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Kindle’s 90% Market Share About to Fall

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11:38 AM, Feb. 17th ET, 2010
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Amazon's Kindle currently controls about 90 percent of ebook sales, but that's about to change. Credit Suisse analyst Spencer Wang expects that the Kindle's sales market share will drop to about 35 percent over the next five years thanks to Apple's iPad and the expected launch of an ebook reader from Google, according to the Wall Street Journal.

"Going forward, we can envision a scenario where Apple, Amazon, and Google eventually split the market. Therefore, we expect Amazon's share of eBooks business to fall from 90 percent currently to about 35 percent over the next five years," Mr. Wang said.

Despite that gloomy outlook, Mr. Wang expects Amazon can still see the Kindle holding its own at least for a while. "Near term, we suspect that the iPad and the new eBook agency pricing model, which requires that Amazon increase retail prices to be more consistent with Apple's pricing, will provide Kindle with the most market share headwind," he said.

Apple introduced the iPad during a special media event at the end of January. The handled device sports a tablet form factor, 9.7-inch multi-touch display, Wi-Fi and Bluetooth support, 3G in some models, the ability to play music and video, an ebook reader, and more.

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6 Observer Comments

   Actions geoduck said on February 17th, 2010 at 12:41 PM (Edited: 01/26/2012 2:46 PM):

A 35-30-30-5 split between Kindle, iPad, Google, and the rest would be a healthy market.

   Actions Lee Dronick said on February 17th, 2010 at 1:08 PM (Edited: 10/18/2011 6:20 PM):

I don’t suppose that they are working on a new Kindle model.

I don’t suppose that they are working on a new Kindle model.

Amazon is working on a Kindle with a color e-ink display. I personally really want a ebook reader with a mirasol display. The mirasol displays are amazing!

   Actions Lee Dronick said on February 17th, 2010 at 2:26 PM (Edited: 10/18/2011 6:20 PM):

Amazon is working on a Kindle with a color e-ink display. I personally really want a ebook reader with a mirasol display. The mirasol displays are amazing!

Yes, the pad market will probably be a horse race with the various vendors coming out with newer models and gain on the competition for a while.

   Actions working dog said on February 17th, 2010 at 6:28 PM:

Apple’s entry to the tablet/e-reader arena will grow the entire market…
It will broaden consumer awareness of this type of product/experience and bring in new customers – as it did with smart phones
Amazon may have a lower % on market share but unit sales will probably be higher. A relatively smaller slice, but a much bigger pie.
I don’t have an ereader, but I do read on my iphone… and I will have an ipad.

I do not agree. I believe the e-book market will collapse because publishers are holding up the ebook vendors who are raising their prices rapidly. I have Barnes and Noble Nook. Last week the average e-book was around $9.99 now it is between ~$14 and ~15. One book I downloaded was around $14.00 but using my B&N preferred membership its around $16. The retail cost was around $30.

This suggests that the book publishers are desperately holding on in face of the e-book cost advantage (no printing or distribution costs. The advantage then of the e-book is not having to lug around a bunch of books.

Eventually, I feel that the fall out will weed out the toughest of competitors. But, one or two will hang in there and follow the Jobs approach. They will set up a e-publishing house, allow the authors independence form the publishers, furnish editors, and be able to increase royalties. At That point, the e-book business will flourish.

Of course I flunked out of a MBA program so my ideas are certainly suspect. smile>.

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