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The Amazon Kindle reader has been instrumental in the growth of the e-book reader and e-book market. Amazon’s original Kindle (now sometimes referred to as the K1) launched in November 2007. The Kindle 2.0 was released in February of 2009 and the large format Kindle DX followed in the summer of the same year.

With a 60% share of the U.S. e-book reader market, the Kindle was the market leader by some way. Sony’s PRS reader, which was released in 2006 before the Kindle reader, took second place with a smaller, but still respectable, 35% share. Other companies realised the potential of the e-book reader market and released or updated their own readers to get a slice of the pie.

Companies such as Plastic Logic, Sony, Barnes and Noble, Bookeen and iRex fought to secure their share of the new and fast developing e-book market, but the Kindle’s dominant market position looked to be impregnable. It was only with the launch of Apple’s iPad that the Kindle had any genuine competition - despite the fact that the two devices are very different.

Since the launch of the iPad, e-book reader prices have dropped quite some way. The Kindle 2.0 is selling for just $ 189 at the moment, a significant reduction over the original $ 359 launch price of February 2009. The large display Kindle DX model, newly upgraded with a higher contrast display, is now on offer at just $ 379, down from $ 489. The ticket price of Barnes and Noble’s Nook reader also fell from $ 259 to $ 199.

Although the iPad seems to have been responsible for a round of price cuts among the manufacturers of e-book readers, the same cannot be said about the price of the e-books to read on these devices. In advance of the iPad’s launch, Apple had struck a deal with the major publishing houses which allowed them to fix the price of their e-book editions at whatever level they liked – subject to the condition that the same e-book would not be made available at a lower price for any other reader. This was seen as good news by the publishers, who had been unhappy with Amazon’s strategy of selling all e-books for $ 9.99 or lower.

Although Amazon may have had to rethink their e-book pricing policy, it’s not a major setback for them. Amazon has always appeared to be more interested in selling books – and e-books – rather than hardware. That’s the only possible explanation for the fact that they have made it possible to read Kindle books on so many different devices. Currently, you can read Kindle books on the PC, the Mac, your Blackberry, the iPod Touch, the iPad and any mobile device which runs Android. So companies like Barnes and Noble, Amazon and now Apple, who have a stake in the future sale of e-books over the life of a reader, can afford to sell the hardware cheaper and profit over the life of the device.

It may be that the future pricing of e-book readers and e-books will tend to favour such companies over manufacturers who are involved only in hardware production. Considering the variety of different devices which Kindle books can be read on, you would have to suspect that, whether or not the iPad becomes the reader of choice for many users, Amazon will continue to have a huge say in the future of books and e-books for the foreseeable future.