An estimated fifty thousand e-readers were shipped last year in the Netherlands. A disappointing result. The e-reader market seems to vanish before it even got started. The success of Apple’s iPad seems nothing less than a death warrant for the e-reader. Having shipped over a quarter of a million iPad devices in less than six months time, Apple is telling us something: people love high-touch devices that produce colorful moving images, are easy to grasp yet come with a multitude of options, applications and connectivity. In that respect, the e-reader doesn’t stand much of a chance. It is a single purpose device that lets you merely read documents. Is this the end of the e-reader?
It is interesting to see what happened to the e-reader in its short period of existence. The introduction of e-ink technology gave us a superior reading experience compared to traditional LCD panels. The drawback is that the screen buildup is much slower than LCD screens that PCs and laptops are using. The idea was that the slow build-up of the screen shouldn’t matter in a reading environment where readers would prefer a superior screen.
But as with most things it takes a bit of time to get it right. The e-ink technology needs maturing, proper positioning and a good understanding of the content eco-system. Paying over 300 Euro for a device that can only read is an easy mark for alternative devices. The netbook alternative gained serious traction during the last 2 years. Same price, more functionality, very mobile and well connected. These are all features that consumers, the main target group, are very keen on. The battle on publishing formats doesn’t add to the popularity of the e-reader. Amazon got a long way with its Kindle and free 3G, but it is pretty useless in non-English speaking countries. The late iRex did not support Amazon’s document format and like most e-ink readers it was way too expensive for a single purpose device.
Nevertheless the true benefit of the e-reader is still out there: its superior reading experience. In fact the new ARM Cortex A8 core technology makes it faster, more energy efficient and enables color e-ink technologies in new readers. There is more. Research shows that with multi function devices users get much more distracted. For professionals a superior single purpose reading device could be a winner. Also avid consumer readers could be easily attracted to the e-reader. But even with the technology on track and potential markets being large, one could wonder if this is enough to withstand the onset of the iPad and the expected competing products arriving later this year.
Notwithstanding the success of media tablets we don’t think that single purpose e-ink readers are doomed. Prices of e-readers are coming down rapidly. We expect that the 100 Euro barrier for entry-level e-ink readers will be broken this year. This could significantly increase the chances for the e-reader to become the reading platform of choice catering to both the professional and leisure reader. While e-ink screens are more expensive than LCD displays the price of a complete single purpose e-ink reader device could and should be less than a third of a media tablet. At that price level it can simply become a new personal device at work, at home and while travelling.
But clearly potential buyers want a service as bad as they want a device. This is exactly why the e-reader hasn’t been an instant success. Why buy an overpriced gadget if there is hardly anything to read? Amazon was the first to understand this and now pushes its Kindle proving the e-reader to be a viable device. There is also no reason why a combination of content publishers and e-reader manufacturers can’t repeat the success of the mobile phone sector where more often than not you get a free phone with a subscription. Subsidizing the e-ink reader by the publishing industry opens up a new market. For the device manufacturers it could mean a mass market while for the publishing industry it would open up a whole new way of selling information by bundling books, magazines, and newspapers. They could bundle subscriptions for specific target groups or even offer individuals to pick their own combination of subscriptions.
Therefore the ideal basic e-reader should come free with a subscription, uses e-ink technology, supports all document formats including ePub, PDF, HTML, AZW etc. and has payment and basic web browsing functionality. Premium versions will have color, writing capability, free 3G connectivity, email and mp3.
At the METISfiles we think that there definitely is room for a superior reading device, both for the consumer and for the professional market. To do that publishers and the e-reader manufacturers should get their act together and think of a new business model. This takes courage and may go against old publisher habits but as time is running out for the key players they should take the initiative. If they don’t they could both be sitting ducks but if they do and succeed they should be thankfull for Apple’s wake-up call. We’ll know by 2012.