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Tablet PCs To Hinder e-Reader Growth

2/21/2011 12:01:00 AM Eastern

NEW YORK — The tablet PC’s surging popularity could
have a negative impact on the e-reader category.

Although industry forecasts are still showing very
strong growth for the e-reader category, some analysts
think tablets using e-reader apps could impact this category.

“E-readers are at risk from tablets,” said Stephen Baker,
industry analysis VP, The NPD Group.

The research firm Gartner is projecting e-reader sales
will increase 68.3 percent in 2011 to 11 million units. Amazon
with its Kindle line of e-readers is now leading the
market, with a 45.1 percent share, according to IDC. It is
followed by Pandigital, with 16.1 percent, and Barnes and
Noble’s Nook at 15.4 percent share.

Despite this healthy growth curve, Gartner foresees
cannibalization by tablets, but it noted that e-readers have
carved out a solid niche in the consumer electronics market.
The e-reader’s inherent strengths lie in its low price,
long battery life and excellent display.

“With media tablets offering more functionality, e-reader
vendors need to target avid readers who may see the
value of a stand-alone device that performs particularly
well,” said Allen Weiner, research VP at Gartner.

Weiner also believes e-reader vendors will have to
continue to push prices down at the cost of lower margins
or subsidizing the units.

“We think few end users will buy both an e-reader
and a media tablet, so it is important that e-readers
retain a price advantage,” he said.

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