John Paczkowski

Recent Posts by John Paczkowski

Just the Toilet Paper, Mayonnaise and Kindle for You Today, Sir?

Amazon’s Kindle will soon make its brick-and-mortar debut. On Wednesday afternoon, Target said it will begin selling the e-reader this weekend, confirming rumors that have been circulating for a couple weeks.

Kindle will debut at Target’s (TGT) flagship store in Minneapolis, as well as 102 locations in South Florida this Sunday, with wider availability to follow.

This is Amazon’s (AMZN) first foray into the brick-and-mortar retail world and one evidently made under duress. Last week, Barnes & Noble (BKS) began distributing its Nook e-book reader through Best Buy (BBY), and, of course, Apple (AAPL) is now selling the iPad at its own retail stores.

With claim to about 90 percent of e-book sales, according to estimates by Credit Suisse Group AG (CS), the e-book market is Amazon’s to lose. As Credit Suisse analyst Spencer Wang noted earlier this year, the retailer may well see its e-book market share slip from 90 percent to 72 percent in 2010, thanks to some formidable new rivals.

“Near term, we suspect that the iPad and the new eBook agency pricing model, which requires that Amazon increase retail prices to be more consistent with Apple’s pricing, will provide Kindle with the most market share headwind,” Wang wrote. “Going forward, we can envision a scenario where Apple, Amazon, and Google eventually split the market. Therefore, we expect Amazon’s share of eBooks business to fall from 90 percent currently to about 35 percent over the next five years.”

That’s a steep decline–though 35 percent does seem extreme. Little wonder, then, that Amazon is willing to give up its sales exclusivity for the device in an effort to temper the projected loss of market share.