Batten down the hatches, all hands on deck, there is an e-reader price war beginning and we could see e-readers being lowered in cost to a mere $99.00 by next year.
The Amazon Kindle 2 World edition has dropped in price this year from $299.99 to $259.00. Meanwhile, Sony is experimenting with a lower cost electronic reader by offering the Sony PRS 300 for $169.99 instead of $199.99. Most entry e-readers now cost around $200.00 to $300.00 for 6 inch ones, and 9 inch ones cost anywhere from $300.00 to $600.00.
One of the factors that will reduce the costs of the traditional e-reader is new processor technology from a company named Freescale Semi Conductors. After a split from Motorola, Freescale chips are found in 90% of all of the E-Readers in the current market. They have partnership agreements with Sony and Amazon, and could reduce their entry level prices by $150.00. Freescales new chip dubbed the i.MX508 (go marketing department.) The new chip in high value production will cost less than $10.00 to manufacture and it which is a big draw to their existing customers. The new chip, which integrates E Ink’s latest display controller technology at the heart of most e-readers, also has the capability to support future color displays, which is why you hear of all of the rumours of E-INK color e-readers due out at the end of the year.
The ARM Cortex A8 core which is at the center of the new chip not only contributes to features like way faster page flips, which indecently the average page flip is around 2 seconds, the new chip will turn the pages at half a second. But also contributes to lower power consumption. Current generation e-readers can function great with WI-FI on for around 6-8 hours before you need to re-charge it. If you have the WI-FI off, or have a device that is not internet enabled, you can usually go through an entire day or two without having to re-charge the battery.
So longer battery life, a more cost efficient chip, and able to boost e-ink from black and white to full color by an established company like Freescale is a boon to the industry. Why you may ask? Not only will future e-readers be more energy efficient, color and a faster processer but existing e-readers may also come down in price, as the big companies like Amazon, and Sony can forecast profit dividends from future sales based on a lower cost unit, against selling existing devices as a discount, and in the end it provides a strong profit for the company.
With cheaper hardware components due out in a few months, most electronic reader companies such as Barnes and Noble, Asus, Fujitsu, iRex, Astak and others will be putting out future devices for its audience. Most people are brand loyal and will stick with a company, as well, most E-Readers have their own book stores and do not want to lose their customers to another brand. Do not forget, most books you buy are DRM (Digital Rights Management) that means the books you purchase say from Amazon, will only work on your Kindle Device, if you choose to buy another device, you will not be able to read your existing books. This is a way that most companies retain customers for the long term, sell a device, sell the service, and support, and make it impossible to transfer everything to a new device, locking the customer in. Find out more at our E-Reader Forum.
With the rise of the ePub format, this is beginning to change, as most e-readers allow DRM and Non DRM ePub books to be read on their devices, similar to most new devices using Google Android as an operating system. Companies are starting to realize that using your own proprietary formats for books and operating system are constantly changing. Most companies barely turn a profit, much less have the money to constantly make updates and tweaks to its own operating system and firmware features. Having an operating system that is open source, as well as books that are standardized, it allows companies to do much more with less, and have the community at large to recognize a problem and contribute to the community their own fixes. This is why Linux has worked so well. The E-Reader companies are staking their future that their devices will replace real books.
Companies will further cut costs to e-reader devices recognizing the fact that they make the real money in books in the long run. Service based technology has always come down in price. People who would normally buy e-readers are hesitant to spend 300 to 600 dollars on a device that they may not need. If you look at the cell phone industry, they used to be very expensive, now they make the average phone cost anywhere from 0 to 100.00 and they get you at the service, features, and content packages. You will notice this occurring with E-readers as well. Amazon, Barnes and Noble and other content distribution companies, which sell e-books are raising their average price, per book from $10.00 to $15.00. So you will pay less for an e-reader towards the end of the year, but pay more for books, which you will buy a fair number of.
It is a double edged sword, e-readers that cost less than $99.00 and the rising cost of e-books, will it balance out in the end? Only time will tell. There is heavy resistance to the e-book price increase from the public, publishing companies, authors and more. Whether this planned hike in e-books comes to fruitarian or not, remains to be seen. There is allot of excitement brewing at the prospect of E-Ink technology being full color. With the rise of the Slates and Tablet PCS that feature full color, and remain competitively priced with traditional e-readers, companies like Amazon, Sony and others have to offer color in order to preserve existing customers from switching brands or offer Slates and Tablets themselves. We know the technology is there for Color E-Ink, and most big companies have plans to launch new products, and in an increasingly competitive market in the E-Reader industry, things are just starting to get interesting.
So batten down the hatches, all hands on deck, there is an e-reader price storm on the horizon.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.