Nook Vs Kindle Price Drops
The impact of price cuts on the two leading eReaders
In the battle of Nook vs Kindle, one of the biggest showcases of Amazon and Barnes & Noble's competition for sales has been the price wars. In early July 2010, both companies stepped up to the plate, reducing the price of their respective eReaders. As a result of that, the Amazon Kindle was priced at 189 dollars, and the Barnes and Noble Nook settled at 199 dollars. In addition, Barnes and Noble added a WiFi only model that was priced at 149 dollars.
What is interesting, is the effect of these price wars on the Kindle vs Nook question. As both companies vie for your dollars, cutting their prices makes both of them instantly more attractive. At a lower price point, the cost of entry is now much more manageable for more general consumers who might have otherwise shied away from the eBook market. Where it had once been a debate purely for hardcore readers, now every consumer must ask his or herself if they're interested in an electronic book reader.
Thus, the Amazon Kindle and Barnes and Noble Nook enjoy the expansion of the eBook market. However, neither product will really make significantly more money as a result of this price cut. In fact, there's a good chance both companies will lose revenue. The reason is that both companies made the price cut, making neither offering more attractive than it previously had. What's more, every sale now pays the company less, and so, for every four previous sales, the company must sell five eReaders to make up for losses.
Overall, the price drops play an interesting dynamic in the eReader market. While they likely won't help interested newcomers decide either Nook vs Kindle, it could play a big part in at least making them interested in deciding. We'll have to see as time goes on how big of an impact these price cuts will have.
