When cool products cost a lot of money, there’s plenty of opportunity for other manufacturers to introduce less-cool competitors–or ones with fewer features, at least–at lower prices. But what happens when the cool products get radically cheaper? We’re seeing that entertaining scenario play out in the e-reader market.
When bookstore behemoth Borders announced in March it would start selling a basic reader called the Kobo for $150, it was $110 less than the Kindle and Nook. And even though it didn’t have a 3G connection–it made you buy books on a computer and sync them via USB–it was a deal.
But then Barnes & Noble set off e-readers price wars by cutting the price of the Nook from $259 to $199 and introducing a $149 Wi-Fi-only model. Amazon knocked the Kindle’s price down to $189 a few hours later–and last week, it shipped the third-generation Kindle in both a $189 3G model and a $139 Wi-Fi only one.