Despite tablets selling like hot cakes now, analysts are still betting on the popularity of the e-reader, though they caution that for the market to really take off, local language content has to be widely available.
ABI research forecasted that the digital reader market will start to expand globally from 2013, with shipment hitting 30 million that year, doubling that of 2012's. In-Stat predicted that shipment will hit 35 million in 2014.
One reason for the e-reader's popularity is that it is designed specifically for the reading of digital content, which is a strong differentiator. "While color, illustrations, and diagrams will eventually be more common on the digital reader device, the e-book reader is not expected to address general computing applications found on media tablets," ABI's principle analyst Jeff Orr said.
Bryan Ma, associate vice president for devices and peripherals at IDC Asia-Pacific's domain research and practice groups, concurred with the trend and said that "in terms of the e-reader market, there's no way but up".
Content still king
However, he stressed that the e-reader is only an "enabler", as content is still king.
"If the content isn't there, unfortunately, the value proposition of the device falls dramatically short, which was one of the challenges Sony faced 10 years ago when it launched its e-reader," Ma explained. "It was when Amazon came along and had publishers launch digital content that gave the Kindle the push forward."
With most of the digital reading content, even the newly launched Google Books, available for now only in the United States, Orr said publishers of printed materials such as books and newspapers need to offer their products in digital format. More importantly, they have to be convinced to make material available in the local language, which is crucial for markets such as China to grow.
"In two or three years we will enter a period in which much more digitized printed matter will become available in other countries and regions. Western Europe will be first, followed by Eastern Europe and Asia, especially China," he added.
Ma thinks it is still early days for today's e-reader market and reckons it will take about five to 10 years for the product and digital content to mature. For now, "there's a lot of inertia", he said.
"It is going to take some time as publishers get more comfortable with content getting digitized," Ma said. "Even with someone as influential as Steve Jobs, it took a while for Hollywood and record labels to move over to the digital format, I think [the publishing industry] could take a bit more time."
While consumers will continue to form the bulk of the e-reader marker, the IDC analyst believes the educational sector could be the "dark horse" driving the device's popularity.
"In many ways, it's a natural fit, the idea of having digitized content on a device that students can carry around. So that makes perfect sense, and I expect to see more momentum in that direction," Ma noted. That said, while there has been a lot of interest in Korea and Taiwan on adoption of the e-reader by the student population, nothing has been finalized.
In terms of device pricing, Orr said: "For market success, an e-book reader must be priced at less than US$100 [or its] equivalent. Once these obstacles begin to be overcome, China has the potential to be a major e-book market in its own right."
When asked if it would take a low-cost e-reader to grow the market in China, Orr explained that for now, even the lowest-cost display components used to manufacture the device cost more than US$20, so the device would definitely cost more than that.
However, it is still back to the content game, where digital material will notably be accessible on a wide range of devices. This, said Orr, is good for the e-reader industry as it places more emphasis on reading as an activity. "Consumers will utilize whatever devices they have available to consume content. The opportunity is for an excellent reading experience on dedicated devices in China," he added.
With a forecasted growth in shipment, he does not think more vendors will join the hardware competition as there is no shortage of this in the market.
"Most of these devices offer the same technical capabilities. Culturally-appropriate content accessible in digital formats is missing today to realize the potential of the market," he added.
Amazon's Kindle, Barnes & Noble's Nook and Sony's Reader continue to lead the digital reader market in the U.S.