Amazon.com Inc. (NASDAQ: AMZN) refuses to let their e-reader, the Kindle, suffer in the face of rising tablet computer sales. The online bookseller has spent the summer of 2010 waging an aggressive campaign to boost both sales and interest in their portable device.
June marked a flurry of activity, with announcements that the Kindle would be available at a wide variety of retailers across the world, including Target Stores (NYSE: TGT) outlets and HMSHost airport retailers throughout Britain. Amazon also dropped the device’s price in the middle of the month, down to $189 from $259, and just weeks before they announced the redesigned Kindle 3. The Kindle 3 began shipping just last week, including the $139 model that features only Wi-Fi wireless communication. Today, Amazon announced that it will begin selling Kindles through Staples Inc. (NASDAQ: SPLS) and its more than 1500 retail outlets. Contrary to popular belief, it looks like Apple Inc. (NASDAQ: APPL) and its iPad haven’t killed the e-reader just yet.
Of course, while Amazon is finding ways to get its e-reader into as many brick and mortar stores as possible to sublimate its chief competitor, the Barnes & Noble (NYSE: BKS) Nook, the tablet PC market is only just heating up. While the writing may not be on the wall just yet for e-readers, the coming surge in competition in the tablet market might force both Amazon and Barnes & Noble to reposition their e-book business as pure services. Apple’s iPad has sold just under 4 million units in its first four months on the market, close to the 5 million lifetime sales of the Kindle as estimated by research firm Forester Research. Now e-readers face the impending release of new tablets from Sony (NYSE: SNE), Hewlett-Packard (NYSE: HPQ), and Toshiba (LSE: TOS).
Toshiba in particular made headlines this week by announcing the October release of their tablet, the Folio 100. The Folio will run on the popular Google Inc. (NASDAQ: GOOG) Android mobile operating system, namely Android 2.2. While a range of cheap, low-powered tablets from private manufacturers have hit the market in the past quarter, Toshiba’s machine will be one of the first major tablet competitors released using the operating system. The Folio 100 may also be competing this fall with the rumored Verizon (NYSE: VZ) and Google joint project, the Chrome OS Tablet, which is said to be an affordable, but functionally comparable, alternative to Apple’s AT&T-supported iPad. While Hewlett-Packard was expected to also be bringing an Android-powered tablet to market in October, the company has since gone mute regarding their tablet plans.
With this many new tablet options on the market, it’s going to become increasingly difficult for Amazon to drive sales of its e-reader no matter how many retailers it’s available in. Now is the time for Amazon to be redefining and broadening its deal with book publishers, so as to secure the greatest selection of electronic books, making its Kindle app for mobile devices, not the Kindle itself, indispensible to readers everywhere.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
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