The world's largest Internet retailer
) will start shipping the front-lit Kindle Paperwhite around the
end of this month, intensifying the competition with
Barnes & Noble
) Nook Glowlight.
The Paperwhite is Amazon's fifth generation e-book reader.
Amazon went back to the drawing boards and made certain changes to
the e-book reader. For example, Amazon itself develops the display
in Paperwhite. The higher contrast ratio makes Paperwhite a visual
treat for readers. On the hardware front, Amazon removed all the
buttons except the home button. This has made the device lighter
However, Barnes & Noble took a different route as their
device has buttons on either side of the screen. Nonetheless, both
these devices are backlit, which helps to brighten up the screen.
Also, one can reduce or increase the light while reading.
On the connectivity front, Paperwhite supports both WiFi and 3G.
Barnes & Noble on the other hand has equipped their Nook with
just WiFi. Amazon seems to be far ahead in the race as the
collection of Amazon's e-books is the largest. Amazon also attracts
new authors and has its own digital publishing unit, both of which
further promote its platform.
Amazon's constant upgrading of its e-book reader is surely
benefiting customers. However, while Amazon may have the best
) certainly has the best tablet. Despite the fact that the Kindle
has acquired many new features over the years, its not a full-blown
tablet yet. Therefore, given that the tablet market is far larger
than the e-reader market, Amazon's Kindle is unlikely to catch up
with Apple's iPad any time soon. Additionally, the market
continues to heat up with other tablets such as
) Surface and
Analysts are expecting the e-book market to reach $5.2 billion
by 2016 in the U.S. alone. The e-book market has witnessed
unprecedented growth, as both authors and readers have benefited
from it. Amazon, through its Kindle reader and Kindle apps is
currently the leading seller of ebooks. However, if the company is
unable to build further on its Kindle or slash prices drastically,
it could see its share of overall book spending decline. In the
first quarter of 2012, the company accounted for 29% of book
spending in the U.S., followed by Barnes & Noble at
However, current trends seem to indicate that consumers
increasingly prefer multi-purpose devices (aka tablets) for
book-reading, which means there is a real danger that interest
could move from reading to watching movies or listening to music.
Tablets have changed the scenario of reading a book as now
consumers have access to their libraries of music, movies and books
anywhere and at anytime.
Amazon's second quarter results were more or less within
expectations. Reported revenue of $12.83 billion was down 2.7%
sequentially and up 29.5% from the year-ago quarter. This was
better than the guidance for the quarter of $11.9-13.3 billion
(down 4.4% sequentially, or up 27.1% year over year at the
mid-point) and in line with consensus expectations. Year-over-year
revenue growth was 32%, excluding an unfavorable currency
Currently, Amazon has a Zacks #3 Rank, which implies a Hold
rating in the near term.
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