Wednesday, December 22, 2010

E-reader Sales Greatly Increase in 2010

According to Gartner, a technology research and business leader, e-reader sales are set to reach a total of 6.6 million units in 2010. This is up 79.8 percent from the sales in 2009, and in 2011 it is predicted that global e-reader sales will surpass 11 million units, a 68.3 percent increase from this year.

"The connected e-reader market has grown dramatically during the past two years, driven by sales of Amazon's e-readers, primarily in North America,” said said Hugues De La Vergne, the principal research analyst at Gartner. This is the dominant region for e-reader sales, and we predict that it will account for sales of just over 4 million units in 2010."

“North America will remain a key market through 2014, although its dominance will decline significantly as regions such as Western Europe and Asia/Pacific become the leading locations for growth,” he continued. “Growth in North American and other markets will remain constrained by the success of media tablets, such as the Apple iPad."

As of right now, there are three dominant e-reader producers in the market: Amazon, Barnes & Noble, and Sony. Most likely, there will be new competitors that appear in the very near future that will offer low cost devices. These could definitely cause there to be a little more competition in the e-reader market. PC firms and large consumer electronic producers such as HP and Dell are trying to leave their own footprints and make an impact on the market.

Media tablets are the biggest threat to e-readers. They can offer users better experiences for reading electronic magazines and newspapers due to the fact that most of them have color and full video support. Media tablets are able to support e-reader applications as well as many functions that only media tablets can support.
"With media tablets offering more functionality, e-reader vendors need to target avid readers who may see the value of a stand-alone device that performs particularly well," said Allen Weiner, research vice president at Gartner. "E-reader vendors will also need to offer lower prices than for more fully featured media tablets,” Weiner continued. “This will entail smaller profit margins and potential hardware subsidies at retail, and/or the ability to obtain lower-priced components. We think few end users will buy both an e-reader and a media tablet, so it is important that e-readers retain a price advantage."

This holiday season Barnes & Noble chairman Len Riggio said that his company has barely been able to meet the demand for its Nook Color, and Amazon has said that they have been selling millions of Kindles. Sony, the other dominant e-reader producer, hadn’t really been saying a lot about their holiday sales, but just recently, Sony said that it’s “expecting both the Reader Touch and Daily Editions will sell out around the world before the holidays.”

A Sony rep said that they have sold millions of Readers around the world. The rep continued by saying that cost was not the factor that “it was predicted to be.” Despite the difference in price, the sales of the Reader Touch Edition PRS-650 have overcome those of the Pocket Edition PRS-350.

Both of the models have improved touch screens. The PRS-650 does have a larger 6-inch screen and some added features that are not found on the PRS-350 with its 5-inch screen. The Daily Edition PRS-950 is the only model that features a 7-inch screen and wireless connectivity with both Wi-Fi and 3G. (It is selling right now at Best Buy for $250.)

The important statement that Sony has been making often is “around the world.” Sony is marketing their e-readers inside and outside of the U.S., and they probably sell more Readers outside of the country. On the other hand, the Nook is sold exclusively in the United States, and the Kindle is available in the U.S. and the U.K. This will most likely change sometime soon, as Amazon and Barnes & Noble will probably make a global push in the very near future.

E-readers are very popular devices. It’s fascinating to see how quickly the devices are spreading not only throughout the U.S. but also around the entire globe. It will be interesting to see if some other manufacturers are more prevalent by next year and how much the devices will increase in popularity.

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