One of the main reasons why Forrester is correcting its forecast is the fact that prices have come down (and this report was actually written before the Amazon announcement). In addition, Forrester also sees increased consumer awareness thanks to the current media buzz around eReaders. While the Kindle was mentioned 8,680 times in news stories in 2008, it has been mentioned over 15,700 times in 2009 already (including the month of September). In addition, the fact that more content is now available and that manufacturers like iRex and Sony are backing the open ePub standard is also opening up the market to buyers who previously weren't interested in Amazon's closed Kindle ecosystem.

Outlook for 2010: Even Better

For next year, Forrester expects that Barnes & Noble will become serious competition for Amazon. With the iRex Digital Reader 800 and the forthcoming Plastic Logic reader, B&N will be able to offer its customers a lineup of eReaders that can easily challenge Amazon's Kindle - though not in the international market that Amazon just entered yesterday.

Forrester also expects that Apple's mythical tablet could become a major force in the eReader market, though for the time being, the Apple tablet is obviously nothing more than a rumor.

Clearly the eReader market is growing at a rapid pace. Just yesterday, when Amazon unveiled the reduced prices for its Kindle 2 and the launch of the AT&T-powered "U.S. & International Wireless" version of the Kindle 2, Amazon's CEO and founder Jeff Bezoz pointed out in an interview with the New York Times that whenever Amazon offers both a Kindle and paper version of a book, 48% of total sales now come from the digital Kindle edition. In May, this number was 35%. While Amazon doesn't release sales numbers for the Kindle, these numbers are only possible if Amazon has sold a lot more Kindles than most analysts previously thought.

As Forrester analyst Sarah Rotman Epps point out, iRex has to overcome some challenges because its brand is relatively unknown in the US. According to the New York Times, iRex wanted to release a Barnes & Noble branded version of the DR800SG, but those negotiations apparently didn't go very far. At the same time, though, iRex also has some advantages, especially in Europe - a market that other vendors have mostly ignored for now.

At this point, however, it's not even really about the launch of yet another eReader anymore - with Amazon, Sony, Asus, iRex, Plastic Logic, Coolreaders, and a growing number of other contenders, the market is now wide open and competition is already bringing prices down. Prices now start at $149 for refurbished 1st generation Kindles and go up to $489 for the Kindle DX, with Amazon's competitors hitting every price point in between. For most consumers, any price over $99 is still too high for an eReader, but then, hardware prices always come down sooner or later and it is only a matter of time before somebody is going to release a decent $99 eReader.

At $399, the new iRex reader is obviously one of the more expensive readers on the market right now, though its price is in line with competing wireless eReaders like the Sony Reader Daily Edition. Sony, however, offers a real touchscreen on some of its high-end readers though, something iRex has disavowed for now because it reduces the contrast of the screen.

Getting eReaders Into the Marketplace

Another important aspect of this announcement is that Best Buy will now set apart some space in its stores to feature eReaders. Until now, Best Buy only sold eReader on its website. Even though public interest in eReaders is high, only a relatively small number of people have actually held one of these devices in their hands.

LCD Screens for an eReader?

The dual-screen display and the price seem to be the major draws that brought a lot of attention to this story this morning. The price, assuming this rumor is true, is obviously very good and the idea of having two screens is also attractive - though it might not be as practical as having a single, larger screen. In reality, though, it is hard to imagine that an eReader with an LCD screen will be able to conquer the market. Unlike e-ink screens, LCDs need a lot of energy. While you can read a few books on a Kindle without recharging, a dual-screen LCD eReader will need to be recharged far more often - unless Asus weighs it down with a large and heavy battery pack.

One advantage of using LCDs is that they basically turn the device into a small computer. According to the Times, Asus even plans to add a webcam and Wi-Fi to at least the high-end model, though the price of this device will most likely be considerably higher than $150.

$99 Is the New $199

In an earlier report, Rotman Epps argued that breaking the $199-barrier would be a major breakthrough for the eReader market and would allow these devices to become mainstream. Now it looks like $99 might actually be the point where eReader would become an impulse buy for the majority of consumers.

The good news for eReader manufacturers, however, is that those who intend to buy an eReader within the next six months are willing to pay up to $159 and those who actually already own one are even willing to pay over $250. A bargain price for eReaders for both of these groups would around $100, though.

