E-readers Poised to Withstand Tablet Pressure
Amazon has unveiled the third generation version of its Kindle.
Publishers are expected to rake in big electronic book sales in January, as Kindle and other e-reader owners settle into their new devices after receiving them as gifts over the holidays.
But some critics believe that the success of dedicated e-readers is only temporary and that many consumers will opt for tablet computers such as the iPad in the next few years. Many tablet devices offer e-reader apps. And if the amount of tablets launched last week at the Consumer Electronics Show was any indication, companies are banking on big adoption rates.
In fact, Forrester Research projects that one-third of U.S. online users – or 82.1 million adults – will own a tablet by 2015 , eight times more than the 10.3 million people using them now. But according to principal analyst Jeff Orr of ABI Research, e-reader devices have a lot of life in them and may have more staying power than one might think.
"People aren't replacing their e-readers with tablets; both devices are purchased for two entirely differently reasons," Orr said. "It's similar to vehicles: Cars and trucks both get you to point A and point B, but they meet different needs. Business travelers and avid readers will continue to flock to the e-reader since it's much easier to carry around than books."
Amazon CEO Jeff Bezos has also acknowledged the trend.
"We're seeing that many of the people who are buying Kindles also own an LCD tablet," Bezos said in a recent statement. "Customers report using their LCD tablets for games, movies and Web browsing, and their Kindles for reading sessions."
Bezos credits this to the fact that the Kindle weighs less than tablets, among other benefits.
"It also eliminates battery anxiety with its month-long battery life and has the advanced paper-like Pearl e-ink display that reduces eye strain," he said. "It [also] doesn't interfere with sleep patterns at bedtime, and works outside in direct sunlight, an important consideration, especially for vacation reading."
In contrast, tablets are much more versatile devices, and many use them as a convenient companion to a home computer.
"If you are reading something that is rich with visuals such as National Geographic, you will reach for an iPad," Orr of ABI Research said. "However, some say that the iPad is too big to cozy up to as though it were a book. Plus, tablets remain expensive. You could buy three e-readers for the price of one iPad."
E-readers are also bringing back a renaissance of people who actually want to read: "They are fun, hip and another option to watching TV," Orr added.
The future of print
With the growth of e-readers and e-books, does this mean that printed books and magazines are on the way out?
"Absolutely not," Orr said. "There are certain genres of content such as textbooks with lots of charts and scientific information that are better suited in the print form right now. There is a time and a place for books. Just because the technology is there, it doesn’t mean that a previous format will go away."
Consumers also admit that they aren’t ready to give up certain types of books. For example, a new study conducted by the Book Industry Study Group found that 75 percent of college students prefer print textbooks over e-books. They noted that the look and feel of print text was more appealing to them while studying.
As for which content category is the most likely to shift entirely to the digital world, Orr thinks it'll be comics: "Since comics include dynamic graphics, there is potential for them to become more popular on tablets or even comic-dedicated readers in the future."
Although e-book readers are booming in the United States, the market is still small internationally. According to ABI Research, this will change in 2013 when momentum will pick up worldwide. The firm forecasts that more than 30 million e-readers will ship during that year, almost double the 2012 total.
"Digitized content is the key, and the United States has the most content translated to digital form right now," Orr said. "The companies that provide the devices also maintain tightly integrated content stores that make access easy. In two or three years we will enter a period in which much more digital printed matter will become available in other countries and regions. Western Europe will be first, followed by Eastern Europe and Asia, especially China."
While voracious North American e-book consumers may now own more than one reader so as to ensure a wide selection of content, Orr said the majority of these devices made worldwide are not designed and manufactured here. Most are made in China, even though tablets have yet to make a market impact overseas.
"China does face three barriers to e-book adoption : the lack of digital content, relatively lower levels of literacy and device cost," Orr said. "For market success, an e-book reader must be priced at less than US$100 equivalent. Once these obstacles are overcome, China has the potential to be a major e-book market."
Most e-book readers today are fairly similar in design and performance and competition is fierce. This, along with the need to create an entirely new market, has been driving prices down sharply.
"Success will increasingly depend on the strength of the relationship between reader and content provider," Orr said. "Non-U.S. markets will be less driven by booksellers and more by publishers and perhaps even network operators."