While the Amazon Kindle and to some extent the Sony Reader have ignited the e-book industry, analysts say that the market will not be able to grow much further without a serious price drop. Forrester Research studied the problem, and found the “magic price” where consumers would start considering a purchase was around $150.
It gets worse though: the actual price that consumers want to pay is much lower, sitting at around $90. This is nowhere close to the current retail prices of e-bookreaders: Sony’s somewhat close to the magic number with it’s cheapest at $199, but Amazon’s way overpriced in consumer’s eyes at $299.
Analyst Sarah Rotman Epps said that e-readers will likely never be a mass market device, however by getting prices down quicker they could exceed current sales targets easily. Consumers have an expectation that prices on technology can drop quickly (i.e. iPhone) and are expecting the same to happen here, she argues.
Component prices seem to be the major issue here, as the screens used to manufacture these devices are still somewhat prohibitively expensive. Regardless, Epps said she expects the prices of e-readers to drop about 20% in the next year.
That would put Sony near that $150 goal, but the Kindle would still remain well over $200, and above what most consumers would be willing to pay.
I agree that the pricing needs to come down on these units. If it comes to it, and the reason why the Kindle can’t get cheap faster is due to the EV-DO data included, take it out. Sell it as an option. I don’t know if Amazon would be willing to do that, but if they did that could be one way to lower prices faster.
Are you all in the market for one of these devices, and if so, what is your magic price for an e-reader? Let us know in the comments.