As the EBook Market Matures, Amazon Will Face Stiff Competition
According to a new report by Forrester Research's Sarah Rotman Epps, eBooks and eReaders are slowly but surely becoming mainstream. However, while Amazon is the current market leader among early adopters of this technology, Rotman Epps predicts that later adopters will not feel the same loyalty towards Amazon. This, according to the report, will open up a lot of opportunities for other players in the market, including Sony and large mass-market retailers like Walmart.
According to Forrester's data, just about 1.5% of all US online consumers currently own an eReader - but it's important to note that this number is up from 0.6% a year ago. Forrester estimates that about 3 million eReaders will be sold in the US in 2009. By 2013, this number will grow to 13 million. Now, more consumers than ever before are aware of the existence of eReaders (37%) and the number of survey respondents who intend to buy an eReader in the next six months has grown to 6% compared to 2% last year.
Amazon currently has the lead among early eBook adopters. Once eBooks become mainstream, however, Rotman Epps argues, this lead could easily dissipate. While Rotman Epps doesn't talk a lot about hardware devices in her report, the reality is that the Kindle isn't exactly a major step forward in the history of industrial design. Early adopters and 'tech optimists' (as Forrester likes to call them) are willing to look beyond this, but in the mainstream market, hardware design might play a major role in consumers' buying decisions.
The Next Wave of eBook Adopters
According to Forrester, the next wave of eBook adopters tends to read more books per months than early adopters and will probably consist of younger males who are less likely to be married and have children. The problem for eReader manufacturers, however, will be to get this group to buy dedicated devices. Rotman Epps argues that a large percentage of this group will probably read eBooks on devices they already own (like the iPhone), unless prices for eReaders come down significantly (under $100).
It's All About the Price
Forrester's Rotman Epps argues that the high price of eReaders is currently holding back mainstream adoption. A $99 device, Rotman Epps notes, would bring a lot of additional readers to eBooks and eReaders. Most importantly, though, the eBook and eReader market is still in flux. As the next generation of readers is likely to be very different from the previous generation, Amazon will have to work hard to keep its current lead.
Can Amazon Hold On to Its Lead?
Unlike Rotman Epps, however, we think that Amazon will likely be able to hold on to its current lead. After all, it has already forged strong - though sometimes contentious - relationships with most publishers and it currently offers the best integration between its store and its eReader. Barnes & Noble's new eBook store will be a strong contender here, though we have yet to see the Plastic Logic eReader device that B&N will use to compete with the Kindle. Sony, too, is making a major push in the eBook market again, though in terms of mindshare in the US, Amazon and the Kindle are currently the clear leaders (both in the mainstream and among early adopters).
While "Later Adopters May Not Be As Loyal To Amazon.com" makes for a good subtitle, the next generation of eBook adopters is just as likely to consider Amazon as the natural place to go to for eBooks, especially given that the company is already the #1 online retailer for regular books.
What About the B2B Market?
The Forrester report only focuses on consumers. We would argue, however, that there is also a large professional market for eReaders, where the current price isn't too big an issue. Just last week, for example, iRex, an eReader manufacturer that mostly aims for the B2B market, announced the launch of its electronic flight bag for pilots - which is basically an iRex eReader with Jeppesen's charts loaded on them.
What's the Killer Product for eReaders?
The Forrester report argues that once eReaders hit the $100 barrier, users will quickly start to adopt these devices. But is price really the only issue here? Are there any other "killer apps" or devices that could drive mainstream adoption even before $99 eReaders become a reality?
Our own Dana Oshiro just argued in our backchannel that a subscription book club (maybe run by Oprah) could bring a lot of new users to eReaders. And then, of course, there is still the mystical Apple tablet that might make for a great eReader - among other things - and which will surely cost more than $99.
Would You Buy an eReader?
What is holding you back from buying an eReader? The iPhone? The price of the current generation of eReaders? Or the well-designed reading solution called 'the book'?
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Love the last sentence: "Or the well-designed reading solution called 'a book'?", because that pretty much sums it up for me.
I want an e-reader that is easy and comfortable to hold in all sorts of different positions, nice to look at, decently priced, readily available to me (may as well forget the Kindle outside the US) and easy to read in the crazy ways I sometimes do (flip backwards and forwards, dive in and out of the story at different places) - right now 'books' are fulfilling all these categories and in ways that are miles ahead of any device. Plus with a book I can lend it to my friends or family, keep it forever (no publishers coming into my house and taking it back!), donate it, leave it somewhere to be picked up or sell it on.
