The Kindle’s Sales Are Fading. Long Live E-Books?

According to a pair of new studies, the dedicated e-reader is losing ground to multipurpose tablets. Despite that, e-books are still going strong.

Even if the device doesn’t remain a major player, don’t count out the content.

A pair of studies by IDC and IHS Suppli suggest that e-readers, such as the Amazon Kindle and Barnes & Noble Nook, have peaked. What does that mean for the books themselves—which might be the real concern for associations that produce publications? Probably not much. More details:

Most buyers are gravitating toward multi-use tablet products and finding a ‘good enough’ reading experience on these traditional back-lit tablets.

Why the Decline?

Well, tablets that are “good enough” for reading, even if the screens aren’t specifically designed to be as easy on the eyes, are taking their marketshare. (It’s worth noting, as Apple has proven with its iBooks Author app, that you can do more creative things with multipurpose tablets.)

For example, IDC’s report on the growth of the tablet industry specifically noted the lack of growth among e-readers. IDC anticipates that roughly 28 percent fewer units will be sold in 2012 compared with 2011.

“While the front-lit e-reader offerings from Amazon and Barnes & Noble have captured the interest of a subset of consumers who prefer a dedicated e-reader,” the report explained, “most buyers are gravitating toward multi-use tablet products and finding a ‘good enough’ reading experience on these traditional back-lit tablets.”

(IHS Suppli, meanwhile, predicts a steeper 36 percent decrease.)

And while eInk-based models still have a strong foothold in the market, prices have gone down significantly: The launch price of the initial Kindle model in 2007 was $399, while the far-more-advanced Kindle Paperwhite sells for $139.

Razors and Razorblades

On the other hand, Amazon may not be too worried about decline in the e-reader market. Why’s that?

To put it simply, the company sells its devices like razors—and its content like razorblades. You know the business model, and Amazon founder Jeff Bezos does, too.

“We sell the hardware at our cost, so it is break-even on the hardware,” Bezos told BBC News after the release of the Kindle Paperwhite and Kindle Fire HD, which the company sells at a price lower than many of its competitors. The model works well: Last year, Amazon’s electronic books began outselling its print books in the United States, a feat duplicated in the U.K. in August.

The Practical Reasons

Now, e-readers will still have fans, especially among serious bookworms, that ensure they stay around in some form, but there are business differences that may keep the devices from reaching their prior highs:

There may be less of a desire to upgrade, as e-readers tend to have longer lifecycles compared with tablets. Computerworld commenter Vegdaze put it this way: “I think having a dedicated e-reader provides a superior reading experience, but my Kindle Keyboard is just fine. I think there is less motivation to upgrade your eInk device to the latest and greatest.”

A more mature industry: Could it be a matter of age? The devices, which have been around for more than half a decade, may be seeing a similar arc as the Apple iPod and iPhone. The release of the multifunction devices eventually ended up eating into the music player’s market, turning it into more of a commodity product for the company. But on the other hand, we still listen to music, and Apple still sells plenty of it.

That might be what Amazon and other e-reader makers are banking on.

Does your association produce e-books? And how are you finding their uptake in the market? Let us know in the comments.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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