E-Reading

So the Father's Day advertising war for various e-book devices, including the Kindle, Nook and iPad, was followed by the after-Father's Day price war. B&N came out with a bare-bones Nook that sells for $149 but has only Wi-Fi access, i.e., no 3G or no downloading a book anywhere with a cell phone signal. The fully-equipped Nook was also given a price cut. Amazon immediately responded by dropping the price of the Kindle to $189. Borders was already starting to sell some e-book readers, including first shipments in time for Father's Day, for $149. They're now offering a $20 gift card with that, and double Borders R Reward bucks. Since you get $5 for $150, then buy this and a truffle ball and your net price for the Kobo eReader becomes $120.

One article I read says that B&N is now making more Nooks than Amazon is Kindles, so they seem to have some quiet success leveraging their store presence to sell the e-reading device. And Apple has sold over 3 million iPads in just a few months, even though it's impossible to actually buy one anyplace because they're in a perpetual state of being sold out. Nobody knows how many Kindles or Nooks have sold, but the combined total would be well up into seven figures.

In part, this is a natural thing in consumer electronics. As more and more are being made and purchased the component price goes down and the fixed costs are more easily leveraged and the price comes down.

But there's also more flexibility on the gadget price because of the switch in pricing on the e-books. Last year Amazon was paying $13 for a DEAD AND GONE e-book and selling it for $10, losing money every time out. This year, DEAD IN THE FAMILY is now publisher-set at $12.99, and Amazon gets to keep $3.90 of that. When you make $4 on every book instead of losing $3 you can price the gadget for less.