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A report today in The Wall Street Journal (subscription required) reveals that Sony Corp. (NYSE: SNE) is set to launch two low-priced e-readers, which could prove to be stiff competition for the wildly popular Kindle devices sold by Amazon.com (NASDAQ: AMZN). Sony's latest entries in the e-reader market, known as the PRS-300 and PRS-600, will be priced at $199 and $299, respectively. By contrast, the cheapest Kindle will run you $299.
Sony's budget-friendlier devices are slated to hit store shelves later this month, with the Journal citing Best Buy (NYSE: BBY) and Wal-Mart Stores (NYSE: WMT) as two retailers planning to offer the e-readers. Meanwhile, the low pricing isn't limited to the gadgets themselves; Sony will also drop the cost of best-selling titles from $11.99 to $9.99, matching the deal offered by Amazon.
In the wake of this news, AMZN shares are off more than 2% -- but SNE is also fractionally lower at last check. Blame it on losses in the broader market, perhaps, but some pundits are already expressing their doubts that Sony can maintain its competitive pricing without putting its bottom line at risk.
In any event, Sony's devices have a few disadvantages as compared to their well-known rival. Unlike the Kindle, the new PRS readers do not feature wireless connectivity, and must be hooked up to a computer in order to download new titles. Additionally, titles purchased from Sony's store can only be viewed on a Sony device, whereas Kindle titles can be accessed through Apple's (NASDAQ: AAPL) popular iPhone and iPod Touch devices.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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