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e-Readers Hot For The Holidays: Forrester

10/08/2009 09:55:30 AM Eastern

Cambridge, Mass. - E-reader sales will be even rosier this year
than predicted, said Forrester Research in a new report publicized Wednesday.

Calling e-readers a "breakout success," Forrester upped its
forecast for U.S. e-readers to 3 million units for 2009, up from 2 million
predicted earlier, with 900,000 units expected to sell during the holiday
season.

Retailers such as Best Buy, Costco, Target and Walmart are all
devoting shelf space to e-readers this Christmas, with Best Buy launching a new
"Gadgets and eReaders" section with interactive displays where consumers can
test the devices, said analyst Sarah Rotman Epps.

Amazon is expected to lead the category with 60 percent market
share in 2009, followed by Sony with 35 percent.  Other vendors, such as iRex, Interead and
Foxit, will account for 5 percent of U.S. sales.

E-book sales are also on the rise, climbing 149 percent over last
year as of June. E-books now account for $14 million in sales per month,
according to the Association of American Publishers, said Forrester.

The release this June of the Cool-er
Reader
from Interead helped bring down prices in e-readers this year, which
helped spur the market. Regarding the $249 Cool-er Forrester said, "The fact
that with the help of Taiwanese ODM Netronix it went from concept to product in
just six months showed Amazon and Sony that if they don't go after market
price-sensitive consumers, someone else will." This resulted in price
reductions from both market leaders.

Next year, growth will be compounded, and e-reader sales might
exceed 6 million units. If suppliers find ways to use non e-ink screens that
can support color and video, then sales might be even higher, said Rotman.

 Recent research
from Web site Retrevo
also found keen interest in e-readers, with 21
percent of online survey respondents claiming they would like to buy an
e-reader this year.

The NPD Group also noted that "lower pricing from Amazon and Sony
combined with wider model selection and broader retail distribution should
result in strong growth for the category," according to Ross Rubin, industry
analysis director for consumer technology.