E-Reader Sales to Peak by 2013, Report Says

E-reader sales are expected to peak at 14 million units in 2013, before falling by 7 percent in 2014 as the segment faces increased competition from a wide range of consumer electronic devices, according to a new report.

Research from Informa Telecoms & Media (ITM) claims the decline will be driven by a shift away from dedicated e-readers toward other multifunction device types, notably mobile phones and tablet-form-factor computing devices including Apple's iPad.(See also "The Best of Today's E-Book Readers.")

According to ITM, a company which delivers strategic insight founded on global market data and primary research, the trend is likely to lead to a segmentation of the e-reader market into two groups; low price, low feature models and higher price devices with advanced features.

"In its current incarnation, the e-reader offers a good reading experience, high levels of portability and great battery life. However, it is under threat from the availability of electronic book (e-book) content on multifunctional devices such as mobile phones, tablet computers, netbooks and other portable consumer electronic devices," said Gavin Byrne, senior analyst at ITM and contributing author of Mobile Broadband Devices commentating on the report.

"Apple's iPad, available in the UK market this week, is perhaps the highest-profile competition for dedicated e-readers. Mobile broadband e-readers will also face competition from much cheaper non-connected models that are targeting a lower retail price in order to stimulate adoption."

E-reader vendors will need to adapt to survive warns the report: "This is a real a wake-up call for e-reader vendors and will force them to improve both their products and their communications about the benefits of owning a dedicated e-reader. We believe this will cause the market to segment into two different groups - low price, low feature and high price, advanced feature models," ITM's Byrne adds.

In order to survive, vendors can develop low-cost e-readers with minimal features that can be used in conjunction with a PC or USB dongle to access additional content or improve feature sets in mid and high-end e-readers to transform them, over time, more into tablet computing devices.

"There are certainly a number of things that vendors can do to counteract this growing threat. However, the current absence of an obvious subsidy model for mobile network operators , the launch of the iPad and market dynamics are likely to limit the market in the long-term. Overall Informa Telecoms & Media is sceptical about the sales growth for mobile broadband e-readers," concludes Byrne. ITM notes that for the research mobile broadband refers to e-readers with embedded WWAN connectivity.

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