The coming price war?

[A J Edwards]

Future pricings of eReaders is going to be interesting. So far, as far as I can tell, the tale seems to have been:

"We manufacture and sell eReaders, but our sales volume is low. Therefore there is little market for these devices."

Vendors have not realised that no-one is prepared to pay their outrageous prices for what is essentially a one-task device.

The launch of the Kindle in the US at US$400 (UK£200) and the rate at which it sells out, indicates (to me at least) that the price that people are prepared to pay around UK£175 (US$350) for a "non-wireless" eReader.

If vendors do not match these sort of prices then I suspect that their product is going to be dead in the water. I think we should all hold off buying until around March 2008 when the prices across the board will be about right, or certain companies will have gone to the wall along with their product.

Assuming that we get a nice price war, and I believe that it will come down to just this, survivors/winners will probably be:

Bookeen Cybook Gen 3; (already at £245 (US$500))
HanLin V3 US$329 (UK£170 plus around £80 to bring it into the country).
If packaged for outside China with a EU supplier this will be a winner, import duties and tax is the killer here at the moment).

At £306 (US$612) Istarebook does not look hopeful.
Neither does Irex Iliad (although Iliad may have a different market (engineering , construction sciences etc etc). Its spec is a bit upmarket. But at a basic price (no cover) of £433, too pricey for the general reader, student, teacher, researcher.

The above is of course only my opinion based upon a UK view. We have seen this sort of fight before, remember Betamax and VHS?

My advice is (if you are not in the US) to wait and see who is the last man standing.

A J Edwards

[HarryT]

The determining factor at present is the high cost of eInk screens. A 6" eInk screen costs about £100 ($200) to manufacture (that's the cost to the device manufacturer, not the retail price), so you can't realisticially sell an eInk bookreader for under about £150 ($300) retail, plus whatever local taxes apply.

Manufacturing costs will certainly fall with time, but that's the current situation.

[A J Edwards]

Thank you Harry, I did not know the cost of the eink screen.

This leads me to believe that the price in the UK is then going to be approx £180 (inc VAT) + p&p. Additions such as a quality leather case can be extra.

Once this price is achieved just watch them fly off the shelves. If this price can be achieved then whoever does it will win hands down.

A J Edwards

[Sparrow]

Isn't it likely that improved technology will sustain price levels - the next gen will cost about the same as the current gen?
The best cost effective option may be to purchase penultimate generation devices (e.g. Sony 500 instead of 505).

[HappyMartin]

Originally Posted by Sparrow

Isn't it likely that improved technology will sustain price levels - the next gen will cost about the same as the current gen?
The best cost effective option may be to purchase penultimate generation devices (e.g. Sony 500 instead of 505).

I agree with you on this to a limited degree. We have been paying around $10 000 for high end 35mm digital cameras for ages. They started out at 1.4 megapixel and are now up to 21 megapixel but the price has stayed the same. I think e ink devices may follow this trend but not to the same degree as after all how far is there to go with a book reader.

[yvanleterrible]

Originally Posted by HappyMartin

I agree with you on this to a limited degree. We have been paying around $10 000 for high end 35mm digital cameras for ages. They started out at 1.4 megapixel and are now up to 21 megapixel but the price has stayed the same. I think e ink devices may follow this trend but not to the same degree as after all how far is there to go with a book reader.

Good observations. I believe manufacturers will not keep readers to be dedicated as such. The Kindle's other functions might be an indicator. Connectivity, browsing, newspapers and magazines are that step but a device that can do those is not far away from doing animation; and then colo(u)r is the next step. The reader will evolve and take place of the overpriced UMPC at the same price we pay for today's readers. Then as popularity takes on, the flexible eink devices will arrive and large scale manufacturing will assure us of cheaper alternatives.

That's all if our oil based marketing structures and lifestyle holds on.

[jasonkchapman]

Originally Posted by HappyMartin

I agree with you on this to a limited degree. We have been paying around $10 000 for high end 35mm digital cameras for ages. They started out at 1.4 megapixel and are now up to 21 megapixel but the price has stayed the same. I think e ink devices may follow this trend but not to the same degree as after all how far is there to go with a book reader.

I think it depends on how large the market gets. Laptops hit a floor, originally, while desktops just kept falling. That's because laptops were a relatively small portion of the personal computer market. Once they reached a significant share, the same market forces that pushed desktops down started working on laptops. Now a manufacturer can produce a feature-limited laptop with a $599 retail price and make money.

[Liviu_5]

Originally Posted by jasonkchapman

I think it depends on how large the market gets. Laptops hit a floor, originally, while desktops just kept falling. That's because laptops were a relatively small portion of the personal computer market. Once they reached a significant share, the same market forces that pushed desktops down started working on laptops. Now a manufacturer can produce a feature-limited laptop with a $599 retail price and make money.

