Amazon, Sony E-Book Battle Could Benefit Businesses in Big Way

 
 
By Nicholas Kolakowski  |  Posted 2009-08-09
 
 
 

Originally a niche occupied by key players such as Amazon.com and Sony, the e-reader market has the potential to expand rapidly in the near term, thanks to a host of factors ranging from price point to the age of users. In turn, this could help drive the flat-screen devices into small to medium-sized businesses and the enterprise in a big way.

The mindshare of e-readers within the consumer market has already begun to expand. In the second quarter of 2008, some 37 percent of people surveyed by research firm Forrester had never heard of an e-reader, while another 38 percent said they had heard of the devices but never seen one. A year later, the number of those reporting they had never heard of e-readers dropped to 17 percent, while the number of those saying they had heard but never seen one increased to 40 percent.

Over the same period, the number of those surveyed who actually owned an e-reader crept incrementally upward, from 0.6 percent in 2008 to 1.5 percent in 2009.

Amazon.com's aggressive campaign for its Kindle line of e-reader devices, and counter-moves by Sony and other companies, has helped push e-readers into the collective consciousness.

Click here for a look at the debut of the Kindle DX.

Realizing the utility to business, many of the major e-reader manufacturers have started integrating features into their devices designed to be of particular use in reading office materials. The upcoming e-reader from Plastic Logic utilizes AT&T's 3G network to download material, including PDF, Word and PowerPoint documents, onto the device. (Plastic Logic will also feature the Barnes & Noble eBookstore, with 700,000 titles and 500,000 free public-domain books from Google.)

The Plastic Logic Reader is scheduled to hit the marketplace in early 2010. Its screen size of 8.5 by 11 inches is designed specifically to one-up the 9.7-inch screen on the Kindle DX, on which Amazon.com also intended to display business documents in addition to books. The Kindle DX became a bestseller soon after its June 2009 release.

However, the Kindle DX retails $489 and the Kindle 2 for $299, opening a point of vulnerability that other e-reader manufacturers are attempting to exploit. On Aug. 5, Sony announced that it will release two new e-readers at the end of August, a $199 Reader Pocket Edition and a $299 Reader Touch Edition, which will either match or undercut Amazon.com's price points.

The Forrester report, issued on July 29, found that while the "early adopters" of e-readers were willing to pay higher prices, a second wave of adopters will be younger and more likely to snatch up a $99 device that connects wirelessly for book and document downloading. It also detailed a group of later adopters, likely to be women who currently buy or borrow approximately 2.7 books a month and will want a $149 or $99 price point.

"Whereas Amazon was perfectly positioned to sell to the first wave of e-reader adopters, this group may be more likely to buy from a retailer like Wal-mart or Target," wrote report author Sarah Rotman.

A lower price point could make e-readers more appealing to SMBs and the enterprise, which could issue the devices to their mobile workers. At a cost of $99, the price of an e-reader would undercut even that of a mininotebook, or "netbook."

Another x-factor in the e-reader discussion is Apple, which rumor suggests is planning on releasing a Mac Tablet computer with multitouch capability within the next year. By offering similar flat-screen functionality as the devices by Amazon.com, Sony and Plastic Logic, Apple has the potential to straddle both the e-reader and mobile computing markets.

According to analysts from research company Piper Jaffray, the Apple tablet device will likely feature a 7- to 10-inch screen, and be sold at a price point somewhere in the $500 to $1,000 range. Although no word has leaked as to the final form of the tablet's operating system, there is a chance it could run Amazon.com's Kindle of iPhone App, which would make the device both an e-reader and an upscale netbook.

If an Apple tablet device rolls out as scheduled by the end of 2010, along with a similar wave of Windows-centric tablet PCs by Dell and other manufacturers, it could potentially squish widespread adoption of cheap e-readers as business tools: The Forrester report predicted that "it will take a few years ... for e-reader prices to come down enough for [later adopters] to afford them." In the meantime, SMBs and the enterprise may decide that a more expensive tablet PC with e-reader capability, as opposed to a dedicated reader device, may be a better use of their IT budget.

But the Forrester report suggests there's also a substantial chance that Amazon will continue to dominate the e-reader market in the coming years, with other manufacturers attempting to introduce competing devices into the ecosystem. As the recent emergence of Plastic Logic shows, at least some of those manufacturers may try to target SMBs and the enterprise specifically, in which case, the typical stack of papers in a briefcase could very well be replaced by a tablet with a 9-inch E Ink screen.


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