eBook Reader Industry Commentary
The digital book industry is still small compared to the flood of digital music and growing digital video on demand, but it's inevitable that books will catch up, as the features of the eBook readers increase and prices come down. In fact, after only 1 million total eReader sales in 2008, some 5 million units shipped in 2009, expected to rise to 12 million in 2010 and 15 million in 2011.

E-books have been around in one form or another for more than a decade, but people didn't take much notice until the development of easy-to-read e-paper displays and particularly Amazon's Kindle launch in November 2007. The Kindle wasn't particularly better than other eReaders, but it offered one key advantage; it can connect to a high-speed data network, virtually anywhere, and download books and periodicals easily and cheaply. We believe wireless connectivity of one sort another will be the future for eBook readers. Likewise, we can expect color e-paper displays in the next 2-4 years.

Some critics point out that people do not want a dedicated reading device, that they will read on a single convergence device like a mobile phone, but we certainly don't find this a satisfactory way to read. Others note that netbooks--the newer, small laptops with few features--may be used as eReaders, but again, they lack e-paper displays and by contrast are that bit to heavy to hold in a hand and read casually like a paperback. We think eBook readers will take off, just not to the extent of iPods, because they are good at what they aim to do. Granted, we're still in the early adopter stage, but plenty of business professionals, bibliophiles, and technophiles will be in this first wave, as they often are, and the technology is already beginning to spread from there.

Amazon and Sony are the big names in the West in eReaders at present--in the US they account for 95% of all eBook reader sales. There are also some lesser known Asian and Dutch companies, some of whom produce excellent products. However, in the 2009 holiday season several other companies joined the mix, notably Barnes & Noble's Nook offering, with several more yet to debut in early 2010, most notably the long-awaited Plastic Logic reader. In fact, 2009 has dubbed the eReader equivalent to 2001 for the digital music industry, the year Apple launched its iPod, and the tipping point for the massive expansion which followed. We expectantly await the Consumer Electronics Show in Las Vegas, 7-10 January, where they've added a new eBooks section for exibitors (which promptly sold out), and from which we expect several new product unveilings.

The big question is will Apple jump into the ring and try to monopolize eReaders like they have digital music industry? Steve Jobs once said he had no interest in creating an e-reader as "people don't read" — but Apple is rumored to be working on an iPod Touch-like tablet device with a 7-in. or 9-inch screen, big enough to comfortably read, though it wouldn't have the long-term readibility of e-paper. Likewise, Apple could always decide to sell ebooks through its very popular iTunes storefront, across a multutude of mobile devices.

An interesting piece in the Economist noted that It is now only a matter of time until absolutely all books become available digitallly. Google, the internet giant that has been scanning and digitising books for inclusion in its search engine, now offers thousands of books that are in the public domain free. As much as we like the feel of a good book, we have to agree with their conclusion--"It seems likely that, eventually, only books that have value as souvenirs, gifts or artifacts will remain bound in paper."



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