I am more and more inclined to the view that unless major technical advances are made e-ink is going nowhere and it will remain a niche market.

After having the Sony for a while and giving the Ebk1150 to my father in law when he went back to Europe (he absolutely loved it, especially reading newspapers in our language), I thought I would be using the Sony more, but I tend to use it less actually, rather read a print book if I want the experience of print, and of course I use intensively my 770 everywhere. The 770 reading is not print as e-ink is, but personally I find it much better than print.

Can't say why I am using the Sony less and less (no backlight, too big, too slow, no touch screen..) but right now I am getting an Ipod touch (tested it with large science pdf's and it was the best mobile experience with pdf's that I ever had), and while now it's still locked so you either jailbreak it or have to use the wi-fi, if Apple folows through their promise and opens it up it will be a great reader too.

[Steven Lyle Jordan]

Originally Posted by jasonkchapman

I think it depends on how large the market gets. Laptops hit a floor, originally, while desktops just kept falling. That's because laptops were a relatively small portion of the personal computer market. Once they reached a significant share, the same market forces that pushed desktops down started working on laptops. Now a manufacturer can produce a feature-limited laptop with a $599 retail price and make money.

Laptops' price decline also depended a lot on technology improvements, particularly in displays. For years, laptop displays (LCDs) were in constant design flux, meaning manufacturing plants were retooling every 2-3 years, and prices stayed up. LCD display tech has since stabilized, constant plant retooling has not been necessary, and so prices have come down significantly.

We should expect that, as more companies manufacture e-ink, and once the design stabilizes (hopefully on a faster-refresh color variant), e-ink screen prices should drop, too. But, just as with laptops, it could take awhile.

[HarryT]

Originally Posted by Steve Jordan

Laptops' price decline also depended a lot on technology improvements, particularly in displays. For years, laptop displays (LCDs) were in constant design flux, meaning manufacturing plants were retooling every 2-3 years, and prices stayed up. LCD display tech has since stabilized, constant plant retooling has not been necessary, and so prices have come down significantly.

When I bought my Dell desktop in the summer, the order was delayed for a month because there was, apparently, a global shortage of the type of LCD displays that Dell use. It would seem that the supply problems with LCD screens aren't entirely a thing of the past .

[Steven Lyle Jordan]

Originally Posted by HarryT

When I bought my Dell desktop in the summer, the order was delayed for a month because there was, apparently, a global shortage of the type of LCD displays that Dell use. It would seem that the supply problems with LCD screens aren't entirely a thing of the past .

Yes, well, that's supply. I was mainly referring to manufacturing cost, which was kept overly high due to too-frequent factory retooling.

Many electronics materials have gone short, especially silicon (now that solar cell manufacturing is up) and other precious and toxic materials, and we can expect to see occasional product shortages on a regular basis, I'm sure.

[yvanleterrible]

Rarity of materials right! Silicon is the most abundant crystal on the planet.
Any reason is good to extort a buck.

[Steven Lyle Jordan]

Originally Posted by yvanleterrible

Rarity of materials right! Silicon is the most abundant crystal on the planet.
Any reason is good to extort a buck.

Yes, but refining and working with it to create precision electronics is involved and expensive, making electronics grade silicon harder and harder to get... that's why many labs are actively seeking silicon replacements for electronics and solar cells right now.

[ashalan]

Originally Posted by Steve Jordan

Laptops' price decline also depended a lot on technology improvements, particularly in displays. For years, laptop displays (LCDs) were in constant design flux, meaning manufacturing plants were retooling every 2-3 years, and prices stayed up. LCD display tech has since stabilized, constant plant retooling has not been necessary, and so prices have come down significantly.

That and the fact that for years LCD plants produced a VERY high percentage of faulty panels, which consequently raised the price for a panel considerably. The decline in price for panels did actually start when the production lines became less error prone. I.e. in the case of LCD panels it was not so much the LCD technology as such that caused the high prices.

I have no idea if the same holds true for e-ink panels. But I can very well imagine that PVI buying additional production plants might have an impact on e-ink panel pricing in the long run.

[yvanleterrible]

Originally Posted by Steve Jordan

Yes, but refining and working with it to create precision electronics is involved and expensive, making electronics grade silicon harder and harder to get... that's why many labs are actively seeking silicon replacements for electronics and solar cells right now.

Say Steve, if you're interested, I've got links to blogs and podcasts on green energy. Some of them have talked specifically about the artificial solar cell shortage and qualify it as hogwash. No offense to you and the information you communicated, I hold you in high regards. This is a subject that raises my blood pressure in no time.