The Disappearing Market Share of the E-Reader: Is it now a transitioning technology?

E Ink Chief Marketing Officer Sriram PeruvembaLast weekend, Reuters ran an interesting analysis-style think piece titled “E-readers grapple with a future on the shelf.” The article revolves around the idea that because tablets have grown so popular, so quickly, the lowly e-reader has essentially becoming a nearly outdated gadget. Tablets, to put it plainly, have finally replaced e-readers, once and for all.

From the article’s lede:

Amidst our growing love affair with the tablet, spare a thought for its increasingly shelfbound sibling: the e-reader.

Take Taiwan’s E Ink Holdings Inc, which makes most of the monochrome displays for devices such as Amazon’s Kindle and Barnes & Noble’s Nook. After five years of heady growth during which shipments rose 100-fold, it got a jolt at the end of 2011 when monthly revenues dropped 91 percent in two months.

“The bottom fell out of the market,” says E Ink Chief Marketing Officer Sriram Peruvemba.

The article goes on to suggest that, largely due to the overwhelming popularity of the iPad (and presumably, the many Android-powered tablets that have followed it), the e-reader just isn’t all that necessary anymore. It’s been replaced, the article suggests, by something that’s more popular, more practical, and just plain better.

Products that use E Ink technology

Products that use E Ink technology

Personally, I love the fact that my dedicated e-reader (a Special Offers Kindle 4) is, in fact, dedicated only to e-reading, and nothing else. I know many of you feel the same. But because I don’t own a tablet of any sort, I’m not really in a position to discuss the superiority of reading on an e-reader over, say, a Nexus 7 or a Kindle Fire. Not that one person’s lone opinion necessarily even matters; the Reuters article, after all, backs up its argument with solid numbers.

Again, from the article:

A recent survey by the Pew Research Center found that of those Americans over 30 who read e-books, less than half do so on an e-reader. For those under 30, the number falls to less than a quarter.

Analysts have cut forecasts, sometimes dramatically. IHS iSuppli predicted last December there would be 43 million e-readers shipped in 2014. When it revised those numbers last month, the estimate was lowered by two thirds.

By contrast, Morgan Stanley in June doubled its estimates for 2013 tablet shipments, predicting 216 million compared with its February 2011 forecast of 102 million.

Incidentally, the Reuters article isn’t entirely a ‘tablets versus e-readers’ rant, even though that’s probably how I’m making it sound. As the piece goes on, it morphs into a business journalism-style article about the E Ink Corporation, the recent fortunes of which are described thusly: “After five years of heady growth during which shipments rose 100-fold, [E Ink Holdings] got a jolt at the end of 2011 when monthly revenues dropped 91 percent in two months.”

And there you have it. Because while statistics from the Pew Research Center or IHS iSuppli studies can be easily skewed to fit just about any point of view, you can’t really argue with the fact that E Ink’s “monthly revenues dropped 91 percent in two months” at the end of 2011. Of course, as some pundits (as well as some readers here) have suggested in the past, E Ink’s swiftly dropping sales figures may have less to do with the overall popularity of the e-reader as a device, and more to do with the fact that everyone who wants an e-reader already has one.

Who knows?

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10 Comments on The Disappearing Market Share of the E-Reader: Is it now a transitioning technology?

  1. As do-it-all tablets and smartphones seem to be taking over, people are losing something. Most people’s photos these days are terrible, taken from so-so cell phone cameras instead of digital cameras that produce much better pics (especially in low light). People strain their eyes and read a few pages of a book or magazine, while I plow through novel after novel on my Kindle. And don’t get me started on people at work who respond to important, multi-part emails with three words — and I know they didn’t even read the whole email (let alone the attachment) on their 3.5″ screen.

    Yeah, smartphones and tablets are cool and do amazing things, but they’re simply not the best tool for all jobs. I’ll be keeping my Kindle, digital camera, and large-screen desktop computer, thank you. And I’ll be reading books and looking back at great photos while others sift through a bunch of blurry, unsorted pics on their phone.

  2. I think it is a two fold problem. I think that many people who read a lot will still want ebook readers, but for people who maybe spend 30 min to an hour a day reading, and have a tablet for browsing the web and watching videos… well, it becomes hard to argue that they should want an ereader. And I agree that the market has probably reached the point where the majority of sales are those who are replacing their existing ebook readers.

    Because their battery life still dwarfs the best tablets, I suspect that ebook readers will stay around for a while.. but will be more a niche product like they were when the kindle first came out.

  3. Having both a Kindle Keyboard and original Kindle Fire I have distinct preferences as to what to do with each. For reading text the Kindle Keyboard is far superior, easier on the eyes, much lighter and more convenient. I like the ability to easily hold and read one handed thanks to the dedicated forward and back keys. The long battery life is another plus. I would like a Kindle paper white display with a Kindle Keyboard and faster processor that doesn’t slow down operations other than reading whey you put 1500 books in it.

