a good indication of how they see the e-book market developing by releasing a number of free apps which allow users to download and read Kindle books on a selection of different devices. They must anticipate that, in the not too distant future, ongoing e-book sales will be more important than the one off sales of e-book readers themselves. Up to now, this seems to have been a very successful strategy for them. They currently enjoy a market share of somewhere between 60% and 80% of the US e-book market (depending upon which estimate you want to believe) and approximately 20% of their total sales of Kindle books are destined for use on a variety of non-Kindle devices.
Bearing in mind the strong downward price movement of e-book reader hardware in general, and the Kindle reader in particular, you have to wonder whether we might even see Amazon giving Kindle readers away for free in the not so distant future. Of course, it may well be a gift that came with some strings attached. Perhaps members of Amazon Prime (Amazon’s premium express delivery service) would qualify. Could we see the launch of some kind of digital book of the month club where members receive a free Kindle subject to buying a certain number of Kindle books within a certain timespan. There are a quite a few possible options which could, quite realistically, make this a practical business model for Amazon assuming that the price of e-book readers continues to move downwards.
The very fact that this is a strategy which is available to Amazon, but not to the majority of their competitors, must make it a worthwhile scenario for consideration. It is certainly not beyond the realms of possibility.
