Will e-books ever be a best seller?

Sony's Reader has been little more than a footnote so far. Now Amazon is looking to light things up with its new Kindle device. Photos: Amazon's Kindle device

The average commuter seems to be doing OK reading an old-fashioned newspaper on the way to work.

Why, then, do Amazon.com and Sony think they need to replace traditional books with electronic readers?

On Monday, Amazon unveiled the Kindle , a $399 handheld device that can download digital books, newspapers, and magazines from the Internet. Like the name suggests, Kindle is Amazon's way of burning down the traditional paperback book business.

Just last month, Sony launched an upgraded version of its Sony Reader.

Sony and Amazon apparently think the public finally is ready to trade its paperbacks in for more computer screens, even though various attempts to do this have largely failed for a decade.

The Wall Street Journal quoted an executive from Rosetta Books last week who estimated that e-book sales range between $15 million and $25 million annually. That would be a tiny portion of the $25 billion in revenues the publishing industry generated last year.

So what tea leaves are these companies reading to convince them that consumers are finally ready to go digital with their books?

These electronic reading devices are expensive. There are always questions of durability and portability with something that's too bulky to fit in a pocket. And it's not clear many people are clamoring to spend that kind of money on an electronic reading device when they can basically do the same thing on a multipurpose device like Apple's iPhone at nearly the same price.

"At this stage, their intent is to try and teach the market and publishers about what the device can do. Remember, it took the (digital-music crowd) a while to find a business model."
--Stephen Baker, NPD analyst

"Sony's Reader has been a tough sell at $300," said Stephen Baker, an analyst with NPD. "The early adopters will be willing to pay a premium, but the mass market won't be ready until the price comes down--and it will. Amazon is probably not expecting to sell a zillion units of their reader at $399.

"At this stage, their intent is to try and teach the market and publishers about what the device can do," Baker added. "Remember, it took the (digital-music crowd) a while to find a business model."

There is no question that e-readers have improved. They are lighter than in the past, easier to read, and at least in the case of Amazon's Kindle, don't have to be connected to a PC to download a book.

The Kindle will hook up to the Web via a Sprint EVDO connection. That means owners can buy and download books to the Kindle wherever they can connect to the Web. That's far more convenient than being tethered to a PC.

Kindle comes with a 6-inch, 800x600 display--which uses technology from E Ink--to make it easy on the eyes. The company, which provides the same technology for the Sony Reader, fills its displays with small capsules containing thousands of microscopic black-and-white particles made out of the same materials as ink and paper.

Because of this, the screens reflect light in the same way as a book page. Instead of staring into a flashlight, which is what reading most backlit computer screens is like, E Ink is more like reading paper and ink than any screen technology developed so far, said E Ink's CEO Russ Wilcox. He declined to discuss the Kindle ahead of Monday's announcement.

"You can see the words from all angles," Wilcox said. "There's no backlight and most of the time the reader sees the page while the power is off. This allows the user to read for hours without draining the battery."

The other big selling point, of course, is weight. Carrying around an e-reader is easier on the spine than lugging around a bunch of books. The Kindle can hold a small library but weighs just 10.3 ounces--a little more than a half-pound. For those concerned about the environment, e-readers will obviously save a lot of trees and create less waste.

On the other hand, when was the last time a John Grisham novel ran out of battery power? E-readers offer a certain amount of convenience, but consumers will have to see clear advantages if they're going to make the shift.

In short, there's still plenty of room for improvement. In a review of the Sony Reader, CNET Reviews, lamented a slight delay in turning pages on the device, sluggish controls, and no support for audio books in the Audible format. But perhaps the biggest knock on most e-readers that have come before Kindle was a limited selection of books that could be used with the device.

In Sony's case, the company compounded the issue by using a proprietary technology for its book files that isn't compatible with other devices.

And again, there's the price. The readers cost about the same as a good smartphone, and Sony's e-books often cost the same as a regular book. "If the digital version of the book costs the same as hard copy of the books, what's the motivation?" asked Richard Shim, an analyst with IDC.

Another way that Amazon can succeed is to display newspaper and magazine publications in ways that more closely resemble the print versions. One of Kindle's features will be the ability to download content from between 50 to 100 newspapers, magazine and other business publications, including The New York Times and Wall Street Journal.

Amazon also has to hope that Apple doesn't show up. Providing the iPhone with e-reading abilities (in addition to the obvious point that you can already read anything on the Web with the device) would be simple, said NPD's Baker.

"I don't think Apple would get in now," Baker said. "Apple tends not to jump in during version one of a product's development. They prefer to wait until a business model and hardware specs are a little more developed."

 

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