

Look! It's the E-reader from that...from that other company!



Last week, Amazon trimmed the price and improved the features of its flagship Kindle DX product and now it's apparently Sony's turn. As of today, the Reader Pocket Edition is $149 (down from $169), the Touch Edition is $169 (down from $199) and the Sony Daily Edition (the DX's primary competitor) is now $299, down from $349. That's quite a bit cheaper than even the Kindle DX's new pricetag of $379, and it tells us everything we need to know about Sony's position in the e-reader market: It's losing.The price cuts on the Pocket Edition and the Touch Edition should keep them competitive against hardware from Barnes and Nobles' Nook (or the Kindle 2), but the fact that Sony is giving ground at the highest end of the market says nothing good about the company's mindshare in the E-Reader market. Products at the high end of any market aren't just there for sale; they serve as ambassadors and symbols of brand strength. When leveraged successfully, the result is a brand like Sony's Triniton technology. Customers come to associate the name with higher quality or a better experience. They're also willing to pay more money for the product, which translates into higher margins for the manufacturer. The last thing you want to do in any field is be forced to compete on price. It works, to some extent, but it's unsustainable in the long run. Either a company runs out of costs to reduce, or it inevitably begins sacrificing quality in the name of keeping a razor-thin margin high enough to stay in business.The reason Sony isn't talking much about these price changes is because the company doesn't want to admit it's being shoved out of yet another market. It's not clear how Sony ranks compared to Barnes and Noble or some of the other players in the market, but it's safe to bet there's just one company Sony is seriously trying outmaneuver. Amazon , meanwhile, may be facing real competitive pressure for the first time thanks to Apple's iPad, but it'll be a few quarters before we've got evidence on how much the two companies are competiting with each other. There's room, theoretically, for multiple E-book readers at the top of the market, but Sony has yet to demonstrate how it intends to get there.