Kindle, you've got more company: eReader market heats up

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Verizon (VZ) unveiled a new eReader from iRex Technologies to be sold in tandem with mega-retailer Best Buy (BBY). And details of Microsoft's (MSFT) upcoming Courier eReader and tablet device leaked. Sony (SNE) also recently announced an eReader that I declared might be a Kindle killer. With an Apple (AAPL) eReader, likely to be called the iReader, waiting in the wings, this appears to be the hottest category in the consumer electronics landscape in the upcoming holiday season and beyond into 2010.

Tech analysis firm iSuppli is predicting the eReader market will grow more than 500 percent in 2009, from roughly 1 million units sold in 2008 to more than 5 million in 2009. The big dog in that game remains Amazon (AMZN), which has raced to the head of the pack with its well-liked Kindle product lineup. The tight integration of Kindle with the online Amazon bookstore has been a huge benefit. Amazon already has the existing infrastructure needed to sell ebooks, saving it from having to build it out from scratch. The growth of this market, however, suggests there is a qualitative difference between consuming content on a standard computer or laptop LCD screen.
Amazon launched the new category (unless you consider an Apple Newton to be the first eReader) in 2006 with its first-generation Kindle. The market is quickly becoming more diverse and the new crop of eReaders is coming in various shapes and sizes.

Already the battle lines are being drawn, with everyone taking aim at the Kindle, the first ebook giant. Amazon's top-of-the-line Kindle DX has a 10-inch screen and runs $489.

Sony took the first swipe when it announced that its yet-to-ship Daily Edition, which has a 7-inch screen and $399 price tag. It would allow for free library ebook downloads, albeit with two- to three-week lending windows.

Meantime, Microsoft's Courier will have dual 7-inch screens with a configuration that mimics a bound book.

And Verizon's new iRex reader, unlike the Kindle, will read most formats including PDF, EPUB, Newspaper Direct, Fictionwise, eReader and TXT. It has an 8.1-inch touch screen and can buy digital books and periodicals from NewspaperDirect, a service that offers more than 1,100 papers and presents them onscreen largely as they appear in print form.

To be sold in early 2010, the iRex will also be the first eReader hookup for Barnes & Noble. Only the iRex will support easy global downloads due to a chipset optimized for global 3G access. (Here's a handy comparison chart of the four big players including the two Amazon Kindles, from CrunchGear.)

All the models have slight variations, but all look to be pretty well thought out and easy to use. Which makes me think this is going to be a real ebook dogfight. That this market is poised to rocket is a heartening sign for print publications saddled with plunging circulation rates and imploding advertising bases. I personally have switched several subscriptions out of print and onto my second-generation Kindle. I find the reading experience much closer to sitting down with a magazine as opposed to reading in the increasingly ADD environment of the Internet.

Amazon's arrangement with publishers has been contentious, as many have said that the revenue split of 70 percent going to Amazon is not a sustainable business model. On the other hand, the Kindle gives a subscription revenue stream potential to blogs, which can gain distribution via the Kindle and can charge readers.

The revenue splits between publishers and device makers and wireless carriers has not yet been revealed for the other eReaders. Then there is Apple, which will likely track its eReader purchases through the iTunes software.

One thing is for sure, however. As the number of eReaders soars, the number of print subscriptions will need to go down. I am not at all convinced this is a bad thing. At least now, readers can access the content in format that could be more profitable to publishers. This could help ensure the long-term survival of publishing brands that didn't translate well to the web but still had viable print audiences.
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