I'll admit I am something of a Luddite when it comes to e-books, but that would be pretty quickly overcome with a really cool, user-friendly piece of hardware. How long has it been since the idea of e-books was first put forward? It seems like every year we still have the same discussions about e-book devices. Something is being missed somewhere.
but no one has a killer product like the kindle...
A balanced article, neither a Kindle aid nor an anti-Amazon polemic. I agree the market is getting more crowded. It seems like there are new models every day. It's important to remember Kindle is only sold in the US.
Coming from the same firm that said this two years ago:
Just in time for the holidays, Amazon.com announced its first consumer electronics device, the Kindle, a wireless e-book reader jam-packed with innovation. We love the device but hate to break it to Amazon that it will be lucky to sell more than 50,000 units in its first year. At $399, the price is too high, but more importantly, the Kindle solves problems that publishers and retailers have, not problems that readers have.
Brilliant job Forrester.
first of all you need to remember that Kindle is ugly and not only ugly the ugliest product in the market.... and I think it will be killed by the techcrunch and Apple tablet releasing sometime in fall.
I live in israel so that's at least part of the reason why I haven't gotten myself a Kindle.
There are several other reasons though: no touch screen, no color support (which I find disappointing), high price and last, but not least, because the kindle is not yet an enviromentally friendly device. Let me explain what I mean by my last point: if the kindle is anything like every other computer and especially like a computer monitor, then studies show that it is very difficult to recycle and instead produces dengerous waste which is usually shipped over to third world countries instead of being properly managed. The result is that instead of being enviromentally friendly, it's actually even worse (by far) than the ordinary books we read.
I just need to know a bit more about how the kindles are going to be recycled (a solvable issue for sure) before I go buy one.
I have used eBooks since the first PPC from HP came out ( a while back) and I was able to use MSReader. Barnes & Noble sold those books, and I bought a lot (which I lost when they abruptly shut the ebook store down...bad move even then). Since then I have used Palms, and now my iPhone. The iPhone has been a great EBook rader, even with my older eyes (ok 57 is not THAT old yet!). It is also great as an audio book device (free from libraries as well!). My wife has finally gotten into this, and loves using her phone to read on the subway. Fictionwise and Ereader have had great deals, and now B&N is back through their acquistion of Fictionwise. Over the years I have collected over 300 EBooks through Fictionwise/EReader, and am continuing based on the price of the books these days, which is HIGHLY COMEPTTIVE. Rarely buy a hardcover at all anymore! I have thought of a dedicated reader, and would dumps the phone gladly to save $, BUT it needs to be a lot less expensive. $100 or less, and pocket size, would be my 2 main criteria. Then the formats it accepts in DRM will make a difference as well. My perfect device? .. $99, size of an iPhone to fit in pocket, accepts Ereader, PDF and Mobipocket DRM books. I would buy tomorrow if that one existed. Book sellers need to subsidize these like cell phones, ESPECIALLY B&N,since they are selling the books! If B&N sold a small reader for $99, I would buy it evenif it ONLY accepted Ereader DRM format and others that are not DRM. But deam on, right? tTey don't get that part of it! PLastic Logic device will be TOO BOG for everyday use and portbability, as well as too expensive. Stick with the iPhone until that price comes down!
Great commentary and analysis...RWW makes some good points and I definitely acknowledge that "vulnerability" isn't the same as "inevitability." Amazon has a very strong lead in the market, and their relationship with book-buying consumers gives them a huge advantage. It will be hard for competitors to unseat Amazon, but I think the data suggests that they at least have the opportunity to do so. It's up to them to execute, though!
Lesson learned from Apple: Apple had NO previous relationship with music consumers before the iPod, and yet they managed to dominate the market in early and late stages. Has anyone seen a SanDisk mp3 player in stores lately?
Here's our original blog post on the data: http://snipurl.com/olvfj
I'd love to have an e-book. The idea of being able to take a whole load of books on holiday without the extra weight is really appealing.
The issue for me is that I would want assurance that a reasonable proportion of the books that I'd like to read are available -- new releases of popular fiction, biographies, business books etc. Amazon probably is in the best position to make this happen with it's broad range of relationships with publishers.
But then there is the device. I'm not too keen on being locked into one device unless it is as well-designed and user-friendly as the apple iphone. I doubt that device design is a core capability of Amazon though can understand why it launched the Kindle to get the market moving.
