Summary
The largest contributor to eBook reader price is profit for the proprietary eBook vendors. The cost of chips is negligible. Marvell's commendable advances will themselves have only limited impact on eBook reader prices
Analysis
$100 is the magic number at which new gadgets tend to take off with mainstream US consumers. eBook prices will likely fall to $100 in the near future. However, this article gives undeserved credit to the chips.
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The largest cost in the bill of materials (BOM) of an eBook reader is its display, likely followed by its battery. Tough competition among chip vendors keeps production volume costs for eBook reader chips at about $10.
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When eBook readers come to market that are not tied to specific content providers (e.g. Kindle tied to Amazon) then competition will drive prices down. The price of eBook readers today is in content provider lock-up. It's not in the chips.
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The largest cost in the bill of materials (BOM) of an eBook reader is its display, likely followed by its battery. Tough competition among chip vendors keeps production volume costs for eBook reader chips at about $10.
.
When eBook readers come to market that are not tied to specific content providers (e.g. Kindle tied to Amazon) then competition will drive prices down. The price of eBook readers today is in content provider lock-up. It's not in the chips.
Marvell's commendable advances will themselves have only limited impact on eBook reader prices.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
