Why are eReaders no longer the flavor of the month?

The Kindle is rumored to have sold 8 million units in 2010. You’d think that would make every company on Earth want to manufacture eReaders. Strangely, if CES 2011 is any indicator, most companies seem to have given up on eReaders.

Decline of interest in making eReaders – CES 2010 vs CES 2011

Here’s a post reviewing the eReaders of CES 2010. Here are some of the eReaders shown off last January (with updates on their status in 2011 included) -

  1. Mirasol. Mirasol is the star eReader at CES 2011 – just as it was the star eReader at CES 2010. The first Mirasol device is rumored to be the PocketBook Mirasol and it’s set to debut in Q3, 2011. Note that Mirasol powered eReaders were supposed to launch in 2010 itself – so that Q3, 2011 date isn’t a given.
  2. BeBook with Liquavista Color Display. No mention of it now. 
  3. PixelQi. Notion Ink’s Adam tablet with Pixel Qi display is available – It’s a Tablet rather than an eReader. No other devices with Pixel Qi at CES 2011.
  4. Alex Reader. Arrived and was rather good – didn’t make much impact. 
  5. Entouradge Edge. Arrived and was good but very expensive. Didn’t have much impact.
  6. Copia. Released a social platform instead of an eReader.
  7. MSI Dual Screen eReader. No idea what happened to this.
  8. Cool-er. Bankrupt now.
  9. Bookeen Orizon. No idea what happened to this.
  10. Samsung E6 Reader. This is set to release in the US soon.
  11. Aiptek Story Book.
  12. Fujitsu. Still only in Japan.
  13. Skiff. Closed down.
  14. 20 other generic readers. Most didn’t arrive.
  15. Acer and Asus had plans for eReaders. Morphed into Tablet Plans. Acer does have one eReader+eWriter set to launch in summer of 2011.

CES 2010 was all about eReaders. More importantly, it was about new companies jumping into the eReader market.

Contrast that with CES 2011 -

  1. Hanvon’s color eReader which won’t be released in the US.
  2. The two CES 2010 stars – Mirasol and Pixel Qi.
  3. iRiver’s Story HD.
  4. A few more. Just a few.

From 40 to 50 new eReaders at CES 2010, we’ve gone down to 10 or so at CES 2011. We have almost no new companies trying to release eReaders. Tablets have replaced eReaders as the flavor of the month.

Why has there been such a sharp decline in interest in making eReaders?

For all intents and purposes eReaders are doing great -

  1. Amazon has definitely sold millions of eReaders. It might have sold as many as 8 million eReaders in 2010.
  2. B&N is selling half a million Nook Color reading tablets a month.
  3. B&N has sold millions of Nooks.
  4. Every eBook store and app is talking about ‘millions’ of sales and ‘millions’ of customers.
  5. eBooks are 10% of the market now.

You have to wonder why there were 50 companies jumping into eReaders in January 2010, when just ‘millions’ of eReaders had been sold, and now there are close to zero companies jumping in – even though 10 million or more ereaders have been sold.

Why is everyone shunning the eReader market?

Here are possible reasons -

  1. Companies believe Tablets will kill eReaders.
  2. Companies feel Tablets are a much bigger market than eReaders – that Tablets could become as big as laptops, while eReaders will always be a 10-15 million eReaders sold a year market.
  3. There are not that many companies excited about eReaders – They find tablets more interesting.
  4. With Tablets, companies see an opportunity to compete on price. iPad at $499 means a lot of opportunity for lower priced tablets.
  5. Companies feel Amazon has wrapped up the market. That there’s a small 10 million eReaders a year market, and Amazon has most of it.
  6. They feel the major markets are US and UK, and those are very difficult to get into. With Tablets they feel there is more of an international market.
  7. Companies don’t feel they can compete with the trifecta of Kindle, Kindle Store, and Free WhisperNet.
  8. Companies don’t want to deal with Publishers. Can’t really blame them.
  9. Companies get a free Operating System they can use with their tablets – the ‘optimized for Tablets’ Android Honeycomb. Even more of an opportunity to cut prices. Note that there is no version of Android optimized for eReaders.

Whatever the reason, it’s pretty clear that companies have moved on from eReaders, and are fully focused on tablets in 2011.

Comparative sizes of eReader and Tablet markets

Apple supposedly sold 10 to 12 million Tablets in 2010. There weren’t really any other Tablets in the market.

Sales of 10 million or so iPads in 2010 might mean a lot of different things -

  1. That Apple got most of the market, and the actual market is 15 million Tablets sold a year.
  2. That Apple could barely produce enough to meet demand (as is claimed), and the actual market is 30 million tablets a year.
  3. 10 million iPads sold is just the tip of the iceberg, and the Tablet market is actually 100 million tablets a year.

Companies jumping into the Tablet market seem to believe one of the latter two possibilities.

In the eReader market, Amazon supposedly sold 5 to 8 million Kindles. B&N and Sony sold a million or more eReaders each. B&N sold a million reading tablets. Other eReader makers probably sold 1 or 2 million eReaders.

What might ’10 million eReaders sold in 2010′ mean?

  1. That the eReader market is already stable, and will stay at around 10 million eReaders sold per year.
  2. That the eReader market jumped from 4 million eReaders sold in 2009, to 10 million eReaders sold in 2010. That it will continue to boom, and will reach 20 to 30 million eReaders sold per year before it stabilizes.
  3. That 2010 eReader sales are just the tip of the iceberg, and that the eventual market will be one hundred million eReaders sold per year.

Most companies seem to believe the first possibility. Perhaps they believe 2. but feel they have no chance.

So, for some indecipherable reason, every company dabbling in eReaders has either assumed that eReaders will stop growing, or it has assumed that Amazon and B&N are unbeatable.

That seems rather defeatist.

It makes very little sense – In a year when every eReader company is claiming record sales, all other companies are running away from the eReader market, instead of towards it.

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