Tablets won't cannibalize e-readers just yet

Emergence of tablets and associated e-reader apps won't obliterate e-reader market for now due to factors such as price, reader experience and varying reader needs, say industry watchers.
Written by Jamie Yap, Contributor

The tablet insurgence will not be of serious threat to the e-reader segment as market players argue that the two device categories serve different customers. Analysts note that factors such as affordable pricing and optimized reading experience mean the proliferation of tablets and associated e-reader apps will "not immediately" spell the death knell for e-reader devices.

According to market research firm Gartner, 40 percent of the high-end e-reader market will be cannibalized by media tablets this year. In an e-mail interview with ZDNet Asia, principal analyst Lillian Tay elaborated that while e-reader shipments are forecast to hit 15.8 million units by 2014, growth will slow from 2012 due to tablet cannibalization.

Nonetheless, Tay said standalone e-reader will still appeal to users who are avid book readers, and want a lightweight, affordable device that has long battery life as well as screen resolution that makes it possible to read outdoors--in full sunlight--with little glare.

Tim Renowden, media and broadcast technology analyst at Ovum, added that tablets will "not immediately" replace e-readers. These devices will remain popular as they are lighter, have better battery life and offer better reading experience with an E-Ink (electronic ink) screen, compared to LCD screen which is a tablet mainstay. These mean fewer hassles for users, particularly travelers, Renowden explained in an e-mail.

He added that price is the biggest factor. "An e-reader [that costs] US$139 is comparable to a US$499-priced tablet, making the former cheap enough [product] that many people can buy without needing much justification.

"The tablet [in comparison] is still a luxury item," he noted.

Convergence between tablets, e-readers
An In-Stat report last November estimated that e-reader shipments would increase, in spite of the tablet insurgence, from 12 million in 2010 to 35 million units 2014.

Jim McGregor, chief technology strategist at the research firm concurred that the battle between e-reader and tablet "really comes down to form, function and price".

"E-readers today have a distinct price and function--such as screen displays--over tablets, but rather than tablets overtaking e-readers, the [gap between the] two categories will get closer together," the In-Stat analyst told ZDNet Asia in an e-mail. McGregor attributed this trend to similarities in form factors and technologies, such as semiconductors, used by the two product categories.

In addition, he said instructions are available on the Web to guide someone to jailbreak Nook, an e-reader offered by Barnes and Noble which runs on the Android operating system, and use the device as a tablet.

Hence, he noted, "dedicated e-readers will fade rapidly" not as a result of tablets superseding them but rather, because e-readers will no longer be solely used for reading and will become increasingly more functional. The lines between the two device categories will blur, he added.

The In-Stat analyst noted that e-readers will go the way of the PDA (personal digital assistant), which became non-existent but function remained and became a standard or even a native app on other mobile devices.

McGregor added that even smartphones should be considered as part of portable reading devices segment, thanks to the emergence of e-reader apps. "Smartphones are more than capable of being e-readers, especially the ones with larger displays like the Motorola Droid X and HTC EVO," he said.

Ovum's Renowden also noted that reading is one of the most popular uses for tablet owners, given that there are e-reader apps available for all the major tablet platforms such as Apple's iOS and Google's Honeycomb.

Tay added that the emergence of e-reader apps is not surprising as tablets are evolving to become a multi-purpose device for different uses.

To withstand the tablet onslaught, the Gartner analyst recommended that e-reader manufacturers continue to tightly integrate "the experience of content and hardware". "Keep targeting avid readers who see the value of a standalone device that performs well and at a lower price than more fully-featured tablets," she added.

McGregor noted that e-reader vendors were unlikely to feel threatened by the tablet insurgence, where leading vendors such as Amazon and Barnes & Noble have embraced other mobile platforms with their own e-reader apps.

E-reader makers not threatened
Stephanie Mantello, senior PR manager at Amazon Kindle, told ZDNet Asia in an e-mail that many consumers who purchased a Kindle, also owned an LCD tablet for movies, games and Web browsing. However, she said they "prefer the Kindle for reading sessions" as it is lightweight, offers less battery anxiety and has the E-Ink display which reduces eye strain.

"The US$139 price is a key factor as well. It's low enough that people don't have to choose," Mantello said.

To stay ahead in the competition, she pointed out that Amazon is focused on providing "the best reading experience possible". Such efforts include enabling customers to "buy once, read everywhere"--via various free Kindle reading apps--on most popular devices and platforms other than its Kindle e-reader, she added.

"Amazon, as a company, loves tablet computers [as] it's a tailwind for our US$34 billion retail business. People can sit on their couch, [for example], and shop on Amazon.com," Mantello said.

But she pointed out that there are some limitations when market players build "a general purpose device like a tablet", which is not suitable for reading as "sacrifices" have to be made to allow for multiple functions such as watching videos.

A spokesperson from Sony Electronics Asia-Pacific, which makes the Sony Reader, similarly welcomed the introduction of other devices such as the tablets. "[Table users] can read e-books which is a good thing because it will expand and raise awareness of the e-book market," he said in an e-mail statement.

He added:"[The Sony Reader is first and foremost] a reading device optimized for immersive reading, and there is a wide demographic solely interested in affordable reading devices that are lightweight, portable and cause minimal stress on the eyes."

Sophy Tang, overseas marketing manager for Hanvon, a Chinese manufacturer of e-readers and tablets, added that tablets and e-readers are differentiated by customers who acquire the devices to meet their needs, for instance, to read books or consume entertainment such as videos.

Sales executive and tablet user, Katherine Ong, said in a text interview with ZDNet Asia: "E-readers are a replacement for physical books, not tablets. They will always have an appeal to bookworms who don't want to lug seven different books everywhere they go, and who still want the same comfortable reading experience they get with an actual book. So they are not bothered that their e-readers cannot do the million-and-one things tablets can.

"Even though tablets can function like e-readers and the price could drop in the future, e-readers won't disappear because a tablet can only behave like an e-reader but not perform exactly like one," Ong added.

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