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Bright Future Forecast For E-Readers

Major developments this year could lead to robust growth in 2010

By James Limbach
ConsumerAffairs.com

November 12, 2009
2009 is likely to be remembered as a watershed year in the evolution of e-books and e-readers with several milestones and product launches standing out as catalysts for change in the market.

At the same time though, Gartner, Inc. says that while the number of electronic readers sold is likely to increase in 2009, it expects 2010 to be the year when e-book readers really become popular consumer electronic devices, culminating in e-reader "mania" for the 2010 holiday season.

"With the entry of new players, such as Barnes and Noble, into the e-reader market and an increase in models from Amazon and Sony, consumers began to have choices in single-purpose e-reading devices in 2009," said Allen Weiner, research vice president at Gartner. "Among the product differentiation points are support for E Ink's electronic paper technology, support for further book formats, and the ability of some devices to allow consumers to purchase content wirelessly and to synchronize content across devices."

Weiner said that while fixed devices -- those built solely for reading, such as Amazon's Kindle and Sony's family of devices -- get most of the attention, book applications on smartphones are an important component of publishers' digital strategy.

However, Gartner believes that it is too early in the evolution of the e-reading market to know whether smartphones will become powerful stand-alone devices for reading books or whether they will complement other devices, such as fixed readers.

"Book applications for smartphones have the potential to become a bridge to other devices such as tablet readers and netbooks," said Weiner. "Apple, for example, could migrate the more than 500 book applications in the iTunes store to a tablet device and Google, which recently announced a browser-based e-reader, could offer applications for Android-based devices of various form factors."

There are a number of hurdles that need to be overcome before e-readers can become more mainstream, such as e-books needing a wider variety of retail channels, ranging from big box retailers and wireless carrier outlets to lifestyle stores such as Brookstone.

More publishers must also be seen buying into e-readers. For example, there has been news about the success of e-book sales of Dan Brown's "The Lost Symbol." However, other noted authors such as John Grisham and J.K. Rowling do not have their works available as e-books.

Gartner said that price will also play a leading role in the future success of e-readers. At the moment it appears that $199 will be the lowest price for fully featured e-reading devices for the 2009 shopping season, but Gartner analysts say prices will need to drop closer to $99 to gain significant consumer traction.

Longer-term, Weiner believes the future is bright for e-readers and is advising publishers to be bullish in the digital distribution of e-books, newspapers and magazines. "It's the perfect time for a trial and to establish relationships with others in the value-chain -- that is service providers and digital warehouses -- that can be positioned to assist in a rapid deployment if the market takes off earlier than anticipated," he said.

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