BREAKING NEWS & VIEWS

Analysis: An eReader Opportunity or Folly?
Thursday, August 6, 2009

According to a new Forrester research study, awareness of the Kindle-like eReader device market is growing quickly, but penetration levels are so low and narrow that there is room for competitors to challenge Amazon. Only 17% of over 4,000 people surveyed by Forrester have never heard of eReader devices, compared to 37% last year. Actual sightings of eReaders in the wild have edged upward only a bit, from 40% last year who had heard of but never seen a device to 38% this year. Only 21% of people who have seen an eReader have actually used one and only 1.5% of respondents own one, compared to .6% last year.

Forrester analyst Sarah Rotman Epps says that Amazon benefited from early adopters because these more affluent business travelers who read a lot had the disposable income and high level of interest that dovetailed nicely with Amazon’s model. But the next wave of eReader customers will be more diverse, more likely female, less tech savvy, less tied to a single e-commerce source like Amazon and more apt to borrow books from others. “I’ve heard from clients that they’re already seeing this shift—more women buying the devices and shopping for eBooks,” says Epps on the Forrester blog.

For companies like Plastic Logic, Barnes & Noble and Hearst, which are trying to develop new versions of eReaders that are more appropriate than the Kindle for magazine and newspaper viewing, this sounds like good news. Amazon succeeded in launching a concept that it doesn’t really own in the marketplace. Dare we suggest that this is the consequence of launching a product and a business model that is clearly half-baked. The display technology for the Kindle is so obviously a first-generation stab that even consumers can see that the device will be obsolete in short order. Compare this launch to the Apple iPhone, which was such a dazzling move forward for the mobile phone industry that all competitors looked like wannabe followers. The limitations of the Kindle are so clear even to its acolytes that the market expects the copycats to look better.

That said, the real hurdle for eReaders is device fatigue. With a laptop and mobile phone already standard equipment for most professionals, where does a dedicated content reader fit in? Much like the Tablet PC introduced many years ago by Microsoft and its hardware partners, the eReader seems like a niche destined to remain in its niche. For most users, content access via their wireless notebook or their phone will be good-enough technology for the purpose. A color, highly portable eReader may prove more aesthetically appealing for viewing print-like layouts, but is that experience valuable enough to readers to merit their carrying a third device? Does anyone believe that consumers or business users will forego their laptop or mobile phone for an eReader? Even if these next-gen devices have full Internet and application functionality, they most likely will have to rely on a touch screen for interaction. As the Tablet PC and its stylus input proved a while ago, this interface is severely limited as a replacement for a full PC.

Technology history shows that in-between devices simply do not succeed. Instead, the devices people have embraced—laptops and phones—expand their usability and functionality to satisfy a wider range of needs. Phones have become larger and smarter, and laptops have become more portable and easily connected. Tablet PCs, ultra-mobile PCs, a decade of eBook readers and even dedicated instant messaging devices have failed in the marketplace because their real challenge is knocking off another piece of technology that people will not sacrifice easily. Unless and until users demonstrate a willingness to adopt another device when most of them find laptops and phones sufficient for most remote tasks, we will remain highly skeptical that the market for eReaders merits the amount of attention and (perhaps desperate) optimism publishers have focused on the platform.



If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com


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COMMENTS
1.
Good article, especially about device fatigue. But an ultra-thin light-weight wireless colour web-enabled document-sized touch-screen eReader will appear by late 2011. And I believe its killer app will be fully functioning eWriting. Then I think we'll see the laptop recede (even retro-steps to home-use ergonomic desktops), with eReaders taking their place in executive briefcases and student satchels. For further thinking on this, read www.inkondeadtrees.com or follow @domjacquesson on twitter.
Posted by @domjacquesson on Thursday, August 6, 2009 @ 01:02 PM

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