Amazon, Apple to Lead the E-Reader Race

Amazon and Apple are expected to lead the pack in the race for electronic reader dominance.
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NEW YORK (TheStreet) -- The Edge, Alex, Nook, Skiff... no, it's not some retro boy band, these are a just few names amid the volumes of new electronic readers hoping to bump Amazon's (AMZN) - Get Report Kindle off its shelf.

Forrester Research

predicted that more than 900,000 e-readers would be sold over the holiday season and it expects to see sales double by the end of this year. Tech companies are jumping to capitalize on the trend, as seen earlier this month at

the Consumer Electronics Show

in Las Vegas. Big shops like

Hewlett-Packard

(HPQ) - Get Report

,

Dell

(DELL) - Get Report

and

Qualcomm

(QCOM) - Get Report

faced off against upstarts

Entourage

and

Spring Design

, all of them unveiling cutting-edge e-readers or tablet devices scheduled to launch this year.

Tablets Take Over CES

Image placeholder title

With

Microsoft

(MSFT) - Get Report

getting into the game with its

Courier touchscreen device

and

Apple's

(AAPL) - Get Report

hotly-anticipated Tablet debuting later this month, it's looking like we have an all-out land grab coming to a small and soon-to-be swamped segment of the tech market.

So who will survive the stampede?

"I don't see room for many players, not in a meaningful way," says Brian Blair, an analyst with Wedge Partners. "It's like the MP3 player market of five years ago. Anyone can build a player."

So it becomes a war of content: Analysts say that e-readers that fail to deliver expansive, compelling software and reading material won't be able to keep up against those that have signed multiple licensing deals with book, magazine, and newspaper publishers. "There will be a shakeout among e-book readers that have more of a hardware play vs. software," says Susan Kevorkian, program director with research firm

IDC's

mobile media and entertainment program. "There's definitely room in this market for more -- and better -- software and service

offerings."

Kevorkian points to Amazon's Kindle as the model -- and a hard act to follow -- for the rest of the market. When it launched the Kindle a couple of years ago, Amazon improved on the category by bundling wireless access into the price of its device and offering a library of some 400,000 digital books. (Sony's Reader needed a computer connection to load books and its selection of reading material was half as big.)

The Kindle's easy set up and consumer-friendly access to books and other content helped Amazon win over a strong following. While Amazon does not release sales information, analysts estimate about 1.5 million Kindles have been sold.

Wedge Partners' Blair says the winners are the booksellers, who have an edge in this market with their built-in e-bookstores. Amazon's e-book stores and the catalog that

Barnes and Noble

(BKS) - Get Report

will make available on its Nook e-reader, will separate them from the pack, says Blair. (No. 2 bookseller

Borders

(BGP)

, which doesn't yet sell its own branded e-reader, recently inked a deal to feature its bookstore on the Alex, an Android-powered e-reader made by startup Spring Design.)

Given the way the iPod cleaned up in music, analysts are also bullish on Apple's prospects for expanding its success to other areas of e-media. Analysts point to iTunes as a winning model for sales and delivery of all types of media, and there's no doubt that it will soon sell material from

magazines, newspapers and book publishers

.

And so, while we are still in the early chapters of the e-book saga, it's clear that there are at least two strong characters -- Amazon's Kindle and Apple's Tablet -- that will likely be central to the story.

-- Written by Scott Moritz in New York

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