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Has The Time for Ereaders Come and Gone?

By Dennis Abrams

The headline in the New York Times said it all: “Barnes & Noble’s Strategy is Questioned as Nook Sales Decline.” As the article explains, after a full year of making clear its commitment to building its business through its Nook division, the company’s announcement of disappointing holiday sales was “enough to raise questions about the company’s ability to pull off the transformation from its traditional retail format.”

French language Kindle

Tablets are more appealing to many people than are ereaders, especially in developing digital markets like France.

The numbers speak for themselves. Retail sales at Barnes & Noble bookstores and from its website, BN.com, declined 10.9% from the comparable holiday period a year earlier. Sales in the Nook unit, including ereaders, tablets, digital content and accessories, decreased by 12.6% over the same period.

The Times cited Mike Shatzkin, founder and chief executive of Ideal Logical, a publishing consultant. “They are not selling the devices, they are not selling books and traffic is down. I’m looking for an optimistic sign and not seeing one. It is concerning.”

It was perhaps even more concerning, given that the decline came despite a 13% increase in sales of digital content, which would seem to indicate that it is weak demand for Nook devices themselves that is dragging down the division’s performance. And while other companies do not make public their numbers, analysts believe that sales of both Amazon’s Kindle Fire and Apple’s iPads appear to be strong.

“The problem is not whether or not the Nook is good,” said James L. McQuivey, a media analyst for Forrester Research. “What matters is whether you are locked into a Kindle library or an iTunes library or a Nook library. In the end, who holds the content that you value?”

The Times goes on to say that “The most intriguing, and troubling question is whether the company can stay in the digital device business at all over the long run,” and posited that options for B&N could include strategic partnerships.

The same day as the Times article, The Wall Street Journal asked in its headline: “The E-Reader Revolution: Over Just as It Has Begun?” The paper reports that market researcher IDC recently estimated 2012 global ereader shipments at 19.9 million units, down a startling 28% from 27.7 million units in 2011. In terms of contrast, IDC’s 2012 tablet forecast is 122.3 million units.

HIS iSuppli, while coming up with different numbers, sees a similar trend. The company estimates that shipments of dedicated ereaders peaked in 2011 and predicts that 2012 shipments dropped to 14.9 million units, down 36% from the previous year. By 2015, it projects unit sales of dedicated ereaders to be just 7.8 million.

The problem? According to the Journal, one reason for the decline is that people who bought ereaders are in no rush to buy another. One devoted Kindle user is quoted as saying, “It works fine, I really have no reason to get a new one. If I did ever want to upgrade, it would probably be to a tablet, like the Kindle Fire.”

And while, the article acknowledges, ereaders were a true innovation, giving consumers a digital bookstore in their hands, today’s consumers are more likely to read e-books on tablets rather than ereaders.  According to a recent Pew Research Center report, 23% of Americans said that they had read e-books in 2012, compared with just 16% in 2011.

And since increasingly lower priced tablets can be used not just as readers, the trend away from single use ereaders should only increase, according to Tom Mainelli, IDC’s tablet research director.  “For most consumers, a multi-use tablet is a better fit, particularly at the price points at which tablets can now be had. Ereaders will eventually become a niche product.”

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12 Comments

  1. Samir Shah
    Posted January 8, 2013 at 1:54 am | Permalink

    Yes.

  2. Scott Shjefte
    Posted January 8, 2013 at 3:04 am | Permalink

    I bought a nook but can not tolerate the lack of consumer contract benefits. They tie you up in requirements and arbitration. Not something I am willing to sign up for. They want your soul in the fine print. (over 200 pages of fine print if you agree to use the hardware)

  3. Michael C. Fortner
    Posted January 8, 2013 at 3:12 am | Permalink

    That’s why I’m glad I have an Aluratek Libre Pro (a rebadged JetBook). I’m not locked into a specific format, it supports non-drm mobi, epub, pdf, prc, fb2, rtf and text files. I’m not locked into one store to get books, just download however I want on my computer and transfer to a SD card. No wifi/3G, so nobody can come and invalidate all my books on a whim. I have full control and I like it.

  4. Pamela
    Posted January 8, 2013 at 3:50 am | Permalink

    Although I do agree that many people seem to prefer to use a tablet for e-books my personal preference for reading is the e-ink screen as it is kinder on my eyes. I do own a tablet and use it for magazines and glossy publications but for reading a novel an e-ink product is by far a more comforting read.

