Don’t Call the E-Reader Doomed

Now that 2012 is over, the "Wall Street Journal" is pondering whether the e-reader era is coming to an end. Is it time to write e-readers' obituary?

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Now that 2012 is over, the Wall Street Journal is pondering whether the e-reader era is coming to an end.

Although the story stops short of using the D word, it notes that e-reader sales hit their peak in 2011, fell sharply in 2012 and will continue to slide in the years ahead, citing forecasts from IDC and IHS iSuppli. The story harps on the standard reasons for the e-reader’s impending troubles: full-featured tablets can read e-books and do a whole lot more, and the price gap between e-readers and cheap tablets has narrowed, so it’s harder to justify buying a single-purpose reader like the Kindle Paperwhite or Nook Simple Touch.

While it’s provocative to declare in general terms that once popular technologies or products are on their way out, I’d rather think about what the actual effects may be.

For one thing, e-readers aren’t going away anytime soon, at least not until their unique properties can be matched by inexpensive tablets. The fact that e-readers are cheap, are easy to read even in sunlight and can last for a month or two on a single battery charge means they can be nice to have around, even if you own a more expensive tablet. There’s also something to be said for their mandatory focus on reading, which eliminates the myriad distractions that tablets provide.

There’s no threat of forced retirement either, because the e-reader business is different from televisions or other electronics, where vendors must push newer and better technologies in hopes of raising profit margins. Companies like Amazon and Barnes & Noble aren’t making money on hardware; they’re making money on books purchased through the device, so even as the cost of an e-reader approaches zero, it remains a worthy business. If anything, e-readers are more of a sure bet for e-book sales than tablets, where users can stay entertained with free apps and the Web. (It’s worth noting that most e-reader companies that relied on hardware sales for profits gave up the fight years ago.)

The question, then, is whether e-readers will remain in any way a phenomenon. That’s a trickier one to answer, but I don’t think e-readers have stopped being interesting yet. In the past couple of years, we’ve seen the rise of touchscreen e-readers and backlit displays, and there’s still room to lower the cost of those features. There may be other innovations on the horizon as well, like flexible E Ink screens to improve portability.

For e-readers, the future probably looks a lot like it does for the dedicated MP3 player, and that’s far from catastrophic. Apple still sells its iPod Classic, despite years of predictions about its impending demise, and continues to fiddle with the rest of its iPod line. The iPod Shuffle has become a teeny square, and the iPod Nano veered into smart-watch territory before becoming a credit-card-size music and video player. These devices didn’t go away, they just became better at their core competencies. If anything, e-readers are an even better example; while you could argue that an iPhone is better for listening to music than an iPod Nano (because of its Internet connectivity), e-readers are still better than tablets for reading books.

The Wall Street Journal acknowledges many of these points but nonetheless asserts that the “e-reader era” might be over. But even in dedicated e-readers’ best year, which according to IDC was 2011 with 27.7 million units shipped, they were overshadowed by tablets, which saw 68.7 million units shipped. And though tablets will likely keep growing while the e-reader market slips, lots of that growth comes at the cost of laptops as well.

The reality is that e-readers never had an era of their own to begin with. They always have, and always will be, outdone by tablets. But they’re still sticking around.