Interesting analysis by Baldur Bjarnason (@fakebaldur), of course, the mistake he makes is to assume the ebook market is in anyway different to any other market:

Your suppliers have no concern for the viability of your business and are quite willing to ruin it for little to no personal gain. Your competitors have corporate parents who are willing to run the ebook retail unit either at a loss or break-even and that’s without taking their substantial R&D investments into account, most of which are focused on developing or protecting vertically integrated silos, not innovations that actually benefit the customer.

In short, it’s a sector that desperately needs new, competent, and innovative entrants but is too irrational to sustain any sane business development or investment.

via Caught between madmen and mercenaries | Studio Tendra.