by Art Young

Created on: July 20, 2010

Have Kindle digital books reached a tipping point? The president of online retailer Amazon, Jeff Bezos, thinks so.

Since its launch, the giant retailer has sold millions of hardcover books, packaged them and mailed them to readers across the planet. On July 19, 2010, Bezos and his company announced that it is now selling 180 digital books for every 100 hardcover books it sells. Even Malcolm Gladwell might agree that Kindle has indeed reached a tipping point

How Did This Happen?

In a statement from the company, it was noted that the pace of Kindle book sales has tripled since the company cut the price of its eReader device to $189 from $259. This price cut of 27 percent was announced last month in an effort to combat the buying frenzy associated with the new iPad from Apple, which also has the capability of digital reading.

Amazon.com sold more than triple the number of Kindle books in the first half of 2010 as it did in the same period in 2009, the company said. More than 81 percent of its 630,000 electronic books are priced at $9.99 or less. This turn of events is made even more interesting by the fact that Amazon has been in the business of selling hardcover books for more than 15 years, while it has only been selling digital books for the past 33 months.

The iPad vs. the Kindle

Since its April 3, 2010 release of the iPad, Apple announced that more than 3 million units have been sold. This compares to an industry estimate of about 3.7 million Kindles that have been sold in 2010. In its most recent statement, Amazon said that Kindle book sales have exceeded broader ebook sales growth, tracked by the Association of American Publishers through the month of May 2010.

Not to be outdone in this rush to digital, retailer Barnes & Noble has an eReader called the “Nook” and it is also enjoying brisk sales. Some attribute its success to the fact that buyers have the opportunity to test the Nook in the company’s stores.  Sony’s eReader is also realized strong unit sales with what some feel are superior graphics and a basic $300 price.

A Rising Tide of Sales Lifts Everything Digital

One of the most interesting aspects of this dramatic increase in the sales of digital books lies in the fact that, at least for the present time, all of the companies that manufacture eReaders seem to be successful. In spite of the predictions that Apple’s iPad would become the dominant device in the category, this has clearly not been the case.

In addition to spurring large increases of device sales, the competition among the companies making these readers seems to be driving innovation and price cutting. In July 2010, Amazon.com released a version of its larger Kindle DX with sharper contrast and cut its price by more than $100. It plans to introduce an updated version of its smaller Kindle next month with a sharper screen. 

Even in July, the companies in the digital reader category are thinking about how many Kindles and iPads Santa is likely to deliver. With industry analysts predicting strong fourth quarter sales in this category, the momentum from this tipping point should continue.

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