Monday, July 4, 2011

Future of ereaders

I've over-used this link. It comes up again to point out why ereader growth will be excellent this holiday season. If you will, a rebuttal to the publisher FUD:

With the WSJ publishing another "beware the slushpile article," (ht JA Konrath's blog comments). Here is the deal, the #1 resistance is price.

I suspect for years to come the bulk of ereaders will be given as gifts. I really have trouble seeing gifts > $100 for anyone but a parent, close sibling, spouse, or child; let's call this 'group #1.' But many won't give > $100 gifts. Hence why I think the LeapPad is $99 (but the books are $25!).

For Nephews and nieces and a few others in what I'll call 'group #2', I can see $70 being a gift limit. For this group, 'with special offers' becomes practical; while with 'group #1' I suspect it would look bad to give a discounted gift 'with offers.' For many, $50 will be the limit for this group.

See Fig. 11 of my first link. Only 46% are willing to buy ereaders at today's prices ($139 w/o offers); that doesn't mean 46% of the potential has bought an e-reader (that will take while). I suspect for gifts, the 'willing price' drops a little for anyone not special enough in group #1, we'll see more price resistance. Per Fig. 11, ereader sales open the 'potential market' by ~80% at sub< $100 (46% to 79% is about 80% market growth); don't forget not all of the current market is an early adopter.

So we *need* that $99 Kindle/Nook in 2011. :) Honestly, I suspect $70 is the true price barrier. e.g. The dash alarm clock at its normal price of almost $100 isn't a great alarm clock. But at $70, it became my father's day gift. A similar 'price resistance' will be true with e-readers.

Citibank analyst is predicting 17.5M Kindles in 2011. I think, like every other Kindle sales estimate so far, that this prediction is going to understate the market.

Note: I expect the rumored Kindle tablet to really shake up the market. I *really* would be enjoying a device where I could blog in 'glaring light' right now. Mirasol or e-ink, I'm ready for a tablet with a bluetooth keyboard that works in light LCDs are 'washed out.'

I see a market splitting in multiple markets (as all mature markets do). IMHO, e-ink or other 'glare friendly' technologies will dominate reading devices. LCD is just too much an 'office light' device.
1. Dedicated, cheap, and light e-readers. The 6" format will probably hold on. However, if the LeapPad's 5" works, I see no reason a smaller form factor won't be adopted at the lower price points. :)
2. E-reader phones at both the 5" and 7" form factor. IMHO, these devices are required for a fast boost to US e-reader adoption.
3. 7" and to a lesser extent (due to weight) 10% tablets utilized for dual purpose.

The less 'ideal' a reader, the more the device will be used for 'convenience reading' (e.g., I see this at the pediatrician and parks with smartphones) or by people who read less than 20 books per year who want a multi-purpose device.

Ereading will grow. Expect customers to be outside playing this time of year and not browsing for a new electronic toy. But as soon as the weather turns south...

Got Popcorn?

Anyone else suspect that ereading was granted a 'leg up' by the unusually long winter this year in the Northeast US?


  1. Any idea about the UK market? Is is still lagging significantly behind the US market or is it catching up?

  2. Yes, I do think the winter contributed to e-book growth! Also, rising gas prices. People have become more conscientious of filling up at the pump, and less likely to go out and eat or do something on the town. They stay home and want entertainment. (I think this contributes to services like Redbox or Netflix as well.)

    YA: Cheat, Liar, Coward, Thief
    Adult: Shackled

  3. Tara,

    I lack good numbers on the UK market. However, if we look at 2010:

    6% of the market which the UK is One year behind the US (2010 in the UK mirrored 2009 ebook sales in the US). Due to the knowledge of how ebooks did in the US, I expect that gap to close quickly; authors will have less uncertainty jumping onto ebooks. All evidence is that it will only take another 15 to 30 months before the UK and US are at the same stage/market share of ebooks.

    Now Amazon *must* refine their non-English strategy.

    J.E. Medrick,
    the 'stay at home to avoid the pump' issue definitely has helped Netflix. Amazon needs a tablet/reader to reign in the '20 books a year' crowd who also watch quite a bit of video.


  4. More tablet and e-reader predictions for you:

  5. David,

    I've read many 'reprints' of that IDC story. I do agree with one bit: B&N has the 'newer devices.' That creates buzz and helps sales. If Amazon doesn't launch a color touchscreen in 2011, they will lose the sales lead.

    All indications are that Amazon is already buying millions of components for a tablet/color ereader. :)

    I'm getting ready to blog this, here is a more quantitative look at Nook vs. Kindle: