I’ve been on the fence when it comes to Amazon’s e-book reader, the Kindle. I own one, and I like the convenience of not carrying books around when I go on business trips. But at home I prefer the organic and almost magical feel of a real book. In other words, I can’t quite make up my mind. For others, however, the issue is not one of digital vs. paper, but price.
In a survey conducted by New York-based investment bank J.P. Morgan, nearly 7 percent of the respondents either owned a Kindle or were planning to buy one within a year. But of those that don’t own one and don’t plan to, a vast majority said it cost too much. In other words, if Amazon priced it right — read: lower — the Kindle could turn out to be a proverbial gold mine. Here are some key findings from the J.P. Morgan survey:
- 37 percent of those surveyed knew about the Kindle.
- 51 percent of those who read 10 books or more every year knew about it.
- Less than 5 percent owned one.
- About 15 percent said they were planning to buy one.
- Of those not looking to buy a Kindle, nearly 75 percent said that they were put off by the high price.
- Nearly 73 percent said that they preferred reading paper books.
All the data points to a good future for Amazon. But the company needs to cut prices — to around, say, $199 for the basic model — before it can really clean up. Amazon’s focus has to be selling more “blades” (aka books) because the device market is about to experience price pressure in coming months as Sony and others launch their e-book readers. (For further information about the e-reader market, check out our research report, Evolution of the e-Book Market, by Paul Sweeting on GigaOM Pro. This needs a $79-a-year subscription.)
While many have questioned Amazon’s move into making hardware, this little chart makes clear just how big Kindle could be for the Seattle-based e-tailer.
J.P. Morgan estimates that if there were 6 million Kindles on the market and their owners bought just two books a month, Amazon could experience a 40-cents-a-share bump to its annual earnings. That’s about $864 million in revenues. Now that is not something to Kindle about.