Amazon's eBook slice shrinks but the pie grows

According to a research report out this week from Credit Suisse analyst Spencer Wang this week, market leader Amazon (AMZN)’s dominant share of the exploding ebook market is about to go into free-fall.

Wang predicts that Amazon’s current 90 percent market share will plummet to 35 percent over the coming five years, thanks in part to the arrival of Apple’s iPad, plus an e-reader from Google that is apparently closer to launch than most observers thought.

“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,” wrote Wang. “Going forward, we can envision a scenario where Apple, Amazon, and Google eventually split the market.”

Of course, this kind of forecast needs to be viewed in the context of the rapid growth of the overall market in eBooks, which according to Wang will bring Amazon more than triple the sales from $248 million to $775 million over the same five-year period. FULL STORY