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Computerworld - With its color multitouch display, Apple Inc.'s new iPad could clobber -- but not kill -- the competition in the blossoming e-reader market, which includes Amazon.com's Kindle, the Sony Reader and other devices that use gray-scale displays and have slower interfaces, some analysts said.

"Apple's full-color, full motion [iPad] device makes not only netbooks, but any product with an E Ink display look tired and dated," wrote Yankee Group Research Inc. analyst Carl Howe in a blog after spending a few minutes using the tablet device.

"If you're a publisher who lives and dies by what your content looks like, you want to be talking to Apple now; any other digital distribution is going to look very last decade," Howe continued.

With the first iPads expected to go on sale in March, Amazon, Sony and other companies selling e-readers with displays that use various gray tones will have only a year or so to come up with color displays, or they could be seriously hurt by a second-generation iPad, said James McQuivey, an analyst at Forrester Research Inc.

The situation is much worse, he said, for vendors that have announced but not yet launched gray-scale e-reader devices, such as the Que from Plastic Logic Ltd. and the Skiff from Skiff LLC.

"If an executive is considering a Que but then looks at an iPad that allows him to view multimedia and do light work, he'll end up with the iPad," McQuivey said. And the iPad will win out on price: The cheapest iPad, which is Wi-Fi-only and has 16GB of storage, goes for $499, compared to $649 for the Que, which is Wi-Fi-only and has 4GB of data storage, he noted. The iPad not only features a color multitouch display; its appeal to users is enhanced by its connection to Apple's iBook store and its use of the open ePub format, analysts added. The New York Times and five major book publishers have already agreed to deliver content to the iBook store.

Wednesday's iPad demonstration showed that users could read the Times on the iPad and then launch embedded color videos to learn more about a subject.

Similar embedded video capabilities were demonstrated earlier this month at the CES show by Skiff, which is developing e-reader capabilities for use in dedicated devices and in tablet devices with color screens such as the Viliv tablet.

At CES, Skiff President Gilbert Fuchsberg described some advantages of e-readers over color tablets, noting that e-ink displays can be read for hours at a time because they don't emit light that bombards a reader's eyes the way a color LCD display with LED backlighting (as used in the iPad) does.

In general, tablets are also heavier and can weigh three to five pounds, Fuchsberg noted. The iPad weighs 1.5 lbs. and is at least a half pound heavier than the largest e-readers.

McQuivey said people who use an iPad for prolonged reading "are going to experience eye strain and will need to blink more and carry eyedrops," he said.

"You can only stare at direct illumination for a short time before it strains the eyes, and sitting in front of many displays that are broadcasting photons into your eyeballs is very disconcerting for the eyes," McQuivey said.

Therefore, he predicted that the iPad will be for users who are light readers but who also do a lot of Web browsing and download music and video. "The iPad is really a multifunction device, and the message Apple gave was that it's not really about it being [just] an e-reader," he said.

Despite concerns about the iPad's impact, Howe said in an e-mail interview that Apple's tablet won't kill the e-reader market. "Rather, it just raises the bar for competitors," he said. "Once the iPad is shipping, good enough [e-readers] won't cut it anymore, except for the most cost-conscious buyers."

Both Yankee Group and analyst firm In-Stat are still bullish on the e-reader market. In-Stat said nearly 1 million e-readers shipped in 2008, and that number will grow to 28 million in 2013. For its part, Yankee Group said e-reader sales hit about $400 million in 2009 and will explode to $2.5 billion in 2013.

In a statement, In-Stat acknowledged that the iPad "is an impressive device" but added that the firm "cautions individuals who are quick to write off the e-reader segment."

Stephanie Ethier, an In-Stat analyst, said that future generations of e-readers will evolve, and "the line between e-readers and tablets will blur substantially ... within the year."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, send e-mail to mhamblen@computerworld.com or subscribe to Matt's RSS feed .

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