At this time last year, the market for e-book readers was buoyant. Following the enormous success which Amazon had achieved with its Kindle reader - first with the Kindle 2.0 in February of 2009 and then with the large display DX model in the summer of the same year - a small army of personal electronics firms seemed to be developing, releasing or updating e-book readers of their own in order to grab a share of the new and rapidly developing market.
Sony and Barnes and Noble were working hard to get their new readers out in time for the 2009 festive season and Plastic Logic, Asus and a host of others were rushing to get their readers to market as fast as they could. For the first time ever, the Computer Electronics Show, which took place in Las Vegas during early 2010, featured a dedicated area for e-book readers. E-book readers were a hot developing market.
However, just a few months later, it's a very different scene. The price of e-book reader hardware has been in free fall. The latest third generation Kindle now has a Wi-Fi only entry level model available for only $ 139 - Less Than 40% of the $ 359 price which the Kindle 2.0 launched. The price of the Nook reader from Barnes and Noble has also been slashed to just $ 149 - and a further cut before the festive season arrives seems highly likely.
A number of e-book readers which were in development - including Plastic Logic's Que - have been abandoned. The market seems to be entering a new phase in its development - and whether there is any place in it for pure electronics manufacturers or not is open to debate. The Amazon business model is very well suited to selling lower priced readers and making a profit on the subsequent sales of Kindle books. Barnes and Noble could employ a similar strategy - but whether or not they could make use of economies of scale in the same way that Amazon can is debatable.
Clearly the release of Apple's iPad tablet computer has been an important influence in this. E-book reader prices were always going to fall - but the appearance of the iPad definitely seems to have jollied things along quite a bit faster. However, bearing in mind the fact that the new third generation Kindles sold out shortly after they were released, the iPad doesn't look like the Kindle Killer that it was expected to be.
Aside from the debate about e-ink displays being better to read on than back-lit screens, there is - for the moment at least - enough daylight between the Kindle price and the price of the entry level iPad to make the Kindle the more attractive choice for anyone whose chief interest is reading books. The iPad's monthly connection fees will be a stumbling block for many customers.
It does look like there is sufficient room in the market for both the Amazon Kindle and the iPad to rub along - for the short term future at least. Other e-book reader manufacturers, including Sony and Barnes and Noble, seem destined to struggle as hardware prices will continue to fall.
Check out the Amazon Kindle for yourself and view the wide range of Kindle accessories available to help you personalise your new reader.