Friday, August 09, 2013

The battle of the e-readers – Amazon and Nook go head to head

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It’s been a tough few months for Barnes & Noble’s Nook e-reader. Lauded as a viable competitor to the mighty Amazon Kindle, its parent company put a great deal of stock and faith in the success of the Nook.

But in the battle of the e-readers the Kindle is beating the Nook into submission, and it’s resulted in some serious boardroom shake-ups at Barnes & Noble. In the first three months of 2013, B&N took a big financial hit, with online and physical sales down by 10%. Overall, it made a $118m loss in the quarter – but that was compounded by a $177m loss in the Nook division, compared to a loss of $77m loss in the previous year.
e-readers - Amazon kindle & Nook

But what do these figures mean? Is the public falling out of love with the e-reader, or is it just a simple case of organic market adjustment? Whilst the Nook has been struggling to survive, the Kindle has swept aside all competition. In the UK, Amazon is believed to account for nine out of ten e-book sales, making the Kindle one of the most successful personal gadgets of recent times.

A saturated market?

However, there could be a cloud on the horizon for e-readers – has the market reached saturation point? According to research group Gartner and others, the answer may be yes. Figures show that worldwide sales of e-readers dropped to 17.9m in 2012, and will dip even further down in 2013, to 16.1m. The analysis company blames the advent of cheap tablets that effectively offer the same e-reader capacity as the Kindle or the Nook, but with a host of other features, making them far more multi-functional.

To head off the possibility of stagnating and even going into decline as a market, e-readers are going to have to diversify and innovate. Flexible display technology that can be used to create thinner, more robust displays is one option, and the inclusion of additional functions will certainly be a must-have on future e-readers. That’s a challenge that Kindle has already accepted and may account for its continued dominance of the marketplace.

Staying viable

If other e-readers want to stay viable then they have to employ a different business tactic, and one that doesn't involve taking on the mighty Amazon at its own game. What will help is the development of new technology in e-readers such as the development of full colour versions. But also how e-readers are accessed could change too, introducing the concept to more people via an unexpected pathway – the local library.

Shoalhaven’s Nowra Library in Australia is offering e-readers on loan to keen readers. It could be a new and innovative way of introducing e-readers to those who would not normally think about using one, and if it takes off it could be adopted elsewhere. With the falling cost of basic models (some are now under £30 in the UK), they’re actually a lot cheaper than some of the books they’re replacing. In theory, libraries stocked with e-readers that are lent out to readers pre-stocked with a selection of books could be the future, rather than traditional, paper-based books.

What the Nook versus Kindle battle shows that no matter who wins the boardroom battles, new technology and more innovative ways of introducing the concept of e-readers to people such as Shoalhaven’s approach could be the only thing that stops e-readers from becoming ‘also ran’ tech.

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