Are e-readers doomed?
A research note earlier this week from IHS iSuppli suggested that, after years of solid growth, the e-book reader market was “on an alarmingly precipitous decline” thanks to the rise of tablets. The firm suggested that e-reader sales had declined from 23.2 million units in 2011 to 14.9 million this year—around 36 percent, in other words.
“The rapid growth—followed by the immediate collapse—of the ebook market is virtually unheard of, even in the notoriously short life cycle of products inhabiting the volatile consumer electronics space,” read the note. “Unknown to consumers before 2006, ebook reader shipments skyrocketed for the next few years after first thrilling readers with a portable device they could take anywhere.”
That was before the rise of tablets. “Single-task devices like the ebook are being replaced without remorse in the lives of consumers by their multifunction equivalents, in this case by media tablets,” the note added. “And while other uni-tasking devices—like digital still cameras, GPS systems and MP3 players—also face similar pressures and battle dim prospects ahead, all have had a longer time in the sun than ebook readers.”
In order to survive, IHS iSuppli predicts that e-reader pricing will need to drop still further, possibly to less than at-cost. That could block off the e-reader device market to smaller firms that depend on hardware margins to survive. Whether a drastic price dip would affect Amazon, which markets the bestselling Kindle line of devices, is another question entirely; the online giant’s business model is built on the idea that hardware can be sold cheaply, with the bulk of profits made from selling content such as e-books.
But even Amazon and Barnes & Noble, the reigning champs of the e-reader marketplace, have increasingly embraced full-color tablets as the best medium for selling their digital products. Backed by enormous cloud-based libraries that offer far more than just e-books, these devices are altogether more versatile than grayscale e-readers, provided their users want to do more than just read plain text. Those companies’ increasing emphasis on their tablets might not bode well for e-readers as a whole.
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