I don't think that traditional brick and mortar economic's really work for a subject like e-books.
The idea that because few people own PPC devices and therefore the pool of available purchasers is small equates to higher prices for product does not hold up when compared to other existing PPC markets.
Because of the small footprint for installed software, the vast majority of PPC software is distributed through online retailers and available by download. Much the same as e-books. Yet, most software available for PPC costs under $30, far below this price in most cases. Similar software products for the PC cost several times as much.
The smaller user base of PPC's versus desktop systems does not raise the price of PPC software.
And yet the same tradeoffs also exist, PPC software is less powerful and less feature rich than desktop software. However PPC software has the "go anywhere", "always available", features that can't be matched in desktop systems.
I guess part of the equation here has to be "why do people buy books?"
Hard Cover - First availability; pride of ownership. A hardcover is something that will last. Your grandchildren might read the same Hardy Boys hardcover books that your dad handed down to you as a boy.
Paperback - Price; flexibilty. A paperback is not expected to last. You often take it places and abuse it in ways that you would'nt with a hardcover book. When finished you may keep it, or pass it along or resell it.
Magazine - Price; entertainment value; timeliness. Almost certain to be disposed of. Extremely limited duribility.
E-books - Portability; first availability. In no other way does an e-book truely supass any of the traditional print media. It's durability is questionable, it is limited to one or two devices, you cannot transfer ownership. It is unlikely your grandchildren will be reading any of the files you download today. In many ways e-books are much like magazines. They fulfill an itch to read a particular piece of work, and are expected to be disposable.
THE FIRST E-BOOKS:
In the early 1990's a multi volume set of the Encyclopedia Brittainica sold for between $1500 - $2000 a set depending on the binding quality. $500 - $600 of this price went solely to pay the sales commission on the product.
Today there are virtually no bound enclyclopedia's sold, Microsoft Encarta is available for around $50 and is given away free with most new computers.
The Encyclopedia Brittainica web service is available for unlimited use for $60 a year.
Some info reported from:
www.capmag.com/article.asp?ID=807