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Friday, December 21, 2012

E-Reader Market Shrinks Faster Than Many Predicted

Nearly three years after the first iPad was introduced, the tablet has come a long way. Now there are plenty of smaller, cheaper tablets that are pretty powerful. So why buy a more primitive e-book reader?

That appears to be what a lot of people are thinking this year. The research firm the International Data Corporation found a surge in shipments this year of what it called “smart connected devices,” including tablets, smartphones and PCs. That market grew 27.1 percent from last year, to 303.6 million shipments, according to IDC.

Meanwhile, e-book readers are losing momentum. This year, worldwide shipments of e-book readers will fall to 14.9 million units from 23.2 million units last year - a 36 percent drop, according to estimates by IHS iSuppli. The research firm eMarketer noted these trends in a report published on Thursday.

Forrester Research is seeing a similar trend. In the United States, manufacturers sold nine million e-book readers this year, down from 15.5 million last year, according to Sarah Rotman Epps, a Forrester analyst. Next year, the number of e-book readers sold will be 7.5 million units, and in 2014 that number will drop to 5.3 million and keep falling from there, Forrester predicts.

Does it make much sense anymore to buy e-book readers? They are still far cheaper than tablets - the cheapest Kindle costs $70, while the cheapest Kindle Fire tablet costs $160. But many people are choosing to pay extra to get the features of a tablet, Ms. Rotman Epps said. In a survey conducted by Forrester, 12 percent of respondents said they had bought a tablet instead of an e-book reader, and 39 percent of tablet owners said they wouldn't buy an e-book reader in the future.

“It's looking like e-readers were a device for a particular moment in time that, more rapidly than we or anyone else thought, has been replaced by a new technology,” Ms. Rotman Epps said in an interview.

That doesn't mean Amazon and Barnes & Noble, which have been big sellers of e-book readers, need to worry. Those companies have been offering touch-screen tablets for a while now. The companies that will be most vulnerable to this trend are those that primarily make e-book readers, like Kobo, Ms. Rotman Epps said.