Could a Drop in Kindle Sales be in the Cards for Amazon?

According to Credit Suisse analyst Spencer Wang, the hold of the Amazon Kindle on the ebook market is going to drop drastically from 90% to 35% in the next 5 years. This prediction is based on the iPad entering the market and the ebook agency pricing model. The pressure that Amazon is receiving to increase ebook prices to be more comparable to Apple’s pricing, and Google entering the market with the GooglePad and ebook store may eventually split the market.

Amazon owns the market because of a few factors. The Kindle is popular, and holds a devout following. The Kindle Store adds to this popularity, although the ebook agency model has caused quite a disruption. Unfortunately it looks as though it is out of Amazon’s hands. Publishers are slowly following suit.

Additionally, Apple’s iPhone and iPod Touch apps are other potential market changers. These apps enable users to perform searches, compare prices, read reviews and make purchases on Amazon. We also can’t forget that Amazon acquired Stanza, another app that allows users to browse over 100,000 books from their iPhone.

Granted, the ebook reader competition is getting tough, but new ereader technology is evolving at such a fast pace, that there are options for Amazon to continue the Kindle evolution. The recent Amazon-Touchco collaboration that hit the news is a perfect example of Amazon’s perseverance in the ereader market. Amazon may even consider Qualcomm’s Mirasol technology to eliminate the use of e-ink.

In order for Amazon sales to drop to 35%, a drastic change in the market would have to occur. The truth is Amazon dominates this market in many channels, and Amazon has a tight hold on the current market with loyal consumers. They obtained this by being offering one of first marketable ereaders.

As for the iPad, it is a multi-tasking gadget. Obviously, it is going to make its mark on the ereader market, because Apple too has a devout consumer base, and buyers are looking to the iPad as a device that can do many things. But there will be a market of individuals who simply want to purchase an ereader.

A bit of healthy competition never hurt. Why? Because it is business and these challenges are what push companies to find the latest and greatest technology. For now, Amazon is holding its own with its domination of the ereader market through the Kindle, and hopefully, will continue to do so with Kindle evolutions.