An opinion piece in eWeek:
Kindle, Nook Ready to Dominate E-Reader Market
Quote:
Amazon and Barnes & Noble were just two of many companies promoting e-readers at the beginning of 2010. Thanks to rising cost pressures and competition from the likes of Apple, they may soon be the only ones.
“With these cuts, ebook readers from Barnes & Noble as well as Amazon now are priced at about the break-even level with their Bill of Materials … and manufacturing costs,” William Kidd, director of iSuppli, wrote in a June 24 statement. “With zero profits on their hardware, both these companies now hope to make their money in this market through sale of books.”
Both Amazon and Barnes & Noble can leverage their existing infrastructure and customer base to make those sales happen; but smaller e-reader manufacturers lack that brand awareness and marketing millions. Lacking high-volume e-book sales, and manufacturing devices with either nonexistent or negative margins, the latter could find itself pushed out of existence in short order.
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Seems pretty obvious that the big book-seller/book-reader combo companies have all the advantages (can sell readers at cost or loss, make profits on book sales), and that will drive the smaller reader-only or reader-and-weak-bookstore companies out of business.