  5. Nancy
    Posted January 8, 2013 at 9:45 am | Permalink

    I have both a Nook tablet and e-reader. I bought the tablet first and use it to check email, surf the web, play games, and run a few apps. It’s a lot faster and more portable than using a laptop! But the tablet’s bright screen is too hard on my eyes for reading longer texts, plus it washes out in strong light. So I bought a dedicated e-reader purely for reading. It’s much easier on the eyes and conveniently fits into my purse.

    However, I haven’t bought a single digital book, other than downloading some free ones from B&N. Instead, I’ve been using the e-reader and tablet to catch up on classic literature via Project Gutenberg, the Internet Archive, and some other sites. Everything posted on these sites is free and out of copyright, so no worries about DRM. If that makes me a bad customer and an e-freeloader, so be it.

    I do still buy books, gifts, and DVDs from B&N’s brick and mortar stores. Call me crazy, but I like owning physical books that can be freely lent, given away, or sold — and can’t be arbitrarily deleted from my e-reader or tablet if there’s a rights dispute!

  6. Nob
    Posted January 8, 2013 at 12:50 pm | Permalink

    As a respectable adult, I’d be embarrassed to ask for a “Nook e-reader” lest I get slapped across the chops.

  7. Posted January 8, 2013 at 3:49 pm | Permalink

    Gee, Nook vs Kindle … Nook is like the old Radio Shack Mod III and Kindle is something out of Star Trek … is there any wonder that Nook was not a success in a word where the average cellphone is superior?

    The B&N product is — because of it’s processor — crap. It simply lacks real functionality… if you create a bad product, expect it to fail. What’s the surprise?

  8. Jackie Aldridge
    Posted January 9, 2013 at 3:43 am | Permalink

    Why would I buy an e-reader from a company that conspired with others to fix the price of books I was to buy. Better I should buy an e-reader on which I can read in several formats, from many vendors.

  9. Sandy Thatcher
    Posted January 9, 2013 at 12:28 pm | Permalink

    If Nook is on the way out, why did Pearson invest in a 5% stake in Nook Media at the end of 2012? I suspect Nook is being positioned to be the leading purveyor of e-textbooks in the future, which should ensure it a healthy future. Publishers are not likely to be doing any such thing with Amazon, given how much Amazon has done to alienate the publishing community in general.

  10. Edward Nawotka
    Posted January 9, 2013 at 4:27 pm | Permalink

    The Nook tablet devices are quite useable as ereaders, but some of the functionality is indeed crippled in comparison with an iPad. They are clearly working out the bugs and instead of proprietary software, full Android would have been welcome. But you need to consider that since B&N is a retail business, you can only imagine the customer service headaches they would have to deal with had they allowed full Android onto their devices — buggy apps, viruses, etc…all things a bookseller would NOT want to have to deal with. As for their “walled garden” approach to formats, etc…99% of people just want to read a book once, so having it locked onto a device is less of an issue for the vast majority of users. Not everyone is even tech savvy enough to sideload a book onto a device using something as simple as Overdrive or Adobe Digital Editions. That said, I too find e-ink easier on the eyes for long stretches of reading than a standard tablet screen. Still, gadgets are gadgets and the more they can do, the more tempting they are — even if it’s mostly fools gold as far as reading is concerned.

  11. Jan
    Posted January 15, 2013 at 8:02 am | Permalink

    I own Sony ebook reader PRS-T1. Not only it allows me to read books in different formats but it also supports audiobooks and mp3 music. So I can happily read and listen to my favourite music. The fact that the battery can last upto a month also shows it’s superiority over any tablet. There is nothing better for these long-haul flights than ereader.

  12. Posted March 10, 2013 at 6:53 am | Permalink

    I think that e-reader sales are slowing – but is that so surprising considering how rapidly they burst onto the scene?

    It’s certainly true that, unlike smartphone or tablet owners, many e-reader owners will not feel the need to “upgrade” every time there’s a new release. I persevered with my old Kindle 2.0, until I got a new entry level Kindle as a gift.

    As far as reading e-books on a tablet goes, whilst I also have a tablet, I would avoid reading books on it as far as possible – unless it was just a short passage. It really isn’t a pleasant experience in comparison with reading on an e-ink display.

    Personally, I don’t think that e-readers are about to become extinct – but their boom growth period may be coming to an end.

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