Friday, December 19, 2008

Is it

So yet another pretender hits the streets and we have a new eSlick ebook reader. The press appears to be focused on the cost comparison and the belief that this will promote sales and could start price drops across the market.

Foxit Software’s price of its new ereader will certainly raise eyebrows and at a special promotional price of $229 (around half the cost of some of its competitors) is an indication of the inevitable – a price war. We believe the cost is still prohibitive and needs to drop significantly. Blink and you will not see a great difference between all the current beauty contest of readers and the consumers will probably see even less and so price has to drop further. In fact reading the data sheet on the new reader sent us to sleep and we forgot which reader we were reading about. They all lack design and usability and as the cost of notebooks falls they clearly are priced wrong.

The big problem is that ereaders are in danger of becoming commodity priced before the content and market demand has been established. The readers will not drive digital adoption that will be driven by a mix of content, usability, design and price. We would predict that the market will probably see more wanabees and further price drops, after all they are basically the same technology wrapped into different dull boxes and serving up the same text as is available in print. The difference may be when the supermarkets decide the price point and reality pricing is achieved.

We have all seen the buzz around the mobile platform, iPhone reader applications and consumer interest in something new and cool. Its interesting that even with Oprah endorsement, Sony marketing spend and lots of noise these players look tired and unsexy and the biggest buyers are no doubt publishers, journalists and industry folk.

Consumer perception is 90% of the game and these grayscale, eink industrial looking devices devices have failed to deliver the WOW factor, have not created a channel proposition and unlike mobiles do not have an inherent churn that will refresh then over a short period.

What’s next the Wal Mart, Auldi, Tesco reader at under $100. Maybe that might help increase the life expectancy of these ‘me too’ devices a little longer.

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