New Sony E-book Reader Should Worry Amazon

(MoneyWatch)  A mere 12 days ago, not even a fortnight, while looking at increasing competition on the e-book front, I mentioned the rumors that Sony would announce an e-book reader with wireless capability sometime in September. It seemed "odd" at the time, as the company had just announced two other models, but perhaps it wanted to emphasize all the releases without one drowning out another. Apparently that was the plan, though the rumor was off in timing, as the new product was unveiled yesterday. And there are some interesting features that could offer some competition for Amazon.

First, it's not as though the wireless Sony models have been ineffectual, as it has still sold 400,000 compared to 600,000 Kindles. It already had some competitive advantages for many consumers:

• It was already offering a pocket model and a touchscreen model, focusing on the idea of portability in one case and drawing on the growing popularity of touch interfaces in the other.
• Even though the Kindle supports a number of formats, Amazon didn't push the compatibility because the company clearly wants to own the publishing marketplace. Sony emphasized common formats, such as ePub and PDF, to position itself as the "open" choice.
• Sony Reader products has been available worldwide, while the Kindle has been available only in the US. That single reason could explain how Sony has been able to fare relatively well. Amazon has international presence, but Sony is a truly global company, planning and marketing with the world in mind.

Now Sony has added yet another choice that pokes at some of the major weaknesses of the Kindle. For one, it offers wireless, only through AT&T -- think of the associations with the iPhone -- rather than through the weaker Sprint. My guess is that AT&T could provide a better marketing cache.

According to some in the education field, Sony products are much closer to what schools can use than Amazon. That means that the former has a head start in a market that is traditionally a seeding ground to get future consumers accustomed with a company's products and hopefully develop an ongoing buying relationship.

Sony's continued emphasis on common formats means that it encourages competition, meaning chances of better prices and greater selection, than is possible with Amazon alone. The new products will even let users check books out of the library. And Sony's planning to have the wireless model available in Europe, unlike Amazon.

I've written before about how Amazon seems to let hardware subsidize media prices, but increased competition both on the hardware and book distribution fronts, including the expanding availability of free books, will make the continuance of such a strategy difficult. And even though Amazon is big and Sony has been clumsy in its business, the latter still dwarfs the former. More importantly, Sony has decades of experience in working the channel as a vendor, meaning that it can get products out to far more potential buyers.

Image courtesy Sony.