Evolving eReaders could be holiday hit

More than a decade after the first, furtive attempts to crack the consumer electronics marketplace, the eReader finally appears poised to break out from its nerdy niche and become a holiday hit with broad appeal.

At least that’s the very big hope of manufacturers, retailers and technology pundits — and at least one author.

In May, Forrester Research of Cambridge, Mass., forecast 2009 U.S. sales of 2 million digital book readers. This month, Forrester analyst Sarah Rotman Epps raised that projection to 3 million units, with another 6 million to be sold in 2010. By the end of next year, Forrester forecasts a total of 10 million eReaders will be in circulation.

“This holiday season, eReaders will be one category that’s a breakout success,” Ms. Rotman Epps maintained in her Oct. 7 report.

While the notion of electronic books has been around about as long as desktop computers have been popular, many fits and starts have fizzled in the marketplace. Both the Rocket eBook and Softbook Reader, launched in the late 1990s, attracted lots of media attention, but soft sales and low capacity of the devices — the basic Rocket eBook could hold only 10 average-size books — doomed the products, which can now be found on eBay and in flea markets, if at all.

As Randy Giusto, a veteran industry analyst in Boston, noted, the Rocket eBook “failed miserably.”

Two years ago, online retailer Amazon.com jump-started the eReader market with its Kindle device, now in its fourth iteration, supporting wireless downloads in 100 countries from an e-book catalog of 350,000 titles. Amazon won’t disclose how many Kindles it has sold, at prices ranging up to $489 for a model with a 9.7-inch display screen and enough storage to hold 3,500 “books, periodicals and documents.”

Unlike the earlier models, the Kindle — and some other competitors — can download publications via a wireless connection, making it possible to buy an e-book on impulse, much the way someone might grab a Nora Roberts potboiler at an airport newsstand.

Sony Corp., which launched new eReader models in August, is seeing higher-than-anticipated demand for its products, said Andrew Sivori, director of marketing for Sony Electronics USA. Unlike Amazon, Sony is targeting the low end of the eReader market with prices starting at $199. Also unlike Amazon, which currently only offers the Kindle via its Web site, Sony is counting on Best Buy, Borders Books and Music and other retailers to get its device into consumers’ hands.

In Kindle’s favor, Sony’s eReaders require a wired connection to a computer to download titles from a digital store featuring 130,000 titles. Sony says its open-format reader can access many more ebook titles including “more than 1 million free public domain books from Google.”

Sony expects to introduce a wireless eReader later this year, Mr. Sivori said.

“The demand has been outpacing our expectations so far,” Mr. Sivori said in a telephone interview from his San Diego office. “It’s turning into a popular category among consumers, and finally cracking or penetrating the mainstream. If you went back a year ago, there weren’t many people who knew what an eReader was. Now it’s making many people’s gift lists.”

For authors and publishers, uncertainty about which electronic-book formats will ultimately triumph in the marketplace — think BetaMax versus VHS — is being supplanted by visions of profits.

E-book sales reached $16.2 million in July, reflecting a 213.5 percent increase for the month and a 174 percent increase year-to-date, according to the American Association of Publishers.

“Interest in e-books is at the highest level it’s ever been and continues to grow,” said Jonathan Petersen, a social-media marketing consultant in Grand Rapids, Mich. “I expect that trend to continue.”

Story Continues →