Worldwide connected e-reader sales to end users are forecast to total 6.6 million units in 2010, up 79.8 percent from 2009 sales of 3.6 million units, according to Gartner. In 2011, worldwide e-reader sales are projected to surpass 11 million units, a 68.3 per cent increase from 2010.<\/p>\n
The market for e-reading devices — portable devices that use an E Ink, e-paper or similar display technology — has become crowded and is at risk of commoditisation due to developments in adjacent markets, such as those for media tablets, according to Gartner analysts.<\/p>\n
“The connected e-reader market has grown dramatically during the past two years, driven by sales of Amazon’s e-readers, primarily in North America. This is the dominant region for e-reader sales, and we predict that it will account for sales of just over 4 million units in 2010,” said Hugues De La Vergne, principal research analyst at Gartner.<\/p>\n
North America will remain a key market through 2014, although its dominance will decline significantly as regions such as Western Europe and Asia\/Pacific become the leading locations for growth. Growth in North American and other markets will remain constrained by the success of media tablets, such as the Apple iPad.”<\/p>\n
Although three vendors dominate today’s e-reader market (Amazon, Barnes & Noble and Sony), new competitors may well appear in the future with low-cost devices subsidized by content owners, said Gartner.<\/p>\n
They added that large consumer electronics and PC firms such as HP and Dell are also trying to position themselves strongly in the market for connected consumer devices.<\/p>\n
E-readers have carved out a solid niche in the consumer electronics market due to their portability, long battery life, solid display technology (although most lack colour screens) and relatively inexpensive retail prices.<\/p>\n
According to Gartner the cannibalisation by media tablets represents the biggest threat to e-readers.<\/p>\n
Media tablets can offer a compelling experience for electronic magazines and newspapers, due to their widespread adoption of displays that show color and support full-motion video. By incorporating e-reader functionality, media tablets can perform many different functions, including supporting e-reader applications.<\/p>\n
“With media tablets offering more functionality, e-reader vendors need to target avid readers who may see the value of a stand-alone device that performs particularly well,” said Allen Weiner, research vice president at Gartner.<\/p>\n
“E-reader vendors will also need to offer lower prices than more fully featured media tablets. This will entail smaller profit margins and potential hardware subsidies at retail, and\/or the ability to obtain lower-priced components. We think few end users will buy both an e-reader and a media tablet, so it is important that e-readers retain a price advantage.”<\/p>\n