My goodness. When I wrote about the Barnes & Noble Nook and Amazon Kindle’s price-war as showing the way to the end of dedicated e-readers, I didn’t expect quite so many people to insist I was wrong. Wrong I tell you!
Of course some people, like ZDNet’s Jason Perlow agreed with me that “eReader devices face mass extinction.” A lot of other people flooded me with arguments for why dedicated e-readers would keep going.
Their arguments amounted to two different factors. The first was that Amazon and Barnes & Noble could afford to sell e-readers for ultra-low prices because they made their real money from selling books for this platform. This sort of business policy is known as the razor-blade plan. The idea is you sell something cheaply, the razor itself or, in this case, the e-reader, while making your money from the razors, or book in this example. This works. This same plan is why we can buy great printers for less than the cost of manufacturing while paying through the nose for printer ink and toner.
The problem with this plan is that it breaks with e-readers. Tablets, like Apple’s iPad, and the coming wave of Android Linux-powered and ARM/MeeGo Linux tablets, can do everything that the e-readers do using Amazon and Barnes & Nobles’ own software, and more. Even if you drop e-readers prices below $100, as Ron Miller suggested, you still can’t get around the fact that the competition will be able to do so much more than a dedicated e-reader.