Ereader sales to slump as punters snap up cheap slabs – report

The ereader market is heading towards a slump in 2012 as users increasingly consume digital content on their tablets, according to new research from Taiwanese IT news site Digitimes.

The report found that overall, global shipments of ereaders stood at 22.82 million units in 2011, a year-on-year increase of 107 per cent. It added that annual shipments would exceed 60 million units by 2015.

However, these figures mask a change in the industry which has already seen Kindle-peddler Amazon slash orders from suppliers for its hugely popular ebook readers, according to Digitimes.

The report put global shipments of ereaders in the first quarter of 2012 at only two million units, down from nine million the previous quarter.

Even though Q4 2011 included the all-important Christmas sales period, it still represents a significant drop in sales.

In Amazon’s case, the slump has been caused in part because users are buying its Kindle Fire tablet rather than a regular one-trick-pony ereader, the report claimed – a phenomenon it called the "substitution effect".

Frost & Sullivan analyst Pranabesh Nath agreed that consumer buying behaviour in the ebook market is changing, saying that multifunction tablets like the Fire and the Barnes & Noble's Nook Tablet are proving increasingly popular.

“I think this trend will accelerate in the future as more vendors get into the game and prices fall further – think of an Apple iPad Mini, for example,” he told The Register.

“What will be interesting to see is how e-ink technology evolves as a result of this trend, and whether it can survive the onslaught of cheaper LCD-based tablet devices such as the Kindle Fire, which are usable in a wide variety of ways.”

Nath argued that the market is also being held back by the price of ebooks, which he claimed needed to fall by 30 to 40 per cent, as well as the proprietary nature of most ereader technology. ®