Worldwide sales of network-connected e-readers are forecast to reach 6,6m units in 2010, up 79,8% from 2009 sales of 3,6m units, says research firm Gartner.
That growth will continue into next year, with a 68,3% growth in sales likely, taking unit sales to 11m.
The market for e-reading devices — portable devices like Amazon.com’s Kindle that use 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.
“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,” says Gartner principal research analyst Hugue De La Vergne.
North America will remain a key sales market over the next four years, although its dominance will decline significantly as demand booms in Western Europe and Asia.
Growth in North American and other markets will remain constrained by the success of media tablets like the Apple iPad, De La Vergne says.
Though three vendors dominate today’s e-reader market (Amazon, Barnes & Noble and Sony), new competitors could appear in the future with low-cost devices subsidised by content owners, according to Gartner.
Large consumer electronics and PC firms such as Hewlett-Packard and Dell are also trying to position themselves strongly in the market for connected consumer devices.
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.
Cannibalisation by media tablets represents the biggest threat to e-readers, says Gartner.
Media tablets can offer a compelling experience for electronic magazines and newspapers, due to their widespread adoption of displays that show colour and support full-motion video. They can also support e-reader applications.
“With media tablets offering more functionality, e-reader vendors need to target avid readers who may see the value of a standalone device that performs particularly well,” says Gartner research vice-president Allen Weiner.
“E-reader vendors will also need to offer lower prices than for 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.” — Staff reporter, TechCentral
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