Sector guide: E-readers

We examine the growth of the e-reader market
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Despite fears of a threat from the tablet PC category, the e-reader market seems to be well establishing itself. With several major vendors putting their weight behind their respective devices, supported by a drive towards content creation, the sector is increasingly looking like a strong stand-alone segment.

A recent survey conducted by OneNewsPage found that 64 per cent of respondents preferred reading e-books on Amazon’s Kindle over the Apple iPad, showing that users are increasingly aware of the benefits of the screen and battery life that a dedicated device can offer. In addition to this, the market analysis firm In-Stat predicted that sales of e-readers would triple by 2014, with around 12 million devices to be sold this year.

The key to the sales growth of the e-reader segment is the Christmas season. With relatively low price points – which are predicted to drop below the $100 mark for a wide range of devices – e-readers provide particularly good gift sales during the festive period.

“In the United States, we’ve seen over 100 per cent sales growth every year since 2007,” says Sony’s category marketing manager Omar Gurnah. “It has been the same in the UK since 2008. This year we are expecting to see 200 per cent growth. The Christmas period is always the time when this category sees its biggest sales spike.”

The importance of the Christmas market is highlighted by Acer’s decision to launch its new LumiRead device during this period.

“Earlier this year we entered the e-reader market with LumiRead,” said an Acer spokesman. “The first launch of the new version will be between the last quarter of 2010 and the first of 2011. The goal is ambitious in terms of sales, we expect to sell between ten and 15 million units.”

Acer’s high sales targets reflect a growing certainty that the e-reader category can cut it as a standalone market, something that is reflected by the clearly defined Christmas sales boost.

The entry of Acer into this market, coupled with Amazon and Sony’s strong progress, indicates that these vendors are committed to the sector, and it’s no stretch to suggest that companies have the marketing clout to push these devices further into the minds of consumers.

Amazon’s recent Kindle advertising campaign highlighted the benefits of dedicated e-readers compared to tablet PCs, specifically citing the e-ink screen’s capabilities in direct sunlight. The technology behind the screen has been one of the driving forces in the success of the e-reader as a standalone category. The high-contrast, non-reflective panel has been developed to mimic the appearance of paper and ink as closely as possible, and has helped its developer, E Ink Holdings, to post ever-increasing profit growth.

The benefits of the screen, coupled with the enviable battery life and low price point makes for an extremely well-rounded product with a range of unique selling points.

“E-readers like the Kindle offer an uncompromised reading experience,” comments Amazon press officer Laura Bonney. “Readers love Kindle’s highly readable electronic paper display, the long battery life, the light weight, free 3G wireless, global wireless coverage, no wireless bills or annual contracts, and our great £149 price.

“Kindle is purpose-built for reading, tablet computers aren’t. There are some limitations when you build a general purpose device and it’s not going to be as good for reading because you make sacrifices in order to allow for the multiple functions such as watching video.”

Another key factor in the success of the e-reader category has been the drive to create content, without which the devices would be little more than an expensive notepad.

“Content is essential,” states Acer’s spokesman. “The availability of an innovative and revolutionary product doesn’t guarantee its success. It is only when the availability of an innovative product is accompanied by the actual ability to use it that users understand the real added value.

“The e-reader’s technological innovation has led to a transformation of the publishing industry. Worldwide publishers are taking steps to make their products available in e-book form. In the first half of 2010, sales of electronic books have increased by about 180 per cent.”

As part of a drive to create content, Sony has negotiated a deal with public libraries in the United States and here in the UK, which will see e-books loaned out for a limited period for free in the same way as traditional textbooks.

“This is a deal that we have pushed to bring over from the States and as far as I know Sony is the only company to include the necessary software in its devices,” reveals Gurnah. “You have to have the books to ensure the success of a device. You can’t do it without content. We’ve been working with publishers to get more books available in digital format. We’ve got around 600,000 titles now available for the Sony Reader.”

Amazon, on the other hand, has set its sights even higher: “Our vision for Kindle is to offer every book ever written, in any language, in print or out of print, all available in less than 60 seconds,” comments Bonney. “We are laser-focused on this vision. We started with 200,000 books and less than ten months later we offer over 400,000. That includes tens of thousands of books you can only find in the Kindle Store.”

With an appealing price point and clear USPs driving sales, the marketing muscle of several vendors improving public awareness, and a real drive to create content, the future of the e-reader market looks very bright indeed.

SONY READER TOUCH EDITION
SRP:
£200
Distributor: Direct
They say: The new Reader Touch Edition PRS-650 features a full touch screen for fast and intuitive navigation of books
Specs: Six-inch full touch display, expansion slots for up to 32GB of memory, optical touch screen can be operated by finger or stylus, reduced glare, USB input, three weeks of use between charges, simple interface, integrated dictionaries

ACER LUMIREAD
SRP:
TBC
Distributor: TBC
They say: Recently showcased at IFA, Acer has high hopes for this device, which represents its first foray in to the e-reader market
Specs: Six-inch e-ink display, qwerty keyboard, 3G connectivity, 2GB of flash memory, MicroSD card slot, ISBN scanner, will ship in late 2010

AMAZON KINDLE
SRP:
£149
Distributor: Direct
They say: Amazon’s number one bestselling item for two years running. It’s the most-wished-for, most-gifted, and has the most five-star reviews of any product on Amazon.com
Specs: High contrast e-ink screen, no glare, six-inch display, battery life of a month, storage for up to 3,500 books, fast downloads, PDF reader, integrated dictionary, web browser

SWEEX EBOOK READER
Distributor: CCI Distribution, Realtime Distribution, Bluepoint, Northamber, Spire Technology
They say: The Sweex Ebook Reader comprises all the benefits of print, yet offers a simple solution for the possible disadvantages. From now on, bulging bookcases and stacks of magazines are things of the past
Specs: Six-inch e-ink display, battery charge for 8,000 page turns, 2GB SD card slot, available in black or white

SONY READER POCKET EDITION
SRP: £160
Distributor: Direct
They say: The new Reader Pocket Edition PRS-350 easily slips into a handbag or jacket pocket for convenient on-the-go reading
Specs: Five-inch e-ink display, 2GB of memory, optical touch screen can be operated by finger or stylus, reduced glare, SD card slot, USB slot, three weeks of use between charges, simple interface, integrated dictionaries

BEBOOK NEO
SRP:
£183.90
Distributor: Widget
They say: A new reading revolution with a great sense of usability, the BeBook Neo has an integrated Wacom touchpanel and wi-fi connectivity
Specs: Wi-fi connectivity, battery charge for 7,000 page turns, 512MB flash memory, 3.5mm audio jack, USB 2.0, SD card slot, ability to add annotations

CONTACTS
Amazon:
www.amazon.co.uk
Bluepoint:
0844 571 8001
CCI Distribution:
01423 704700
Northamber:
020 8296 7066
Realtime Distribution:
01480 435881
Spire Technology:
01202 828444
Sony:
0845 600 0124
Westcoast:
0118 912 6000

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