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Prices and Product Lifecycle – Must All Prices Fall?
An examination of Amazon Kindle, Sony Reader, Barnes & Noble Nook, and Apple iPad

July 2010 Pricing

The classic product lifecycle theory predicts that prices fall as competitors enter. Well, do all prices fall? Similarly, many pundits like to talk about first-mover advantage. Well, does it really exist? An examination of e-reader market demonstrates some serious flaws in a cursory acceptance of these premises. In this article, we look at the price and product evolution of the Amazon Kindle, Sony Reader, Barnes & Noble Nook, and Apple iPad to demonstrate some finer nuances of the product lifecycle.

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“What business are you in?” Theodore Levitt, 1925-2006.

  1. First to market doesn’t make you the winner, the best offering does.
  2. A growing population doesn’t ensure a growing market, an appropriate solution to a real problem does.
  3. Products rarely hold a market to itself, alternatives and substitutes always exist.
  4. The cheapest prices don’t guarantee market share, the best offering does.
  5. The latest hot business concept doesn’t ensure success, preparation and deep insight does.
  6. Efficient operations are not what customers are searching for; efficient solutions are what they need.