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The e-reader market: Still young and restless

August 27, 2010 06:00 AM ET

On a gross scale, industry experts believe e-books account for less than 3% of the total market for books, but the arrival of more and more new e-reader devices is accelerating the demand for e-books to levels that exceed projections made a year ago. In March, Kobo CEO Michael Serbinis said some major book publishers expect that one in four books sold in five years will be e-books.

A consolidating market

Serbinis estimated that there are 60 companies making and selling e-readers, although analysts predict a huge amount of consolidation and reshuffling in coming months.

True to that prediction, Rupert Murdoch's News Corp. in June bought Skiff LLC, maker of the Skiff e-reader and an e-reading platform. News Corp. described the purchase as one of the "building blocks in our strategy to transform the publishing industry."

Weiner, in his blog, wrote that News Corp. is bound to use the Skiff platform to distribute its newspaper content for use on "myriad devices."

In another symptom of the changing market, Plastic Logic earlier this month canceled the launch of its Que e-reader. The so-called e-reader for business professionals had been unveiled at the CES trade show in January, and Plastic Logic had planned to start selling the device in April. On Aug. 10, CEO Richard Archuleta said after product delays and a dramatic change in the market, "it no longer makes sense for us to move forward with our first-generation electronic reading product."

Archuleta said Plastic Logic will create a second-generation device, although analysts have warned that it will need to compete with the lower-priced e-readers designed for consumers. The cheapest Que -- a 4GB model that could hold 35,000 documents -- was expected to sell for $649.

Despite its plans for a second-generation device, Molchanov said Plastic Logic has essentially exited the U.S. market, along with e-reader companies Interead and iRex. Those companies couldn't keep up with advances in the technology or the lower prices offered at Amazon and Barnes & Noble.

Meanwhile, Molchanov noted that two other companies -- Samsung and Acer -- have announced plans to enter the e-reader market.

Given the failures and the start-ups, this fall is bound to be busy with more maneuvers by manufacturers and publishers. Beyond expected price drops for some e-readers to less than $50, the consensus of analyst predictions is pretty simple: The e-reader market is still young and fairly wild.

"This is certainly still a young market and it will take at least another two years for things to settle down," Molchanov said in an e-mail. Devices like e-readers and tablet computers that fit in between the laptop and smartphone form factors "have a lot of growing to do," he added. "I expect to see the two devices will begin to look very similar when products like the Mirasol display take off."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at Twitter @matthamblen, or subscribe to Hamblen RSSMatt's RSS feed. His e-mail address is

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