Kindlenomics

Amazon has announced that it will start shipping the Kindle e-reader in the next few days. Leander McCormick-Goodhart is doubtful about whether this spells the end of books. The Kindle device is part of an increasingly contestable market space whose size is set to rise sharply in the months and years to come. I have added a few links to Leander’s blog post. According to Chris Nuttall in an FT blog last month “there are now more than 45 e-reader models available worldwide, according to E Ink, the dominant technology provider for their displays.”

Imagine holding hundreds of books in the palm of your hand.

The Kindle has just gone global. Amazon’s electronic reading device, capable of downloading books in minutes, is going to be shipped to more than 100 countries worldwide as of October 19th.

This move has pitched Amazon against a number of competitors in the growing market for digital reading. Competition includes Sony, Royal Philips Electronics and China mobile which announced only last month that it was intending to release a range of digital reading devices.

Does the rise of the e-Reader spell the end of the book as we know it?

Some argue that the proliferation of digital e-reading devices demonstrates what Economist Joseph Schumpeter called “creative destruction”. Schumpeter argued that long-wave economic cycles were caused by a step change in technology or a significant innovation. Innovation is a significant source of market power and entrepreneurs can therefore compete with existing firms in an industry, eroding their profits and market share and eventually becoming more powerful than them. “Creative Destruction” describes the process of industrial transformation, from a competitive to a monopolistic market and then back to a competitive one. Just as the CD replaced the tape, will the Kindle replace the paperback book?

I do not think so- or at least for the time being. Currently, the Kindle is a prohibitively expensive $279, one can only download books onto the Kindle in English and several major publishers have resisted licensing agreements for their books to be sold. Perhaps in 20 years, when paper can only be obtained on the black market as there are no more trees, necessity will force a change. Three million Kindles are forecast to be sold during 2009. Personally, I like flipping the pages of books in my hand. I hope that paper books will be around for a while longer.

Suggestions for further reading

Princeton students dislike Kindle (Telegraph)

Amazon to launch Kindle in the UK (The Times)

Jason Perlow - Kindle Economics