Price Inevitably Comes Down

When it comes to consumer electronics, prices always come down in the long run, and we will surely see a similar trend for eReaders. For now, manufacturing costs for eReaders are still relatively high, but publishers could subsidize eReaders through a subscription model, for example.

It is clear, though, as Rotman Epps points out, that most consumers don't put a lot of value on these devices yet and that prices will have to come down substantially. Even then, Rotman Epps argues, eReaders will never be as popular as MP3 players because the majority of consumers "don't care enough about reading or technology to invest in this type of single-purpose device at anything close to realistic prices."

In his remarks, Clancy stressed that he doesn't believe that brick and mortar book retailers will die anytime soon. He did, however, argue that book retailers will have to adapt to the changing environment and start to offer digital copies of books in addition to regular print copies. In Clancy's vision, Google will "syndicate for our partner program all of the books we sell that are new, so that any bookstore can sell a Google edition and find a way that people can buy them in brick and mortar stores as well."

Clancy did stress, however, that books will always be stored in the cloud, so we are not quite sure if this means that users will basically only buy access rights to a book but won't be able to store a copy on their devices for offline reading. As most book publishers are still extremely nervous about the potential for piracy, cloud storage might indeed be a way to alleviate some of these fears for Google.

Google Editions: Readable on Any Device

Clancy also stressed that these "Google editions" should be readable on any device, including laptops, phones, and dedicated eReaders. In addition, Google wants to work with any publisher that is willing to work with Google to offer books in the Google cloud.

Of course, Google's relationship with publishers is rather rocky, so it remains to be seen how many publishers would really want to sign on to this program. At the same time, though, most publishers also aren't exactly happy with Amazon either. What is clear, though, is that Google plans to create its own cloud-based alternative to eBooks stores from established retailers like Amazon and Barnes & Noble.

Thanks to E.E. Boyd from MediaBistro for transcribing Clancy's remarks.

We tested the iPhone app yesterday, and it is indeed a very capable eReader app. It especially stands out because it gives users the ability to customize everything from background and text colors, to what gesture users prefer to switch pages (swipe or tap), as well as line spacing, font size, and margins. The desktop app, which we tested on a Windows PC, is also very usable and customizable, but doesn't feel quite as elegant as the iPhone app.

While the apps are good, though, the B&N eBook store will only be able to really live up to its potential once the company starts to sell the Plastic Logic eReader. While the Kindle is a great device, there can be no doubt that the design is a bit clunky. The Plastic Logic reader, however, looks quite slick, and thanks to its touchscreen, it also offers a sought-after capability that the Kindle currently doesn't offer. In order to compete with Amazon, though, B&N will have to sell the Plastic Logic reader at a price that compares well with Amazon's Kindles.

Wireless Store?

One feature that makes the Kindle stand out from its current competition is the ability to buy and download books wirelessly directly from the device. According to Plastic Logic, the company's eReader will also be able to transfer information wirelessly, though it is not quite clear if this will mean that B&N will partner with a wireless provider, yet. If B&N and Plastic Logic decide against this, though, this could give users an important reason to shun B&N's eReader/eBook store combo.

Can Barnes & Noble Compete with Amazon?

In the perfect world, it wouldn't make a difference whether you prefer a Plastic Logic reader, a Sony Reader, a Kindle, or an iRex iLiad. The Kindle has shown (and so did the iPod before it) that having full control over the hardware and content typically results in a more convenient and attractive package for consumers. In the long run, this will probably (hopefully?) change, but for now, we think B&N is doing the right thing by copying this model for its eBook store, though we will have to wait until the roll-out of the Plastic Logic eReader and how consumers react to it before we can really render a final verdict.

As B&N decided not to compete on price (it sells most eBooks for the same $9.99 as Amazon and also offers free samples for every book, as well as a selection of books for under $5), the quality of the hardware, the number of available books, the openness of the store, and the quality of B&N's service in general will be the areas where the company will have to stand out. Given what we have seen so far, we think that Barnes & Noble might indeed be able to challenge Amazon's position in this market, especially given that we are still in the early days of the eBook and only a few consumers have picked sides at this point, and even fewer have actually bought an eReader yet.

Unlike other eReader vendors, iRex made the decision to focus almost exclusively on the B2B market early on and focused on this market instead of going directly after consumers. As Brons told us, part of the reason was that the price for first generation eReaders was simply to high for consumers, and in order to jumpstart the business, going after the B2B market was simply a strategic decision. IRex's eReaders, are, for example, often being used as Electronic Flight Bags by private pilots. Brons also stressed that there is a huge market for books for professionals, including manuals, guides, and similar texts.

