Tablet shipments will outpace those of e-readers by 2012, according to a new analyst report. How will that affect Amazon's Kindle strategy?
Tablet
shipments will outpace those of e-readers by 2012, according to a new analyst
report.
Research firm
In-Stat's survey of 1,000 U.S. respondents found that some 38 percent owned a
tablet, versus 26 percent who packed an e-reader. Moreover, it estimated global
e-reader shipments at 40 million by 2015, a significant number that will
nonetheless be outpaced by tablets.
"Of the two,
the tablet market is the stronger and more sustainable opportunity," Stephanie
Ethier, an In-Stat senior analyst, wrote in a June 20 research note. "In fact,
e-reader manufacturers will soon begin adding tablet-like devices to their
lineups in order to take advantage of the tablet frenzy. Barnes & Noble
already offers the Color Nook, which is often compared with a tablet, and
Amazon, the leader in the e-reader space with its Kindle, will likely launch a
tablet device later this year in an effort to compete head-to-head with the
iPad."
In other
words, tablets' "multifunction" experience, according to In-Stat, will
"represent a stronger opportunity for suppliers and manufacturers" than e-readers,
which aim primarily at delivering an optimal e-book experience.
Whether
tablets and e-readers are direct competitors is a matter of debate. Tablets
certainly offer e-reading software, often through companies like Amazon, which
also build e-readers. However, e-reader defenders argue that the devices offer
a superior reading experience, particularly for long periods of time and in
bright sunlight, as well as longer battery life. On top of that, steadily
declining prices for devices like the Kindle and Nook have helped spur e-reader
adoption in recent quarters.
Other analysts
have suggested that e-readers' popularity will eventually impact the publishing
industry as a whole, eroding the market for "traditional" paper books.
"The book
publishing industry has entered a period of long-term decline because of rising
sales of e-book readers," read an April 28 research note from IHS iSuppli,
which predicted a decrease in book revenue at a compound annual rate of 3
percent through 2014-a noted reversal from the period between 2005 and 2010,
when revenue rose.
The firm
predicted that physical book sales will decline at a compound annual rate of 5
percent. While e-book sales will rise during the same period, the increase
won't cover the revenue gap created by the decline in the physical book market.
By 2014, the research note predicts, e-books will occupy some 13 percent of
U.S. book publishing revenue, more than twice its current level.
However, IHS
iSuppli analyst Steve Mather also sees e-readers as facing substantial
competition from tablets in the years ahead.
"Dedicated
e-reader shipments will fall short of some expectations, partly because of
encroachment from media tablets, which many consumers will use to view
e-books," he wrote in an April 28 statement. "Price declines for e-readers will
be less than many expect, since makers of such devices already have cut prices
to the point where they earn near-zero margins."
The question
now, then, is what e-readers will do to blunt that step. Barnes & Noble's
full-color Nook already tries to address some tablet concerns, via features
such as Webmail. But will Amazon do something similar with its next Kindle?
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
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