Competition in the e-reader market continues to increase as Sony announced its latest model. Offering wireless connectivity, the $399 7-inch touch screen Reader Daily Edition will be available in the US in December, Sony executives announced yesterday at the New York Public Library. Select newspapers and magazines will be available on the device.

Sony produced its first e-reader in 2006 and now offers two other versions: the 5-inch Reader Pocket Edition for $199 and the 6-inch Reader Touch Edition for $299. Neither, however, offer wireless connectivity, which Amazon's two versions of the Kindle provide, and the Reader Daily Edition hence seems to be the model in closest competition with the Amazon product. Wireless connectivity allows users to download products on the go (in Sony's case via AT&T), which is a significant advantage.

The Reader Daily Edition is $100 more than Amazon's 6-inch basic Kindle, but does have a touch-screen, unlike the Kindles, and it is $90 less than Amazon's premium product, the Kindle DX, which has a significantly larger screen, at 9.7-inches. It therefore seems a fair competitor.

Two other companies are set to launch e-readers by early next year: Plastic Logic and Hearst, which are both promising large-screen devices suitable for newspaper and magazine reading. Plastic Logic's will have a flexible plastic screen offering greater durability, though its casing will be rigid and the company has been clear that it is targeted at the business rather than leisure reader. Few details are known about the Hearst product. It is anticipated that Apple will also release a tablet device offering e-reading capability in the near future.

What do e-readers mean for newspapers? Many newspapers are already available on the Kindle and the revenue from subscriptions is undoubtedly welcome. However, as highlighted in the Columbia Journalism Review in May, newspapers only receive about 30% of the sum that the customer pays, and hence the revenue stream is unlikely to be very substantial. Will the new newspaper-friendly e-readers offer publishers a better deal? And equally important, will e-readers succeed in becoming a must-have device? Current prices are likely to be prohibitive for many potential users, and products will probably have to become more functional and user-friendly before they are embraced by the younger generation.

Source: Wall Street Journal, AFP, Sony, Amazon