Today, iRex is also looking into the textbook market and electronic newspapers, though for the time being, the company is still focusing more on the professional market than on the consumer market.

Taking Notes

We think iRex's top-of-the-line Digital Reader 1000 devices are especially interesting because they actually feature the ability to take notes directly on the screen (with a pen - no touchscreen yet, but the company is working on this). When we looked at the Kindle DX and its role in the textbook market, we noted that the absence of easy to use note-taking features made the Kindle less useful in a school setting than Amazon made it out to be.

One thing Hans Brons stressed during our interview was that iRex puts a premium on the brightness of its screens. Adding a touchscreen would mean adding an additional layer over the actual screen, which would reduce brightness.

Brons also told us that iRex has approached (and has been approached by) a number of newspaper companies that are looking to provide their readers with eReaders. iRex is not ready to announce any new deals in the U.S. just yet, though the company is working with a number of large European newspapers already, and the Washington Post and USA Today are also available through iRex.

Color

IRex made a bit of a splash a few weeks ago when it announced (PDF) that it was working on full color readers. Brons told us that iRex was getting ready to commercialize color readers, but that this was indeed a hard problem to solve as iRex doesn't want to sacrifice screen brightness for color, which isn't necessarily a feature that most users would need.

Services for Publishers, But no Store

Brons also told us that iRex is providing publishers with a full range services to get their books onto the iRex platform, though iRex itself is not looking into starting its own store.

We think there is a chance that iRex is missing some opportunities here, though. Publishers might be able to put their books up in an iRex powered store on their sites, but consumers don't go to publisher sites to buy a book. After all, who knows (and wants to know) whether their favorite book was published by a Random House imprint like Knopf or Crown, or by Penguin (itself a part of Pearson)?

Brons acknowledged that Amazon's size must have surely helped it to gather (force?) publishers around its eBook offering, and the integration between the store and the hardware device, bundled with the Kindle's wireless capabilities, surely helped the company to make eBooks and eReaders more palatable for consumers.

It is important to note, too, that the Kindle and Amazon's eBook store isn't currently available in Europe, where iRex has its headquarters and its strongest presence. If iRex could gather enough publishers around its platform and set up a large store, the company would definitely have the potential to challenge Amazon in this market when and if it decides to bring the Kindle to Europe.

The digital PC Magazine magazine, which you can download a free sample of at Zinio, employs Flash technology and opens in a web browser window. We perused the June edition, but didn't see a lot of interactivity. Also many of the hyperlinks simply opened up pages in PC Magazine's website. A letter from a reader in the feedback section of this issue noted how he likes to print out parts of the digital PC Magazine. That implies to us that PC Magazine hasn't fully escaped the shackles of print. In fact it seems very much like the print magazine simply transplanted into an eBook. The magazine has plenty of fans, and is known for its reviews, however, it still has a few tricks to learn about digital magazines by the look of it.

Back in December 2006 we reviewed a new online magazine that impressed us with its flashy design: Avantoure. It's still going strong 2.5 years later. With the tagline "life is a game," Avantoure features rich media such as animations, interactive content, music, audio interviews, movie clips and TV commercials. The May-June 09 issue is as visually stunning as ever, using Flash as its format. It's presented online, within the browser, but is also available as an offline Flash file. The magazine costs £25 for 6 issues, or £4.50 for one issue. Generally speaking Avantoure is what PC Magazine should be aspiring to be.

So to answer the question that headlines this post: has the time of digital magazines arrived? Most people would agree that reading a magazine should be a relaxing, pleasurable experience. However if you're reading a digital magazine on your computer, chances are that you aren't especially relaxed. The savior of digital magazines though will be the increasing market penetration of eBook Readers, such as Amazon's Kindle and Sony's Reader device. With those devices, you will be able to read magazines in a relaxing manner on the plane and on your sofa.

R.U. Sirius, who edits a new digital magazine called h + Magazine, recently blogged that he didn't take to the digital format immediately. He wrote that he first tried the flash digital magazine format out "when I was in a hurried and impatient mood... and it confounded and irritated me." Later the same night, he returned to it "in a relaxed mood" and he found it "very very very quite readable." Of course he would say that, but it does reinforce that digital magazines need to be a relaxing read for people to truly enjoy them.

Let us know in the comments which online magazines you're reading at the moment, we'd love to find out some new ones.