For me the iphone is not a good ebook reader as it's just too small and I supect the tablet because it is aiming to compete with the netbook will be too big. It need to be just the right size to aid portability and readability.
Plus it needs a long battery life and must be waterproof as I want to be able to read on the beach.
Price is not a big issue, afterall I have paid c. £3-400 for an iphone when I could have got a normal mobile phone for free. I suspect that price will not be the big issue for the next wave of adopters as long as the device is really cool.
It might make sense to combine the e-reader with a games machine so that when travelling you can either read or play games.
Not a lot to ask!
I still don't have a cell phone. To much new technology came out too fast for me.
If I pay $300 bucks for personal electronic device I want it to be able to do at least most of the things a cheap cell phone can do. These e-ink clunkers are like stepping back into the 1980s. No colour? No web? No email? No data processing? Nothing else to do with them except read the supplier's very limited catalogue of really expensive books? For that price I want to be able to read everything on the web including Google Books, Gutenberg titles, Stanza titles and all the other major e-book formats. I am still smarting over having bought into Beta VCR and I'm not going to make that mistake again. If this Apple tablet combines the features of a state of the art laptop with a good reading screen, it may do the trick. But the e-ink road is a dead end and I can't believe Amazon has been able to sucker millions of people into investing even more millions of dollars in it. But we should keep in mind that putting e-books into the mainstream is not just a hardware issue. The publishing industry needs to develop a VHS type standard that will provide a reasonable level of DRM so publishers and creator will be happy to provide their content and there probably needs to be some kind of new aggregator who will do for all the e-book originators what Amazon dod for paper books. Amazon itself seems to have got off on the wrong track with its propritory system and exobitant access supply side charges.
Does Amazon Really Want to be in the Hardware Business?
http://gadgetboy.org/archives/2009/8/3/does-amazon-want-to-be-in-the-hardware-business.html
-jf.
I'm all over the place on this one. Last winter, I was on a business trip with a colleague and sitting at an airport gate when I pulled out my 700+ page Nelson DeMille hardback. She pulled out her thin, lightweight Kindle and said to me, "Gee, you could have had that on here." This made an impact on me (and it reminded me of the old V8 commercials)! I've always weighed in on the side of favoring real pages that I could curl up with, but in the past year several other points about these devices have become intriguing for me:
1. The ability to increase font size, especially for Baby Boomers. Ok, I have to admit it, I need more light and my glasses these days to plow through a book effectively. That said, large font editions are frequently riddled with errors, typos and missing pages, so the eReader poses a solution to this problem.
2. I've become a train commuter since starting a new job in the city, rather than the suburbs, and I've been seeing more of the eReaders in use. One woman told me enthusiastically how much more efficiently she can manage all of her news subscriptions through one interface and how much she is saving with the electronic format - plus she has access to archives and doesn't have to lug multiple papers around and keep track of them.
3. As mentioned before, the portability is compelling. Commuters without cars have to pare down to the minimum.
Now, for the elements that have made me hesitate:
1. yes, the price. I can purchase a LOT of books for 300 dollars!
2. The inevitability of technology to outdate itself quickly. As with computers and software, at what point does one jump in without fear that the version chosen becomes the next 8-track tape player?
3. The fact that it does commit me to paying whatever the vendors decide to charge for the material I want to load into it. Currently, my reading material comes from a variety of sources, including other folks who pass things on to me, things that I get a really good deal on, the library, etc. Once I jump into something like the Kindle, my options are limited and I'm essentially at their mercy and always paying. Granted, the e-versions are cheaper than hard copies,but I save a lot of money by using the library, buying from discount retailers and using coupons.
4. This may be a concern that doesn't play out and involves a simple behavior adaptation, but I like to mark up my nonfiction with notes and highlighting, put flags on pages, etc. While I can ostensibly do this with eReaders, is there a search mechanism that allows me to find it easily?
So those are the two columns for me currently. I guess that puts me on the fence. Having said that, if someone dropped a Kindle on me as a gift, I wouldn't send it back!
"Has anyone seen a SanDisk mp3 player in stores lately?"
That may be a rhetorical question. If not, the answer's simple: Absolutely. At Target, Office Depot, Sears...
No, they're not dominant in the market... Heck, SanDisk's share of the MP3 player market might be as small as Apple's share of the personal computer market--which doesn't make Apple invisible either.
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