Sony concedes the U.S. eBook reader market

Today, Sony introduced three new eBook reader models that are upgrades of existing models. Unfortunately, they seem to have been designed in a vacuum where Amazon and Barnes and Noble don't exist. All three of the new models have the same improved E-ink displays as the new Kindles, along with touch screens and a base memory capacity of 2GB. Here's more on each model (all prices in US$):

• The Reader Pocket Edition has a 5" display. Memory can't be expanded beyond 2GB, and it has no wireless capabilities. The list price is $179.

• The Reader Touch Edition has a 6" display. Memory can be expanded with up to two 16GB memory cards, and it can play MP3 and AAC audio files. It also has no wireless capabilities. The list price is $229.
• The Reader Daily Edition has a 7" display, the same memory expansion capabilities as the Touch Edition, and has both WiFi and 3G wireless connections, The list price is $299.

None of these models is competitive with either the Kindle or nook. The WiFi Kindle is $139 and has a 7" display; the 3G Kindle is $189. Sony's higher prices are clearly unsustainable in the U.S., and I think that the company will de-emphasize the North American market and focus on markets where Amazon isn't yet selling Kindles. Sony's press release confirms this:

“Today, we’re excited to announce not just the availability of the Reader Touch Edition and Pocket Edition in the countries we already serve but also plans to expand the Reader line to previously untapped markets,” said Steve Haber, president of Sony’s Digital Reading Business Division. “We take a thoughtful approach to country expansion, including Italy, Spain, Australia, Japan and China, working with local bookstores to ensure content is compatible, relevant and in the appropriate language for each market.”

Amazon is just now beginning to expand distribution of its Kindle to Europe, and Sony already has strong distribution deals with the biggest book retailers there. So, Sony will emphasize reader sales outside North America for as long as its products remain viable.

But what about North America? Sony also announced that it's developing software readers for iOS and Android. I expect to see a Sony Android tablet before the end of the year, and Sony's eBook efforts in North America will shift to selling eBooks on its own tablet(s).