Amazon to Benefit from Holiday e-Reader Shortages

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kindle holiday red bowThis is a big year for e-Readers. The market finally has three mainstream contenders delivering quality products at the same time with enough buzz in the media to have them mentioned in the same breath as the latest iPhone or netbook. Even if the research hadn’t already indicated it months ago, I’d be inclined to believe that this is a product category poised to pop.

And pop it is. Last week, Sony Corp announced that early demand for the Daily Edition, their e-Reader designed principally as a newspaper reader, have far exceeded their expectations. According to a statement made by Kyle Austin, a Sony spokesman, “The number of people that signed up … to be notified of the Daily’s availability exceeded our expectations over the last few months and we expect high demand now that it’s available.

Indeed, when you try and purchase a Daily Edition on sonystyle.com, it lists the earliest available ship day as 12/18/09, with no guarantee that you’ll actually have it in your hands before Christmas.

Barnes & Noble has also reported that the Nook is already out of stock just weeks after hitting the market, and they won’t be fulfilling any new orders until January at the earliest. When you consult BN.com, the earliest expected ship date is January 4th, well out of reach of holiday shoppers.

“Supply is short because the companies rushed the announcement of these two products, and the reality is they’re not ready for holiday primetime,” said Sarah Rotman Epps of Forrester Research, in a story reported by the Financial Times.

Not to step on any particular analyst’s toes, but I’m a little dubious about the notion that two experienced multinational corporations accidentally underestimated their market and built an inadequate supply line. Anybody who has ever seen a Nintendo or Apple product launch in recent years should be well-acquainted with the practice of manufacturing a shortage of a product to build a viral buzz. I think that’s precisely what’s going on here.

Buzz or no buzz, Amazon is definitely in a position to reap the benefits of a holiday season more or less unopposed. The Kindle has already come to be recognized as the principle brand in the e-Reader product category. Combine that name recognition with a robust performance this holiday season, and Amazon should be able to retain their status as the 800-pound gorilla of e-Readers.


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