    I got the Kindle Fire for viewing PDF files many of which have color and photographs and to play the occasional movie. I prefer a desktop computer or laptop for web browsing due to the much larger screen. I like the Fire for what it does. As a book reader it is too heavy and it is a bit awkward to use to read one handed due to weight and the touchscreen rather than dedicated forward and back keys that don’t accidentally activated like the touchscreen. For reading pdf files, the Fire does well, but next time around I will get a tablet with a much larger screen as these document really need it to keep from having to swipe the screen to see the other part of the page all the time. It will come down to the larger Kindle Fire HD or an iPad when I get a new tablet.

    Meanwhile I spend most of my time reading on the Kindle Keyboard.

  4. David, Have you not seen the photography that is possible with an iPhone? http://photography.nationalgeographic.com/photography/photo-tips/iphone-photography-tips/

    Digital cameras and video recorders are not selling as well because of the quality that is possible with some of these smart phones. Someone said it all with, “The best camera is the one you have with you.”

  5. I think the popularity of the new Kindle Paperwhite speaks for itself. The #2 best selling product on Amazon, (behind the Kindle Fire HD, meaning that Amazon is selling more of these thigns than they are the latest 50 shades novel.)

    It’s understandable and expected that the potential market for tablets is much greater, but e-ink display readers are still as popular as ever, and increasingly so, with avid readers.

  6. Thanks for the comments, everyone – they’re much appreciated. I really don’t really know why I’m so endlessly fascinated by learning what different people use their different devices for, but I do know that almost every time we run a story like this, it seems to garner a fairly high level of interest.

    In fact, for those of you who may have missed it, I’d love to get your thoughts on a somewhat similar post we ran about six weeks ago, called “Reading E-Books on Smartphones – How popular is it?” http://soc.li/Eo5o5Ge

    @David Derrico – I definitely hear what you’re saying, but as Frank pointed out, you are mistaken about smartphone cameras; they’ve improved hugely over the last year or two. I used to have a BlackBerry Curve that took the blurriest, most useless photos I’d ever seen. But now I’ve got an Android phone – it’s an HTC myTouch 4G Slide – and the camera blows away any point-and-shoot digital camera I’ve ever owned. I’ve never owned a DSLR camera, but I have had some pretty good point-and-shoots, and none of them have come anywhere near to the quality of this phone’s camera.

  7. I think it’s pretty self-evident that, even if some phone cameras have improved, they are not going to be as good as dedicated digital cameras. You’re comparing a 1-cm piece of glass with a real camera lens, and a tiny piece of a phone with a dedicated instrument many times that size. The difference truly shines through in indoor or low-light situations, which is often. I will let the true photography aficionados regale you with all the reasons why. I will just say that I’ve stopped bothering asking friends to email me photos from their phones, because they are always crap, blurry, too dark or washed out, etc. The photos I take with a $199 digital camera (and I am no expert) blow them away by an order of magnitude. It’s about a lot more than just the number of MP.

  8. What’s happening is that most everybody has a smart phone. Then they have whatever single purpose device is most important to them.

    For example, I have a smart phone and also a kindle because reading is incredibly important to me.

    My step-son has a smart phone and a Playstation Vita which is a powerful hand-held gaming device because games are incredibly important to him.

    My wife has a smart phone and a Kindle Fire because watching videos and checking Facebook is incredibly important to her.

    The degree of choice and flexibility we have is pretty amazing.

  9. Hayden Johnstone // November 1, 2012 at 9:53 pm //

    I think it all comes down to convenience.

    As Frank Lowney said “The best camera is the one you have with you.”

    The same will apply for reading an ebook. If you have a tablet with you, then it will be good enough to read a book. If I go travelling, then I just take my tablet and use it for work, photos and reading. I don’t feel like carrying to many devices when I am on the road.

    I do have an excellent DSLR camera and an e-ink reader. The camera is heavy and bulky, so I only take it when I know I need its superior photo taking abilities and the e-ink ereader comes out around the home. I strip the DRM off all my books so I can put them on both the ereader and my tablet.

    The tablet is not the best device for taking photos but it is good enough most of the time and the tablet’s shinny screen and lower battery life is not ideal for ebook reading but it still does the job, especially when I am the road and cannot carry too many devices. There is no 100% perfect device

  10. I’m just thankful I had an e-ink Kindle Keyboard this past week when we went for three days without heat or electricity. I tree fell on my car so I was pretty much stuck. With nothing to do but stay in bed wrapped in blankets I found myself reading for 12 or 14 hours every day. I would have have been able to read that long on a backlit screen. With the wireless feature turned on only to download my NYTimes, then quickly turned back off, my Kindle battery status showed half full on Thursday evening when the lights finally flickered into existence again.

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