E-readers the 2009 stocking stuffer?

Posted by Jennifer Lush on October 8, 2009 at 10:25 AM

Amazon CEO, Jeff Bezos announced on Tuesday that the Kindle 2 would drop $40 in price from $299 to $259 in response to growing competition in the e-reader market. The decision comes amidst speculation that both Apple and Microsoft have plans to create their own devices and recent polls which have revealed that the current price point for e-readers is too high for the average consumer.

A new international Kindle that will allow users to buy books and newspapers wirelessly anywhere in the the world, will also be released on October 19 for $279, reports USA Today. Kindle users abroad previously needed a US Amazon based account and had to transfer their e-books from a computer via USB. "A book that may take two weeks to get shipped internationally in physical form can now be delivered in less than 60 seconds," Bezos told USA Today. The release is targeted at english-speaking expats and travellers and rivals the pricier iRex DR800SG ($399), previously the only e-reader to offer a global wireless network.

E-reader sales in the US have surpassed (albiet low) expectations, and Forrester Research, who previously predicted total sales would reach 2 million in May, has 'upped that projection by 50% to 3 million for 2009, with 30% of 2009 sales occuring in the holiday season of November and December.'

Forrester suggests a number of reasons for the unexpected success, though names falling prices, wider availability of content, better retail distribution and greater media hype to be at the core.

So the holiday season could be very happy for many and key publishers are taking note. Rupert Murdoch, News Corp CEO, is rumoured to have been in Asia to scout out a potential e-reader partner to contest Amazon. Openly uninpressed by the 30%-70% revenue split for publishers with Amazon, Reuters reports the media mogul to have met with other key players including Sony in Japan and LG Electronics, Samsung in South Korea.

Despite the fact that the future of the e-reader is now looking a little brighter, the question remains for publishers whether or not they can generate enough revenue to save newspapers?

Possibly, if publishers can find a favourable split and partner up with a decent device. But if the problem with newspapers is not the Internet itself, but a wider cultural change toward the way in which the traditional media industry is regarded, then this might not be enough. Publishers need to start playing with their e-papers and looking at different ways to develop their product into something unique if they are going to cash in on the forcasted e-reader boom. Then, perhaps the device that has been dubbed the 'iPod of reading' could be the Christmas present all publishers are hoping for.

Source: USA Today, Reuters, Forrester Research