Dispatches from the E-Reader Wars

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Amazon vs. Barnes and Noble vs. Apple. The E-Reader Wars are heating up.

This has been a rough month for and its dominant position in the e-book market following a series of recent setbacks involving the company’s e-reader, the Kindle, and its tablet, the Kindle Fire. The e-reader, which more than any other device sparked the long anticipated digital revolution in the world of publishing, is no longer going to be stocked in any of Target’s stores across the nation. Although a New York Times’ article, "Target, Unhappy With Being an Amazon Showroom, Will Stop Selling Kindles" (Stephanie Clifford and Julie Bosman, 2 May 2012) speculated that the move is going to be little more than a minor irritation for Amazon, it means that the device is going to be pulled from the shelves of almost 2,000 brick and mortar locations.

This news comes at a time when the Kindle Fire, once spoken of as a rival to Apple’s own tablet and even labeled by some – always followed with a question mark – the “iPad-killer”, has decreased in sales. In a recent Reuters article, "Amazon's Kindle Fire shipments slump in Q1: IDC" (Poornima Gupta) it was reported that the tablet has been knocked out of second place by the Samsung, despite its relatively cheap price and its exposure on Amazon’s main page.

Amazon’s chief rival, Barnes and Noble, has received some good news of its own in the midst of Kindle’s bad month. It was recently announced by the book chain that it had partnered up with Microsoft to enhance the Nook, Barnes and Noble’s own e-reader, which despite some resistance has been able to corner a respectable share of the market. The goal of the partnership with the software giant is to synthetize the e-reader device with Microsoft’s software. Not only does this provide a new venue to strengthen the Nook, while simultaneously providing a new platform for the Microsoft operating system, but it also gives Barnes and Noble a partner that it has desperately needed in a time when some within the company are questioning its digital strategy.

While this move doesn’t necessary signal any massive shift in the market – sales of e-readers have been divided between Amazon, Barnes and Noble, and Apple primarily, with the Kindle seizing the lion’s share of the customers – it does allow the Nook to maintain momentum and entrench its place, while positioning itself to potentially grab new customers, especially if Microsoft allows some cross over features between the various systems, such as the Xbox and its smartphone, similar to what Apple has done with its devices.

In many ways it has shown tremendous will and organizational focus that Barnes and Noble has even lasted this long, let alone been able to thrive in the world of digital publishing and e-readers. When the Kindle first appeared it achieved such a tremendous commercial ubiquity and status, taking e-books from their position as a relatively niche section of the publishing industry into the main stream, that it seemed like nobody would be able to catch up.

Barnes and Noble, however grasped, the ramifications of this e-reader, unlike its competitors, and moved with surprising speed to not be left behind. Unlike their now defunct former rival Borders, which sold the Sony E-reader and the Kobo reader, Barnes and Noble began placing Nook kiosks in the very front of their stores, stationed with motivated specialists who could answer questions and offer rudimentary tech support for customers. These moves allowed Barnes and Noble to market their products to people who might not be interested in e-readers or not realize they wanted one until they had a chance to actually hold one and play around with it. That, coupled with free Nook training days similar to those held for the iPad at the Apple store, and special user-coupons and discounts good on in-store purchases allowed the device to slowly but surely establish a base.

Naturally, the ultimate success of this policy remains to be seen. Some have speculated that Barnes and Noble is only hastening their own demise. By selling e-readers to their customers, they might be unintentionally reducing the amount of customers who purchase their printed books and only increasing the conversion of bibliophiles into embracing the new digital reality. These critics successfully point out that the sales of e-books are strong, but question whether they will be strong enough to pay the electricity bills on the hundreds of massive superstores across the country and the sizeable staffs required the maintain them. Sometimes, it can be argued, creative destruction ends up being just destruction.

In the midst of the so-called e-reader wars, its important not to ignore Apple and the iPad. Before his death, Steve Jobs planned on using the iPad to revolutionize publishing very much the same way the iPod changed the music industry. Since the iPad’s release in 2010, Apple has been aggressively attempting to undermine Amazon and its hold on e-book pricing, even to the point of being investigated by the government for price fixing.

While it has yet to reach the point of market penetration that Jobs may have envisioned, the iPad may be poised to reap the benefits in the long run. With Nook and Kindle applications on its various devices, Apple doesn’t necessarily have to beat its opponents in a straight fight. It simply has to make sure that people read their e-books on its device. If tablets continue their high sales and customers begin shifting from more single-purpose dedicated e-readers to multi-use high speed tablets, Barnes and Noble and Amazon may find themselves fighting future battles not in the world of books, their turf, but in the world of electronic devices, Apple’s domain.

Regardless of the setbacks, it's clear Amazon is still in a dominant position. However, with the investigations of Apple, Barnes and Noble refusing to sell books published by Amazon, and Target refusing to sell Kindles, the battle to control the digital future of the book is only going to get more aggressive from here on in.

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