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Are E-Reader Sales Being Hit By Cheap Tablet Computers?

Ever since it launched back in November of 2007, Amazon’s Kindle reader has attracted a great deal of publicity. It was a big hit with early adopters, and it wasn’t long before even the general book buying public became accustomed to e-readers in general and the Kindle in particular.

The combination of e-book reader hardware along with the e-books required to make such hardware usable was something that only Amazon had on offer – until Barnes and Noble got in on the act with the Nook reader that is. There were plenty of competing readers, some of which were hailed as “Kindle killers” when they were unveiled, but Amazon ruled the roost with the Kindle and their dominant position seemed to be pretty much unassailable.

However, the recent emergence of smaller, more affordable tablet computers seems to have offered consumers a more versatile option – for not much more money. Whilst there will certainly be some keen book worms who prefer to use a dedicated e-reader, many will prefer to have a device which is capable of browsing the web, watching video and playing games such as Angry Birds.

E-reader sales peaked at just under 25 million units in 2011. In 2012, roughly 15 million were sold. Sales of 10 million are predicted for 2013 and, beyond that, sales are expected to dip below the 10 million mark. Of course, whilst there can’t be much doubt that cheap tablets have had some influence on this slowing of sales, it’s also questionable whether the e-reader boom could continue indefinitely.

E-reader owners are not like smartphone users. They won’t “upgrade” their readers every time a new model comes out (which seems to be about once a year now). They will, if they’re happy with their current readers, continue to use it through two, three, maybe even four upgrades.

However, it’s not all doom and gloom for Amazon and Barnes and Noble. The fact is that, although e-reader hardware sales may be slowing somewhat, sales of the actual e-books themselves continue to grow year on year.

In reality, that’s what Amazon has always been chasing – e-book sales. For many years now, there have been rumors that Amazon actually loses a small amount on each item of Kindle hardware sold. It’s also estimated that Amazon makes about 50% of its Kindle revenue on hardware with the other 50% being provided by Kindle books.

If it’s true that Amazon loses money on hardware, then more of the profit must, logically, be in the sale of e-books. It may be that the Kindle reader has already done its job by allowing the book buying public to first become acquainted with, and then become accustomed to, the concept of e-books as a replacement for printed volumes. As long as people continue to buy Kindle books Amazon, somewhat surprisingly perhaps, may not be too worried whether they choose to read them using an e-reader or a tablet.

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