Quote:
Originally Posted by rhadin
Yes, there is a percentage of buyers who will strip DRM and format shift, but I suspect that once you get outside Mobile Read (and perhaps even within MR), the group of strippers and shifters is really small in comparison to the whole group of ebook buyers. Consequently, while B&N might need to war with Apple, Sony, Kobo, and other etailers of ePub format ebooks, there is little reason for Amazon to war with B&N, Apple, etc. as regards ebooks themselves. I'm surprised there isn't more price warring going on with the hardware, which is the gateway.
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If you look at the number of downloads for Alf's tools at the primary site the numbers rarely go above 5 digits. So the reality is the vast majority of folks are comfortable within the walled gardens.
And yes, the real ebook price competition is "within" the commercial formats not between them.
But hardware-level competition isn't much of an issue because all the players draw from the same component pool and the same chinese manufacturers. The only real differences, cost-wise, are in the software and DRM, and in the economies of scale; all of which (strongly) favor Amazon in the dedicated reader space and Apple in the Tablet and phone space. (With Amazon looking to creep up in the tablet space.) As the Five Hour Price war proved, Amazon is not going to let any significant competitor undercut them on hardware prices to any meaningful extent and since their volumes are higher and costs are lower it would take very deep pockets and a lot of bleeding to mount any sustained attack on Kindle pricing. Which is why Amazon's strategy is to price their readers comparably to the competition (slightly lower with the Ads, slightly higher without them) so that their hardware margins are always just a wee bit better than the competition.
The reality is that until a whole new generation of low-cost display *technology* emerges to change the economic of the business, Amazon is sitting pretty and the best any challenger can hope for is to keep pace with them. Taking significant share on pure merit (as opposed to political action or other market distortions) is pretty much out of the question for the next few years.