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What Is the Kindle's Future?

Posted: 02/06/10 01:07 PM ET

Last week, Apple announced their entry to the burgeoning slate computer market with the iPad. Just one of a handful of companies shipping slate tablet devices this year, Apple was touted as coming up with a "Kindle Killer." While the jury is still out on the iPad's ability to replace the typical eReader, the very thought must strike concern with Amazon and the other companies with readers on the market, or coming in short order.

At the 2010 International Consumer Electronics Show last month in Las Vegas, several companies introduced new eReaders, many of which are shipping this Spring or Summer (see my CES 2010: eReader Roundup for more details). Among the common features for these new readers are touch screens, Wi-Fi connectivity, memory expandability, and even color auxiliary screens. These features almost make the Kindle look quaint and outdated.

Two news releases this week prove that Amazon is not resting on their laurels with their Kindle platform. On Wednesday, Engadget and other outlets reported the purchase of touch-screen startup TouchCo by Amazon, who plans to integrate them into their Kindle hardware division. Then today, Prime View International Chairman Scott Liu was said to promise the release of color, flexible, touchscreen displays this year. PVI is the owner of E Ink and manufacturers the E Ink Electronic Paper Displays used in the Kindle and many other eReaders.

A number of other companies announced new eReader display technologies at CES 2010. Pixel Qi, Qualcomm, Fujitsu, and Philips showed color screens, while LG Displays showed their flexible foil and Plastic Logic their flexible organic plastic displays, both of which are amazingly thin and produce clear, high-contrast text and images.

On the functionality front, Amazon introduced a software development kit for their Kindle eReaders. This kit allows software developers to build active content for the Kindle 2 and DX, and presumably, for future devices from Amazon. This kit is expected to be available for beta testing within the month, and some of the anticipated applications are interactive content for books and puzzle & game applications. However, Amazon has left the field wide open and is enthusiastically looking to see what the community develops with this tool.

The publishing and eBook world has been atwitter this last week with the growing battle between Amazon and the major publishing houses over pricing. This battle was apparently influenced heavily by the new content agreements between Apple and the publishers, giving them more control over the pricing of their content sold on iTunes or whatever other outlet Apple uses for the iPad. At issue, is the Amazon practice of selling new releases and best sellers for $9.99, which the publishers feel is too low. Apple has apparently agreed to sell the same content for between $11.99 and $14.99, allowing the publisher to dictate the actual selling price.

This is on the heels of the earlier decision by those same publishers to withhold publication of electronic editions of new releases for up to 7 months after the hardcover is released. Widely derided by the eBook enthusiast community, the publishers claim that eBooks are hurting their new release hardcover sales. They are using the movie industry as their model for their plan.

So what does all this mean for the Kindle, or even for the eReader industry in general? Analysts predict that the eReader/eBook market will expand significantly over the next year. DigiTimes estimates that over 9.3 million eReaders are expected to be sold in 2010, up from 3.82 million in 2009.

I think overall, the industry is starting to mature, buyers are seeing prices starting to drop and advanced features becoming more common. People that have been holding off to see how the situation plays out are starting to make the decision to buy. Amazon announced that Kindle became the most gifted item in Amazon's history during the 2009 holiday shopping season. On Christmas Day, for the first time ever, customers purchased more Kindle books than physical books. I think that this train is just starting to get up to speed, and shows no sign of slowing down.

I think that we will see even more readers released with touch and pen capabilities, wireless (Wi-Fi, 3G and Bluetooth) connectivity, color screens, advanced applications and functions (calendars, email, web browsing, and multimedia). People I spoke with at CES seemed to want their eReaders to do more for the money.

Slate computers seem to be on the rise, but I think that this is just the beginning for these. Tablet computing has been around for several years, but never seemed to take off. Will slates be better? While they have much more functionality, I'm afraid that many will pass on them in favor of smaller devices.

Advanced smart phones, like the Apple iPhone already have eReader functionality, but many who have tried to use one to read a book complain that the screen is just too small to be able to read effectively.

I think that we will see some segmentation in the market, with some readers being aimed at the normal consumer, while devices like the QUE proReader from Plastic Logic are clearly aimed at the business user. Similarly, the enTourage eDGe seems similarly suited for the education market. I think this trend will continue, with pricing and features geared to the needs of the particular market.

So, where do you think the eReader market is headed? Do you currently own one? Are you still holding out for the ideal device? What features do you think are a must have? What is a waste? How do you feel about the restrictions the publishing industry is putting on eBooks? Let me know below in the comments. I do read all of them, and answer as many as I can, so chime in!

Related reading:
CES 2010: eReader Roundup
REVIEW: Amazon Kindle 2
REVIEW: Sony Reader - Pocket Edition