Amazon (AMZN) had it all: A beloved mobile product, a two-month battery life and an e-Ink screen technology that made it the darling of the literary world and the envy of the tablet set. Then what did it do? It set the whole thing on fire.
Listen, we realize the iPad is out there lurking and waiting to mug you of all your books and we know that Android, Research In Motion and Windows tablets aren't exactly making life easier, but really? A $199 tablet with eight hours of battery life, no microphone, no camera and no e-Ink -- just to say you have a color tablet? Entner says Amazon, Barnes & Noble (BKS - Get Report), Sony, Pandigital and all other e-reader purveyors need to realize that they're not just pushing some steppingstone technology, but are turning a seemingly one-dimensional device into a beloved medium of iPod proportions.
"There is room for special-purpose devices because you can optimize things around it," Entner says. "With e-readers you want to optimize around its small size and its black-and-white screen and it allows you to use very efficient digital ink technology that gives you massive battery life and is very contrast rich, so people can read it easily."It's also created a strong niche of die-hard fans. According to research firm IDC, 12 million e-readers were sold last year, with the Kindle accounting for 48% of all sales. That's well off of the 15 million mark set by the first-generation iPad alone, but small touches such as a zoom feature for text have made e-readers a big hit in demographics tablets haven't been aiming for. "You don't even have to wear glasses," Entner says. "Everyone over the age of 45 or so realizes your eyesight goes out, so with the e-reader it delays getting glasses, and that's why it's very popular in the over-40 segment." They're also a lot cheaper than the competition. An iPad or Motorola (MMI - Get Report) Xoom starts at $500, while e-readers are finally hovering around the magic $100 mark. A tablet's functionality pretty much revolves around Wi-Fi access or an "always-on" 3G connection that incurs data charges. Some e-readers may have 3G capability, but they all get along just fine without it -- or the extra weight. Most importantly, however, it's not burning through crazy amounts of battery life with all of the gaming and streaming the kids are doing nowadays. You can charge the more benign models right before Halloween and still have enough battery life left to read A Visit from St. Nicholas ("'Twas the night before Christmas ...") by the tree a few months later. "You have only two colors and it doesn't have to change a lot, whereas a screen for a tablet is very rich in color and needs to change those colors very rapidly for a movie," Entner says. "That costs power and money, and if you look at a tablet, it's basically a screen with a big battery attached to it."