One study says that e-readers are dead -- another claims they
are on the rise. Which one is accurate, and what does this mean for
the future of Amazon's (NASDAQ:
) digital initiative? Roughly 18 months ago, iSuppli published a
detailing the rise of e-books and the impact they have had on
traditional paperback and hardcover books. Researchers revealed a
depressing trend: book revenue was expected to decline for U.S.
publishers at a compound annual growth rate (
) of three percent from 2010 to 2014. This accounts for both e-book
and paper book publishers.
Comparatively, book revenue grew slightly from 2005 to 2010.
During that period, the final two Harry Potter books were released,
along with the introduction of The Hunger Games trilogy and the
Twilight saga. Outside of the Fifty Shades of Grey series, there
have not been any comparable book franchises introduced since that
"The overall weakening will be spurred by a five percent
decrease in the CAGR of physical book sales from 2010 to 2014," the
report claimed, adding that the industry would not be helped by the
expected 40 percent increase in e-book sales.
iSuppli also predicted that e-reader shipments would rise to
more than 20 million in 2012, more than 25 million in 2013 and
roughly 30 million in 2014. While this represents a massive annual
increase, iSuppli said that its forecast was lower than the
consensus of more than 43 million units in 2014. The report said
that e-reader sales would fall short as sales of tablets, which can
also read books, continue to rise.
Two weeks ago iSuppli released a
on the matter, announcing that e-reader shipments will only reach
15 million unit this year -- well below the more than 20 million
units iSuppli had previously expected. iSuppli now predicts that
e-reader sales will drop to less than 15 million next year and less
than 10 million in 2014.
That second report inspired a plethora of media headlines
proclaiming that e-readers were dead. Considering that the e-reader
business belongs to Amazon, this was not good news for the online
Now a third report has been released. This one comes from
Pew Research Center
, which found that in the past year, 23 percent of all Americans
(ages 16 and older) read e-books. In the prior year, only 16
percent of Americans used the digital format.
During the same period, the number of those who read printed
books dropped from 72 percent to 67 percent.
Pew cites the rise of both e-readers and tablets as being the
source of the transition. However, readers are definitely more
interested in tablets than devices that can only display books.
Pew Research Center
This presents an opportunity and a challenge for Amazon. On one
hand it means that the company has been successful in convincing
readers to switch to digital books. However, it could backfire if
users switch to tablets made by other manufacturers. This is why
the Kindle Fire is so important to Amazon's future. Without it,
Amazon could easily lose control of a business it helped
The same thing could happen to Barnes & Noble (NYSE:
). While its Nook business appears to be growing, it will not last
if the company fails to build a better tablet -- or an e-reader
that stops consumers from buying an iPad.
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.
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