E-readers have faced and overcome a number of issues in the past decade to get as far as they have:
- Technical limitations with the devices (creating the e-ink screens, getting size and weight down, engineering battery life)
- E-book format standardization (co-operation among publishers, much less tech companies, is rare)
- The perceived danger of lowering the price of books and thus their profitability
- A sense of tradition about “paper” books from publishers and readers
- A fear of piracy and bootlegging of books
The one issue that’s becoming more prominent by the day is the battle for market share among the various e-reader producers. Recent price wars have lowered e-reader technology prices by 75%. A first-generation Kindle would have set you back $450. Today, you can get a better version with more features for just $139. In order to stay competitive and maintain its price point of $149, the Kobo had to add wireless capability.
There are currently dozens of different e-readers on the market. This will change dramatically in the next year as price wars continue and the e-readers with fewer features or higher prices get muscled out. Already there have been casualties, such as the plasticLogic Que reader, which folded before it even launched. Expect to see many more e-reader brands die off.
Although the market for e-readers is growing at an astonishing rate (192% year-to-date and a record 172.4% in August over July of this year), it’s still a relatively small market worldwide with many competitors battling to add features while keeping prices low enough for the purchasing cycle to continue. There will be winners and there will be losers.
The overall war will be won by the companies that provide the best access to content AND the most flexibility to use that content. The Amazon Kindle has an early market lead and the clout to keep going. It just added a lending feature to compete with the Nook. More important, it recently launched — just in time for the Christmas buying season — a feature that allows people to give e-books as gifts, an e-reader functionality matched only by Kobo. If the Kobo can continue to grow, it has a good chance of being the number 2 e-reader, surpassing the Nook (see why here).
This year’s holiday season will be an important test. Come January, we should have a pretty good idea of how the e-reader market will shake out.