Published: April 22. 2010 12:01AM
Can e-readers still compete with the iPad?
Can e-readers still compete?
When Apple Inc. launched its touch-screen tablet device known as the iPad earlier this month, some analysts began ringing the death knell for so-called e-readers — most notably, the popular Amazon Kindle.
After all, the two devices seem hardly comparable. The Kindle uses a black-and-white screen and is designed primarily for reading books. The iPad is a full-on portable computing device capable of reading, watching video and playing games as well as sending e-mails and typing up documents — all from a high-definition, 9.7-inch LCD touch-screen.
On top of that, Apple managed to surprise the market by bringing in the iPad at a starting price of $499 — well below most estimates before the product was announced in late January.
“The iPad makes things much more difficult for e-reader devices,” said Colin Sebastian, an analyst with Lazard Capital Markets who has followed the e-reader market. “Especially when you’re a higher-priced e-reader, then the value proposition becomes less clear.”
Still, many companies are making bets on the e-reader business. And analysts say those bets could still pay off, depending on how they are executed. IDC estimates that about 2.5 million e-readers were sold in 2009, and that number is expected to double to 5.1 million this year.
Those estimates have attracted several players to the market, with more coming.
Worries about the iPad’s effect on the Kindle have helped to weigh down Amazon’s stock this year. The shares are up 4 percent since the first of the year — an underperformance compared to the Nasdaq Composite, which has gained more than 8 percent in the same period.
“The market fears that the iPad will materially undermine the value proposition and growth prospects for the Kindle,” Mark Mahaney of Citigroup wrote in a note to clients on March 25.
Many analysts still see a strong future for dedicated e-readers — depending on price, content and other factors that could help them stand out to consumers.
–wire report
Source: http://www.goerie.com/apps/pbcs.dll/article?AID=/20100422/BUSINESS05/304229989/-1/business
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