E-readers could push growth in e-textbook market, analysts say

Computerworld - With more e-readers hitting the U.S. market, analysts predict a big uptick in device sales in late 2010, with a strong surge in the popularity of electronic textbooks used in high schools and colleges in time for school in the fall of 2011.

The market for e-textbooks is considered a rich one, but it is also governed by many factors, including the cost of e-readers. They can run about $400 -- the price of the new Irex DR800SG announced yesterday -- putting them beyond the reach of many students.

How fast the e-textbook market will grow and how large it will get will depend on a diverse array of more than 20 textbook publishers in the U.S. Many of them are weighing the use of proprietary or standard e-publishing technology and evaluating whether students will rely on e-readers to purchase expensive textbooks and other books, analysts said.

"It's a two-year window for e-textbooks before there's significant market traction," said Gartner Inc. analyst Allen Weiner in an interview. "But it's a fertile market."

Weiner predicted that a number of major vendors, including Google Inc. and Apple Inc., could enter the market with devices and marketing plans that involve textbook publishers and, possibly, college bookstores.

Apple has long been rumored to be working on a tablet computer, perhaps with a 9-in. screen, for debut in February. That hardware could be targeted at college students accustomed to dropping $100 or more for traditional hardback texts, Weiner said.

"An Apple tablet could be the sweetest college textbook reader you've ever seen," Weiner said. "Apple is letting the e-reader market simmer and will come into it when the market's ready to boil."

The market in the U.S. now includes the Irex device, which has an 8.1-in. screen and goes on sale at Best Buy stores in October. It will use the Verizon Wireless network for downloading books and newspapers. Sony Reader devices are being sold at Best Buy to work with AT&T's wireless network. And Amazon.com has produced several Kindle e-readers with wireless connections via Sprint Nextel.

"While we've just seen three vendors in the U.S., there will be a lot of activity in the next year," said Vinita Jakhanwal, an analyst at iSuppli Corp. U.K.-based Plastic Logic Ltd. is planning to introduce an e-reader in the U.S., and Asian manufacturers are expected to launch products -- though not necessarily in the U.S., she said. "There's also a lot of speculation about whether Barnes & Noble will launch their own e-reader or use existing ones," she said.

While the cost of components inside e-readers is dropping, thus lowering the overall cost of an e-reader, Jakhanwal predicted that it could be three years before e-readers hit the magic $99 price point targeted by many consumer electronics manufacturers to attract a large audience. Globally, iSuppli estimates that about 5 million e-readers will be sold in 2009, with that figure expected to climb to between 13 million and 14 million in 2010.