- The Washington Times - Monday, October 26, 2009

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.”

At the same time, Mr. Peterson noted, format variations can be vexing.

“Publishers are frustrated at the number of e-book formats in which they have to publish a book. They would prefer if all they had to do was be responsible to their authors for publishing e-books in one or possibly two formats, like they do now with hardcover and softcover print formats,” he said.

Authors, too, are seeing encouraging results.

Joe Konrath, a Chicago-based writer of thrillers, including the Lt. Jacqueline “Jack” Daniels series of cocktail-themed novels (“Fuzzy Navel,” “Dirty Martini” and “Whiskey Sour”) for Hyperion Books, told readers of his blog that the ebook versions of thrillers to which he owns all publishing rights sell better, and make more money, than do his Hyperion titles.

“If I had the rights to all six of my Hyperion books, and sold them on Kindle for $1.99, I’d be making $20,580 per year off of them, total, rather than $4,818 a year off of them, total,” Mr. Konrath wrote this month on his blog, “A Newbie’s Guide to Publishing.”

“I’ve struggled mightily to break into print. And I’ve made a nice chunk of change on my print novels,” Mr. Konrath wrote. “Now I’m hoping those novels go out of print, so I can get my rights back.”

Carleton Tucker says he is seeing the popularity of eReader hardware firsthand. He’s a former record store owner who now is a “digital life supervisor” at the Columbia Heights Best Buy store in the District. He said the Sony eReaders are displayed in a new gadget area in the center of the store, where they are starting to catch on with buyers. The coveted positioning “is probably the most prominent real estate in the store, [and] a push to make people aware” of the devices.

“The biggest thing is they’re very affordable,” Mr. Tucker said. “It’s not like a new gadget you would pay $600 for. You can buy a top-of-the-line eReader for [roughly] $200. They have them with a touch screen now. They’re great to have. It’s not a fad gadget.”

Given that he sells the devices, Mr. Tucker’s enthusiasm is understandable. Best Buy is among the retailers hoping the eReader will catch on with consumers this year the way MP3 music players and smartphones caught on in years past.

“The support of retail this year is unprecedented,” Sony’s Mr. Sivori said. “This time last year, Best Buy wasn’t in the category at all. The greatest change this year is this broad-based retail support. You can now touch, try and feel a device this year before you buy, and I think that’s great for the consumer.”

A survey of potential eReader buyers by Retrevo.com, an online electronics shopping site in Sunnyvale, Calif., found that 21 percent of respondents plan to buy a device this year. The greatest pool of of potential buyers was in the 25- to 34-year-old age group, with 40 percent of those respondents saying they would consider buying an eReader this year.

“The fact [is] that people are looking at it as a gift item, more than game consoles, more than MP3 players,” said Manish Rathi, vice president of marketing for Retrevo. “It’s an early trend that indicates people want this. It’s a category the mass market is paying attention to.”

But is the mass market consumer confused? That possibility exists, said Tim Bajarin, a longtime industry analyst and president of CreativeStrategies.com, a research and consulting firm in Campbell, Calif.

The devices “are still too pricey for them to really take off and consumers are confused about the competing [e-book] formats,” Mr. Bajarin said. “But we do expect eReaders to sell better than last holiday season.”

Rob Enderle, another veteran technology analyst who now heads the Enderle Group in San Jose, Calif., noted that Best Buy’s entry created needed competition in an eReader market that had been cornered by Amazon. But Sony’s offering comes up short of Kindle in several ways, he said.

“The Sony still lacks a good book library and the user experience leaves a lot to be desired,” Mr. Enderle said. “It is priced well and it is nice-looking hardware but Sony still doesn’t get that they need a Kindle-like user experience and to match the Kindle available library of books.”

The chance to try out an eReader in a retail store doesn’t necessarily give Sony an advantage over Kindle, said CinthiaPortugal, an Amazon.com public-relations manager. “There are a lot of Kindles out there, and people are getting a chance to see a friend’s Kindle and try it; and, there’s a 30-day return policy — you can try it out, see if you like it, and return it for a full refund if you don’t, no questions asked.”

Amid the growing interest, variables remain: Barnes & Noble, a book retailer with 700 U.S. stores, introduced a $259 wireless, dual-screen touch-sensitive e-book reader called “Nook” last week. Barnes & Noblealready sells e-books that can be read on Apple’s iPhone. The retailer is also expected to support Plastic Logic’s QUE proReader, which will boast a shatterproof display at its expected Jan. 7 launch at the 2010 Consumer Electronics Show. Pricing hasn’t been disclosed.

Apple Inc. — which rocked Wall Street last week by announcing a record 47 percent profit gain in the latest quarter — is also rumored to have a 10-inch display-sized tablet device waiting in the wings, which would include e-reading and other multimedia features. Should Apple’s tablet support the “ePub” and Adobe Acrobat document formats, Forrester’s Ms. Rotman Epps predicts, the iPhone giant could “become a major player in the e-book market overnight.”

Just as in one of Mr. Konrath’s “Jack Daniels” novels, there appears to be enough suspense to keep potential e-readers glued to the digital page.

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