Amazon E-Book Market Share to Fall as Industry Grows

Amazon.com Inc. will likely see its market share of e-book sales slip to 72 percent this year from 90 percent in 2009 as competition intensifies from Apple Inc.�s iPad and Google Inc., Credit Suisse Group AG analysts said.

At the same time, Amazon.com, seller of the Kindle e-book reading device, may boost digital book sales by 83 percent this year to $248 million from $135 million last year, the analysts said in a note today. By 2015, those sales should reach $775 million for a market share of 35 percent, they said.

�We envision a scenario where Apple, Amazon and Google eventually split the market,� Spencer Wang, Kenneth Sena and John Blackledge said.

Industrywide, digital sales will grow to 20 percent of the book market by 2015, compared with about 1 percent last year, the analysts said. They said they expect e-books to represent about 3 percent of total book sales in 2010.

Seattle-based Amazon.com may face more pressure to raise prices of e-books sold for the Kindle after some publishers said they want more control over pricing, the analysts said.

Many new e-books cost $9.99 on the Kindle, compared with the $12.99 and $14.99 some book publishers seek. Last month, Amazon.com said it would cede some pricing control to Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH.

Apple�s Revenue Plan

For its iPad, Apple said it will grant publishers 70 percent of revenue from e-books sales and keep the remaining amount. Macmillan, News Corp.�s Harper Collins and Lagardere SCA�s Hachette say they want system that mirrors Apple�s, Credit Suisse said.

�All other publishers who have signed up with the iPad are likely to follow course,� the analysts said. Apple announced on Jan. 27 that it had agreements with Macmillan, Hachette, Harper Collins, Pearson Plc�s Penguin and CBS Corp.�s Simon & Schuster to sell books through a new online retail store.

Amazon.com, the largest Internet retailer, fell $2.13, or 1.8 percent, to $117.53 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have lost 13 percent this year.