Once almost a one-product market, the e-reader industry is set for a shakeup.
Amazon AMZN-Q announced Wednesday it will make available for purchase the larger, more expensive version of its Kindle e-reader in more than 100 countries, including Canada. With a price tag nearing $500 (U.S.), the device is Amazon's attempt to maintain its stranglehold on the e-reader market.
But the Kindle is about to face some stiff competition as a wave of new e-readers hits the market in the next two months. This week, several e-reader manufacturers announced devices running Google's Android operating system, giving users access to more than one million public-domain books.
And even as the e-reader wars heat up, Amazon and other manufacturers are bracing for the arrival of Apple AAPL-Q 's tablet computer, the most hyped gadget of the year and a product that threatens – if the price is low enough – to render some high-end e-readers obsolete.
Indeed, a slew of upcoming tablets and similar mobile devices with full-colour LCD displays may eventually consume the e-reader market entirely.
“The advantage of LCD is colour; the advantage of e-readers is their battery life and that the text is more readable,” said Rob Enderle, principal analyst at the Enderle Group, a technology research firm.
“There would be a concern if tablets step in before e-reader manufacturers can deal with their shortcomings.”
About six million e-readers are expected to be sold in the U.S. market this year, double the number from last year, according to research firm Forrester. Indeed, e-readers have become such an important category for the tech industry that they have their own dedicated portion of the showroom space at this week's Consumer Electronics Show in Las Vegas.
But a Forrester survey found a significant disconnect between what the majority of consumers would pay for e-readers, and what most of them are currently selling for. According to the survey, 64 per cent of U.S. online consumers wouldn't consider buying an e-reader until the price dropped below $100 – less then half what many e-readers cost and a fifth of the retail price of the Kindle DX, one of the highest-priced products of its kind.
To address that disconnect, several manufacturers are trying to differentiate their offerings this year at CES. The Entourage eDGe, for example, is a dual-screen reader with both an e-reader and a full-colour touch screen that together allow the user to read and surf the Web, among other things. Another product – the Copia series from manufacturer DMC Worldwide – is built around social networking, so users can better share what they're reading. The Skiff e-reader uses stainless steel that allows for a thinner, more flexible device.
Such differentiating factors are also important since most e-readers use similar electronic-ink technology. That's why the availability of content has been a major selling point for companies such as Amazon. This week alone, a number of companies that produce devices based on Google's Android operating system announced their e-readers will have access to about one million public-domain digital books from Google's library.
Around the same time Amazon announced the Kindle DX worldwide edition yesterday, NewspaperDirect, a digital newspaper distributor, announced that it is adding support for the Kindle, boosting the number of newspapers and periodicals available on the device by 1400.
But, ultimately, as tablet makers come closer to shrinking the battery life gap, the survival of e-readers may depend on price. “You want a product in this class to be under $200 – most are over $200. We're still waiting for the perfect device,” Mr. Enderle said. “And at any point in time, a tablet could come in and steal.”
