WSJ: How Low Will E-Reader Prices Go?

[Crowl]

Originally Posted by Kali Yuga

I dunno, I think Sony is probably done. Despite getting into the market first, they just don't have a brand identity that is associated with books, while Amazon and B&N obviously do. They would've been much better off building ebook devices for an existing chain of bookstores at the outset.

I can definitely see them working with the book sellers in the future, but to be fair to them, when they started that wasn't really an option since none of those companies had really started to push things.

As far as their brand identity, they will still be seen as a premium hardware maker and brand overall, so will be more of a premium offering from whatever bookstores they work with in the future.

Also, I suspect Amazon is at least temporarily suspending its previous strategy (profiting from both device and ebooks) in favor of profiting primarily off the ebooks. I'm pretty sure Sony was planning to make money from the device, in which case the price war is going to seriously hurt them.

Amazon are probably still making money from the hardware, but things like an expanding market and the change to agency pricing will have boosted their profits so they can afford to make less profits per device.

[kjk]

Originally Posted by Kali Yuga

I dunno, I think Sony is probably done. Despite getting into the market first, they just don't have a brand identity that is associated with books, while Amazon and B&N obviously do. They would've been much better off building ebook devices for an existing chain of bookstores at the outset.

Also, I suspect Amazon is at least temporarily suspending its previous strategy (profiting from both device and ebooks) in favor of profiting primarily off the ebooks. I'm pretty sure Sony was planning to make money from the device, in which case the price war is going to seriously hurt them.

Sony and Amazon have other diverse sources of income to play the price war game for a while.

I'm not sure if Sony does have the stomach for it-they just managed to get profitable on the PS3...having to go back in the red for another product line might be too much. I will be interested if they really commit again to the Japanese market.

Borders (Kobo) and Barnes and Noble? Looking at their market caps and revenue streams, it is hard to see how they can compete in a hardware price war at all, even if they make a pure razor/razorblade play with their content.

And the hardware device only guys? Pain.

[Kali Yuga]

Originally Posted by Crowl

I can definitely see them working with the book sellers in the future, but to be fair to them, when they started that wasn't really an option since none of those companies had really started to push things.

I disagree, they could easily have approached B&N and said "we make the hardware, you make the books," e.g. pulled a Sony Ericsson. Who knows, maybe they did, but I doubt it.

Originally Posted by Crowl

As far as their brand identity, they will still be seen as a premium hardware maker and brand overall, so will be more of a premium offering from whatever bookstores they work with in the future.

Unfortunately, I suspect Sony's days as a "premium" brand are behind it. I'm not sure if they're back to profitability yet; and if the reader doesn't score well next holiday season....

Originally Posted by Crowl

Amazon are probably still making money from the hardware, but things like an expanding market and the change to agency pricing will have boosted their profits so they can afford to make less profits per device.

I suspect they're not making much profit right now -- the price has dropped nearly in half over the past year or so. They could easily take a short-term loss with the expectation of a manufacturing cut in, say, 3-6 months. Or just be selling them at cost to try and keep up market share.

Of course, without anyone releasing numbers, it's nearly impossible to say for sure.

[Kris777]

Originally Posted by Kali Yuga

I dunno, I think Sony is probably done. Despite getting into the market first, they just don't have a brand identity that is associated with books, while Amazon and B&N obviously do. They would've been much better off building ebook devices for an existing chain of bookstores at the outset.

Also, I suspect Amazon is at least temporarily suspending its previous strategy (profiting from both device and ebooks) in favor of profiting primarily off the ebooks. I'm pretty sure Sony was planning to make money from the device, in which case the price war is going to seriously hurt them.

100% agree. The question is who will offer ereader for free first - Amazon or B&N. Sony can't do it because they don't make money on ebooks.

[Solicitous]

From the article;

"Our global customers expect to get the best digital book reading experience and we’re concentrated on delivering that by investing in Sony’s award-winning design and original digital reading enhancements, such as eBook library borrowing and the only full touch-screen on the market.”

What are they smoking over at Sony, "Our global customers"?? Last time I checked Sony only sold and supported their ereaders in a handful of countries.

Be very interesting to see exactly what Sony actually do with their apparent new line up coming. Will they stay and tough it out or will they go home and take their ball with them? I think Sony will hang around, not sure on the extent of price reductions. Their PS3 had been a loss product (made money on the games) and only just recently turned a profit on PS3 console sales. So perhaps Sony might be willing at some point to sell their readers at a loss in the hope of staying in the game.

[sabredog]

Sony are poised to re-enter the Australian market next month by all reports. It will be interesting to see if there is a new model offered or just the current three models.

Any which way, they will NEED to be competitive here if they hope to be part of the market in the long term as the new K3, the older K2 and the Kobo soak up pretty much most of the ereader market. I doubt Australian ereader users wish to pay more than they can import a K3 for or pay locally for a Kobo.

[Lyndl]

Originally Posted by Kali Yuga
Unfortunately, I suspect Sony's days as a "premium" brand are behind it. I'm not sure if they're back to profitability yet; and if the reader doesn't score well next holiday season....

My husband's business is the repair of electronic & computer equipment and he'd always been a huge fan of Sony. However, over the last few years he's tempered that and Sony is no longer the first choice for electronics in this house. They haven't quite gone the way of Akai but they are definitely not as premium as they once were.

