Introduction
E-book products are of great demand in the modern world as people shift to portability and efficiency as well as privacy. E-book devices are highly encrypted so as to allow for privacy along with subscription from members. These products are divided into 3 broad categories, e-book devices, such as PDAs, e-book readers, tablet PCs, pocket PCs, e-book software and subscriptions among others.
Therefore introduction of a new e-book product will send masses to it with several people leaving their usual products. This would have a tendency to increase the price of new product as demand soars for it. The prices for other competitor products will reduce much as their demand amid a constant supply.
This paper will examine the effect of introduction of cheap e-book products like e-book devices on five different markets. The paper will then consider five of the affected markets along with their demand and supply curves as well as chain events as would be shown in the diagrams below.
Market 1: Dedicated eBook devices
Introduction of anew eBook reader in the market will cause a shift in demand for eBook readers, numerous people will go for the new device as some try to get acquainted with it. Most people use dedicated eBook devices to access books online, and this will be affected by the new product.
Most people would shift to the cheaper eBook reader, leaving the conventional devices. This will affect the demand side of dedicated eBook readers such as rocket eBook, softbook and the likes. In fact, those who are likely to remain are their dedicated customers.
The quantity demanded for these dedicated devices will reduce causing price reduction. This will be a negative effect on the manufacturers and sellers while at the same time an advantage to customers since competition between dedicated device manufacturers will continue. The following graphs will show the demand and supply curve before and after introducing a new eBook product.
Graph of demand and supply curves for dedicated ebook devices: before introduction of ebook product
Graph of demand and supply curves for dedicated ebook devices: after introduction of the cheap eBook product
As can be observed from the graph above, due to decrease in demand for dedicated eBook devices, there will be more goods supplied than demanded, leading to decrease in price for dedicated eBook devices.
Market 2: PDAs
There are several subsidiary devices that support eBook software, these includes computers, table PCs, pocket PCs as well as PDAs, among others. PDAs are not designed specifically for eBook software as dedicated eBook readers are, but it serves the same purpose when eBook software is installed.
These PDAs include eBookman, Handspring visor and Palm Handheld, among others. Most users would prefer multitasking so that they may employ the use of PDAs for eBook as well. In this regard, any changes in eBook products will definitely affect sales of PDAs in either a positive or negative way.
Introduction of a new eBook product will equally affect the sales of PDAs, for instance in this paper, there was an introduction of a cheap eBook reader, potential PDA buyers would be swayed by the new product thereby decreasing demand for PDAs.
When this happens, equilibrium will shift to the left. Decreased demand for PDA will lead to fewer sales. The otherwise constant supply will seem more and thus the price for PDAs will decrease as shown in the graphs below.
Graph of demand and supply curves for PDAs: before introduction of ebook product
Graph of demand and supply curves for PDAs: after introduction of the cheap eBook product
As can be observed above, demand for PDAs will decrease with the introduction of a cheap eBook reader, the equilibrium will shift to the left, and thus there will be decrease in price for PDAs.
Market 3: Pocket PCs
Just like PDA’s, once eBook reader software is installed, the Pocket PCs act as eBook devices. Pocket PCs are multifunctional and people see it as a way of multi tasking. It saves customers on time and cost, moreover, these pocket PCs have very high speeds and can process applications very fast.
Since pocket PCs are also utilized for this purpose, changes in eBook product will affect it but not as it affects PDAs and Dedicated eBook reader devices. Introduction of a cheap eBook reader will see people rush in the market for it, in effect reducing sales for pocket PCs although not at a magnitude of PDAs and other eBook readers.
This is because demand for pocket PCs is affected by other factor apart from eBook products. The effect will be reduction in demand for pocket PCs from eBook readers, which will lead to reduced prices of pocket PCs. This is reflected as shown below.
Graph of demand and supply curves for Pocket PCs: before introduction of ebook product
Graph of demand and supply curves for Pocket PCs: after introduction of the cheap eBook product
Introduction of cheap eBook reader will reduce demand for pocket PCs, thereby decreasing its prices as shown the graph above.
Market 4: eBook Software
Every electronic device must be commanded in some way to perform a specific task; this cannot be done without help of an interface that can execute commands from user to the machine. Such processes require use of software.
EBook software acts as interface between the user and device by transmitting user friendly commands to machine. With the help of this product, people can access eBooks and make any changes thereafter. It is therefore very essential and is also affected by changes in eBook readers.
Introducing cheap eBook readers into the market will increase the number of customers using eBooks; this will have a positive effect on sale of software as many people will buy them for their respective devices.
Demand for software will increase affecting the demand positively. With high demand for software, equilibrium will shift to the right and prices will increase as shown in the graph below.
Graph of demand and supply curves for Pocket PCs: before introduction of ebook product
Graph of demand and supply curves for Pocket PCs: after introduction of the cheap eBook product
Introducing a cheaper eBook reader will stimulate growth in eBook reading, leading to more sales of eBook software; in essence, it will increase demand for software and shift equilibrium to the right. The cost of software will then increase, reflecting the pressure placed by demand.
Market 5: eBook subscription
In most cases, access to eBooks is usually restricted and more often require subscription depending on the webmaster or author’s method. Some subscriptions are charged while others are free. Changes in eBook products influence the number of subscribers.
And for subscribers to access eBooks, they need the devices named above. Therefore, introduction of cheaper eBook readers will induce more subscribers as more people will be able to access eBooks through the devices. There will be high traffic on those websites, meaning more demand of eBooks, leading to increase in subscription fees. The diagram below illustrates this.
Graph of demand and supply curves for eBok subscriptions: before introduction of ebook product
Graph of demand and supply curves for eBook subscriptions: after introduction of the cheap eBook product
Introducing a cheaper eBook reader will lead to more subscriptions as more people would be able to access the internet through the devices. This will increase traffic in those website thereby increasing the prices (subscription fees).
Conclusion
Changes in eBook products can have either a positive or negative impact on various markets of related products. EBook products affect subscription fees, sale of pocket PCs, PDAs and dedicate eBook devices like Rocket, among others.
Introducing cheaper eBook readers will reduce demand for direct competitors like Rocket, Pocket PCs, as well as PDAs while, it will increase demand for eBooks as well as eBook software since more customers will be able to access the internet.