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Amazon Kindle biz boosted by... Apple iPad

Tablet users turn to retailer for more, cheaper books

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Amazon's Kindle e-book reader is doing rather well - and it's all down to Apple.

US investment house Cowen and Co. has forecast that Kindle sales will rise 140 per cent during 2010, with shipments hitting 5m units.

Amazon's e-book business will do even better: it will grow 195 per cent to $701m, Cowen forecast.

It's e-book sales that matter, since Amazon is believed to be subsidising Kindle prices out of the money it makes from selling digital books. The more e-books it sells, the lower it can take the price of the Kindle.

The latest version now costs only £109 - the one with free 3G connectivity is only £40 more - well below the cost of rival devices with comparable technology, such as Sony's PRS-350 Reader.

Lower hardware prices lead to higher sales.

The iPad contribution comes from the iOS apps Amazon has released. Cowen spoke to 500 iPad owners and found that a third of them prefer to read e-books using Amazon's app. They said the online retailer provides a better selection titles than Apple's own e-book store and app, iBooks. Kindle prices tend to be lower too.

Crucially, the survey results suggest that it's those user who buy more books - 25 or more a year - who are more likely to favour the Kindle app.

Says Cowen: "The results support our view that the iPad is not having a negative impact on Kindle device or e-book sales. In fact, we think the adoption of tablets will boost Kindle e-book sales, especially since 20 per cent of current Kindle e-book buyers do not own a Kindle device."

It reckons Amazon will account for 76 per cent of e-book sales to Apple's five per cent, though in five years' time those shares will have shifted to 51 per cent and 16 per cent, respectively.

That's in the US market, of course, which saw digital sales hit 11 per cent of total book sales in July. That's a level way in excess of sales here. It marks a jump from seven per cent in June, showing there is a real interest in using e-book readers on summer holiday trips. ®

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