[charleski]

Originally Posted by ppw

Sony is not going for it.

http://blogs.forbes.com/velocity/201...-reader-title/

If Sony wants to go the route of claiming better quality and design then they'll want to beef up their support to stop looking stupid.

I was very impressed at the effort they put in to upgrade the PRS-500 to handle epubs, but support for their later models is distinctly lacking. We know Adobe has a better version of their reader SW available, so where's the firmware upgrade? The Kindle 2 received several software updates during its life, updates that didn't just fix bugs but added functionality.

If Sony wants to pretend that they're offering a higher-quality product, they can't treat their devices as commodity appliances and need to back them up with proper support.

[brecklundin]

Originally Posted by kjk

Sony and Amazon have other diverse sources of income to play the price war game for a while.

I'm not sure if Sony does have the stomach for it-they just managed to get profitable on the PS3...having to go back in the red for another product line might be too much. I will be interested if they really commit again to the Japanese market.

Borders (Kobo) and Barnes and Noble? Looking at their market caps and revenue streams, it is hard to see how they can compete in a hardware price war at all, even if they make a pure razor/razorblade play with their content.

And the hardware device only guys? Pain.

Seems Sony is getting hit with a double whammy this week because rumor in the DSLR world is Sony is abandoning their line of full-frame (think 35mm film sized) sensor based cameras because they simply cannot compete with the Canikon's of the work (Canon & Nikon). Mind Sony makes sensors for their, as well as other brand, cameras.

Now the ereaders look to be too cutthroat for all but those with solid content sites to justify the lower margin on the hardware. If anyone doubts Sony's willingness to dump an existing and profitable division just research how they unceramoniously dump their PDA division almost overnight. See it was making money, just not enough money and they did not, apparently, see it as an area of potential growth....sooooo, off it went. Same now with the top of the line DSLR cameras so I don't doubt the ereader division is not on the block as well.

One thing Sony has never down well at is to compete on price...they have always been able to rely on the nice quality control they offered. But these days, I am not sold that Sony offers any QA/QC advantage....comparing the Sony readers to other brands leaves the Sony's wanting...the 300 is really one that does not instill confidence in it's durability, though I don't recall many people reporting problems, it is just that held side by side with my Kindle's and certainly compared to my nx73v PDA (Sony btw) the 300 feels like it is a "genuine Cony" rather than a genuine SONY made product...

Plus I am betting Sony is doing a lot better than others with their TV and other higher end products than they are with book readers. So, I see Sony as maybe giving it one last shot this fall but if we see just a big price drop on current models they could be done...and I mean a price drop that "feels" different from their previous history prior to new readers being released. A real shame because I like their devices, especially the 505 was a well done piece of hardware. But toss in their poor software support and the gap gets wider....

hmmmm, how funny would it be for Sony to go totally OPEN SOURCE on their readers? I suspect this is an area any device maker could do a lot with...that and, well, of course color! I have to wonder if that is where Amazon is vulnerable...but until there is a viable color panel option that Amazon does not have access to, I guess it's not a potential weakness.

I

[fjtorres]

One thing that puts the Sony readers at special risk is that the ereader division has been run out of California ever since they bailed out of Japan. Given how well the various divisions at Sony *don't* get along, the reader folks can't count on support from the japanese hardware guys.
As for their announced return to Japan; they were looking to do it with the exact same models now shipping so it is doubtful they have new anything in the pipeline.

http://www.sonyinsider.com/2010/06/0...international/

(Note that the announcement of the Readers going international came out of the US, not Japan.)

Oh, and yes; Sony's TVs have been doing better of late: they just announced a decent profit for the latest quarter.
http://www.engadget.com/2010/07/29/p...bove-expectat/

[Lastblade]

Maybe I am unlucky but I always seem to have problems with Sony products (CRT TVs, Walkman, etc). They make very nice electronics but after a few years, they seem to break down. I stayed away from them other than the Playstations (since you don't have much of a choice if you want to play their exclusive games). Go figure that everyone has issues with their Playstation 1 while mine still works (if I flip it upside down, lol).

I did buy a Bravia LCD TV a couple of years ago and I would never buy another Sony TV. My Samsung Plasma destroys it in every which way imaginable (view angle, color, speed of changing channel/on/off, shadow detail, etc).

I never even considered a Sony eReader as a viable alternative. They aren't any better than Kindle/Nook and they certainly aren't cheaper than any other. So why even bother?

[Maggie Leung]

Sony no longer has premium value for me, either. My experience has been hit or miss. Two identical Walkmans, quickly dead. A Viao with a hinge that quickly failed, so that its lid splayed open. On the other hand, I have three Sony CD changers that have held their own. I might buy other Sony products, but they're not worth a premium to me.

[wowen]

Pricing models in the future are hard to determine, I think it depends on what the publishers will accept. But I would guess it won't be long before Amazon offer a Kindle free alongside a monthly subscription "Book of the Month Club" deal where you get to pick a book for free each month and are tied to a contract for 12-24 months at $9.99 per month.

[Fbone]

still hoping for $99 e-ink

[delphidb96]

Originally Posted by Fbone

still hoping for $99 e-ink

$139 is pretty darned close!