We examine the burgeoning e-reader segment

The good e-book

ONE OF THE most exciting new product segments to emerge in recent years has been the e-reader. Although the idea of a tablet-style reader device has been around since before Star Trek first aired, the technology to realistically bring the devices to the mass market has only recently developed to a point where the end-consumer would consider it over the simpler, more readily available, old-fashioned book.

The sudden convergence between technology and pricing has enabled e-readers to slowly but surely work their way in to the public consciousness and this has excited a number of vendors, who now seek to gain a foothold in this emerging market.

“I think it’s the last thing in our lives that hasn’t been digitised,” muses Sony’s head of Networked Communications, Anthony Brown. “To one degree or another, everybody has books in their home and there now aren’t many media formats that remains in their traditional form.”

Andy Gordon, managing director of e-tailer Advanced MP3, also feels that the interest in e-readers is as a result of bringing traditional media into the 21st Century.

“I think it’s been the first time anyone’s taken the technology and introduced it to the wider market, which is obviously massive business,” observes Gordon. “I think people like the fact that it’s using the latest technology and applying it to something that literally millions of people use around the world – everyone can see a use for it.”

Widget sales director Bart Hoorntje sees a more practical explanation for the interest in e-readers: “In a nutshell, the devices have become more affordable, the technology has progressed to the point where people don’t mind reading an e-reader instead of a book, and the battery offers a better charge life than any other device on the market.

“Additionally, there’s a lot more development in the pipeline – such as wireless downloads and integrated web browsers – so over time it’ll become a multi-function device.”

The key breakthrough has been the development of e-ink screens. It is this device that has enabled ‘glare-less’ screens, low battery drain, and ironically, it represents one of the biggest barriers to wider success at this time.

“From my understanding, there’s only one manufacturer of the e-ink screens and the simple problem that brings is that you’re looking at capacity issues,” Hoorntje comments. “A new reader in any shape or form doesn’t matter; most of the technology is relatively cheap, the only costly component is the e-ink screen. Having shortages because there’s only one licensed manufacturer means that the price remains high and, as with any other consumer product, that creates an entry barrier – you’ll get the early adopters, but it wont go to the mass market just yet.”

Andy Gordon is more optimistic about the prospects for widespread use: “I think that as the cost involved in producing these products reduces, it’ll become something that people more commonly use as they become more comfortable with the technology. In some ways, a bit like with the Blu-ray, the initial product releases can be quite expensive for the content, but that’s already coming down in price quite markedly. As you get to the point where the digital content is cheaper than the tangible product – the book – I think you’re going to see mass adoption of this technology.”

Another key issue for the burgeoning e-reader industry is the debate between open and closed formats. Many people are already speculating that e-readers will go the way of some MP3 players – a number of closed system products, utilizing media that is tied to a single shop or portal and unable to play anything from alternative sources. However, given the wealth of content that is already available for these readers, it seems that any attempts to partition literature in to DRM-protected formats could prove to be controversial.

“There’ll be two schools of thought – the open and the closed formats,” predicts Brown. “If you look at the Kindle in the US, that’s very closed, so it’ll be down to the consumers to make the choice about which they prefer. Sony will be firmly in the ‘open’ camp. I think that’s absolutely central to our strategy. Having an open format is the key, because consumers like choice, and if you’re locked to a format or a store or portal, if you’re not giving the consumer that choice, then there’s going to be a problem.”

Gordon agrees: “If – like MP3 players – they become constrained by file types, they just become a pain in the arse, for want of a better term. It really needs to be as simple and as easy as it can be made.”

Provided that the content market does not become overly tied down by intellectual property negotiations and digital rights management – which, given the history of digitised music, is easier said than done – the potential for the e-reader market is huge. It brings one of our oldest mediums, the written word, into the digital age and provides an avenue for sales in an area where traditional media is suffering.

“I think it’s going to grow as it becomes more mass market – it has the potential to be huge,” states Gordon. “I think that assertion is backed up by the fact that all the major retail chains are seeing a place for this in their electronics line-up.”

Although Sony’s stance is that it’s still too early to call, Brown also sees the potential for big growth: “We’re in the early stages and we’re still at that time when its quite hard to predict just how big it will be. It’s exceeded our expectation to date and it’s currently in that place where it’s growing more than 100 per cent per year. It hasn’t reached a plateau in terms of sales yet.

“All I can say is that the market so far has seen shipments in the hundreds of thousands. Obviously, it’s our intention to be a major part of that market, whatever size it grows to.”

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