Amazon in the lead, but Kindle competition is coming

Posted Oct 19th 2009 8:40AM by Tom Johansmeyer
Filed under: Apple Inc (AAPL), Amazon.com (AMZN), Sony Corp ADR (SNE)

For retailers, the crucial season is on its way. Blow the Christmas rush, and next year starts off on a miserable foot. Success, of course, also delivers a healthy dose of momentum -- and a little bit of wiggle room, important in what will continue to be a tough economy through at least the first half of next year. For booksellers, now contending with a new variable in the form of digital readers, e-readers will play a major role in defining the winners and losers. So far, it looks like Amazon (NASDAQ: AMZN) is off to a great start, and it will take some genuine innovation for the competition to chip away at its market share.

Barnes & Noble (NYSE: BKS), once the leading names in literary retail, is expected to release its own e-reader this week. It will look a bit like Amazon's Kindle, according to Reuters, but with a touch screen intended to make the reader's experience easier. The price hasn't been disclosed yet, but rumor has it that it'll be higher than the Kindle's $259. BKS is staying mum on its plans in this space. There are others in the space, as well, including IREX Technologies, which is a spinoff of Royal Philips Electronics (NYSE: PHG), Asutek (tk: tk) and a project called FirstPaper that has Hearst behind it.

Amazon is undeniably in the lead, in terms of both technology and market share. And, with 3 million devices expected to be sold this year (doubling in 2010), being out front will certainly be good for some returns. But, there are companies eager to take a shot at the top. Open access may be the way to do it. Right now, Kindle content can only be read on the device itself or on an Apple (NASDAQ: AAPL) iPhone or iPod Touch. Sony (NYSE: SNE), however, is exploring standards that would pose a threat to Amazon's closed system. Also, Rupert Murdoch is keeping an eye on the space, exploring solutions that might be a good fit for News Corp (NASDAQ: NWS).

And then there's Google (NASDAQ: GOOG), a force that can never be ignored.

The search engine giant is kicking around plans for an online e-book store, making it safe to assume that it would benefit from the type of open standard that Sony is chasing.

Amazon is in the lead for now, and it should be for a while. There's no such thing as an untouchable position, though, so it better have its eyes on the rearview mirror.

Tags: amazon, amazon kindle, amazon.com, AmazonKindle, amzn, barnes and noble, barnes and noble incorporated, BarnesAndNoble, BarnesAndNobleIncorporated, bks, booksellers, christmas, hearst, holiday, holiday shopping, holidays, HolidayShopping, inthenews, kindle, phg, philips electronics, PhilipsElectronics, rupert murdoch, RupertMurdoch